Monday, April 4, 2016

Panama Papers - Chit hits RBC fan already

RBC bank is one of thousands named in a massive data dump known as the Panama Papers, which appear to outline how Panamanian law firm Mossack Fonseca has helped countless international power brokers set up foreign corporations.

The full scale of the data from the 'Panama Papers' has yet to be revealed. But CBC News confirmed that the documents show Canada's biggest lender used Mossack Fonseca's services to set up at least 370 such offshore entities for its clients.
There's nothing illegal about foreign incorporations, something an RBC spokesperson was very quick to repeatedly note.

The news is timely. It was revealed today that the Canada Revenue Agency offered secret amnesty to scores of multi-millionaire clients caught red-handed using an offshore tax "sham" on the Isle of Man — a reprieve that was supposed to be confidental until it was revealed by a CBC News/Radio-Canada investigation.
The amnesty allows for clients of the accounting giant KPMG to be free from any future civil or criminal prosecution — as well as any penalties or fines — for their involvement in the controversial scheme. The clients simply had to agree to pay their back taxes and modest interest on these offshore investments, which they had failed to report on their income tax returns.

Documents show that the schemes had attracted at least $130 million.
The confidential nine-page offer was signed on May 1, 2015 by CRA's manager of offshore compliance, Stephanie Henderson. The offer was made despite CRA uncovering the KPMG scheme, which had at least 26 wealthy clients each investing a minimum of $5 million using shell companies on the Isle of Man.

A letter filed in court in September 2015 by a KPMG lawyer stated that 15 clients had "self-identified" to the federal tax authorities.

The Liberals campaigned on a platform to overhaul the Canada Revenue Agency, pledging to crack down on tax avoiders and evaders.

Revenue Minister, Diane Lebouthillier
The CEO of RBC, the only Canadian financial institution linked to the Panama Papers scandal, said the bank is combing through four decades worth of files to determine whether any wrongdoing took place.

David McKay said “As CEO, I have to be concerned about our brand and reputation, particularly in a situation where there’s absolutely no allegation of wrongdoing,” McKay emphasized that there are many legitimate reasons for setting up such companies and said it’s important not to conflate tax evasion, which is illegal, with 'tax planning'.

David McKay
RBC and its subsidiaries used Mossack Fonseca, a Panamanian law firm at the centre of the data leak, to set up 378 shell companies. McKay’s comments came following the bank’s AGM meeting in Montreal, where Prime Minister Justin Trudeau was also asked about the data leak that has pulled a curtain on the use of offshore tax havens.

Trudeau called on the international community to work together to make global finance more transparent so that rich investors can’t simply “hop” around to favourable jurisdictions to avoid paying tax.
See ----->
Sergei Roldugin, a close friend of Russian President Vladimir Putin is reported to have stashed $ 2b – money that he’s unlikely to have earned as a professional cellist and conductor.

On other fronts the 'Panama Papers' also names the family members of eight current or former members of China’s politburo. One of the people mentioned in the report is Deng Jiagui, the brother-in-law of China’s president, Xi Jinping. Another is Li Xiaolin, the daughter of China’s former premier, Li Peng.

Reporting on the 11.5 million tax documents is being published in batches. A full account may be days or weeks away.

Xi Jinping