In Brief

Panama Papers: UK banks given one week to disclose links

Leading high street institutions among those told to investigate any links to Mossack Fonseca

city-of-london-canary-wharf.jpg

UK banking groups have been given just one week to report back to the financial watchdog on their links to the law firm at the centre of the Panama Papers furore.

In a letter dated 4 April and seen by the Financial Times, 20 regulated companies, including the largest high street banks, have been told to report back on what action they are taking to review their exposure to Mossack Fonseca or to offshore companies set up or managed by the firm in tax havens."Beyond 15 April, we will require updates on any significant issues or relationships identified and a full response, detailing your findings, when your investigation is concluded," the letter adds.

Conservative MP Mark Garnier, a former investment banker and the firebrand member of the Treasury Select Committee, said it was "entirely reasonable" for the watchdog to demand such action.

The issues raised by the leak were "incredibly difficult for banks", he said, and hefty due diligence could make "people with perfectly legitimate banking needs… feel like a shifty tax dodger". But Garnier warned that banks should be "prosecuted alongside tax evaders if their actions helped a criminal activity".

This is now the major task in the wake of the revelations: to identify what among the activities exposed constitutes real wrongdoing or illegality and what of the remainder is legal but undesirable enough to warrant changes in the law.

One UK bank has already been identified in relation to potentially the most serious illegal actions so far alleged. HSBC sought formal identification documents before undertaking work for Drex Technologies, a company owned by Syrian President Bashar Assad's cousin Rami Makhlouf, who is the subject of sanctions in both the UK and US.

The document, which was also signed by an official from the Foreign Office, clearly states that Drex, which Mossack Fonseca had helped to establish in the British Virgin Islands, is owned by Makhlouf.

Two HSBC private bank subsidiaries based in Monaco and Switzerland are among the top ten financial institutions named in the papers, notes the BBC.

Recommended

The history of Pride
People celebrating Pride in London
In Depth

The history of Pride

The countries that have banned conversion therapy
Conversion therapy protest
Why we’re talking about . . .

The countries that have banned conversion therapy

‘Playground insults’: what world leaders have said about Vladimir Putin
G7 leaders
Getting to grips with . . .

‘Playground insults’: what world leaders have said about Vladimir Putin

Quiz of The Week
Protesters outside US Supreme Court
Quizzes and puzzles

Quiz of The Week

Popular articles

Are we heading for World War Three?
Ukrainian soldiers patrol on the frontline in Zolote, Ukraine
In Depth

Are we heading for World War Three?

Nato vs. Russia: who would win in a war?
Nato troops
Today’s big question

Nato vs. Russia: who would win in a war?

Ten Things You Need to Know Today: 2 July 2022
10 Downing Street
Daily Briefing

Ten Things You Need to Know Today: 2 July 2022

The Week Footer Banner