Why Panama into Heaven of Money Laundering?

MASSAPEDIA NEWS - Name of The Panama comes after leaked millions of documents from a law firm that handles major clients, including world leaders, celebrities and felons.

Companies Mossack Fonseca allegedly helped them in money laundering, tax fraud and avoid sanctions, based agencies International Consortium of Investigative Journalists, ICIJ, which received a leaked document of 2.6 terabits it.

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Mossack Fonseca denies doing wrong practices. They claimed to have been in operation for more than 40 years without any blemish.

The case seemed to confirm the image of money-laundering paradise embedded in Panama since the 1980s during the rule of dictator Manuel Noriega. Quoted from the article on the website Insight Crime, Prior was deposed in 1989, Noriega allegedly routinely receive money from the Medellin drug cartel leader Pablo Escobar.

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Money laundering and drug trafficking are rampant in the country made John Kerry who was a United States Senator dubbed Panama as a "narco-kleptocracy".

Since the end of the leadership of Noriega, Panama is trying to enforce anti-money laundering regulations. However, in practice nil.

Based on the IMF report in 2014, the Panamanian government did not conduct a review or assessment of the risk of money laundering or terrorist financing related to narcotics trafficking and other crimes.

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That is why Panama into the "gray list" Financial Action Task Force (FATF), a body that supports intra-governmental anti-money laundering policies. Panama in the list since 2014, along with Afghanistan, Sudan and Syria.

Panama money laundering loophole lies in the rules about bearer shares or bearer shares, the shares owned by the person holding it, without the owner's name.

Allowed to register in Panama bearer share corporation or sociedad anonima (anonymous society) based on the Banking Act No. 32 in the country. With this, Panama maintain the confidentiality of the company's assets, the owner's name, and all forms of business and banking transactions were done.

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This opens up many opportunities to make the company through Mossack Fonseca. One of the names that appeared in a leaked ICIJ is President Vladimir Putin who is suspected of embezzling funds up to US $ 2 billion and other world leaders such as Chinese leader Xi Jinping and Malaysia Najib Razak.

In addition to the identity of the anonymous owner, Sociedad anonimas also provides many benefits for the company, which could be misused for money laundering purposes.

Among them are companies that do not need to be audited and reported taxes. Companies in Panama also not have to pay income tax on international transactions, interest income and sales taxes. Companies only need to pay a franchise tax of about $ 300 to the government of Panama to be able to continue to open offices in the country.

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Additionally under anonimas sociedad policy, the company does not need to have a physical address in Panama. This allows the formation of a shell company or fictitious companies.

Under the corporation laws of Panama, companies in the country did not need to keep a record of each transaction. If any financial records, they are not obliged to give it to other governments and can store it outside of Panama.

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According to the ICIJ report, Mossack Fonseca moved to Panama in 2005 after the British Virgin Island tighten the rules about bearer shares.