Published On: Mon, May 2nd, 2016

Most incorporations by Panama Papers law firm were in BVI

m-f_shreddedMIAMI - While many of the news articles are detailing the information available thus far in the Panama Papers scandal are focusing upon Panama, the law firm of Mossack and Fonseca chose not Panama as its preferred jurisdiction for corporate formation, but the British Virgin Islands (BVI).

Mossack and Fonseca used, or abused, the BVI’s bearer share laws, which allow the names of beneficial owners to be omitted, so that its criminal clients could open accounts without fear of being named.

Looking at the history of Mossack and Fonseca corporate formations between 1980 and the present, we see:

(1) That Mossack and Fonseca started out forming companies more or less exclusively in Panama.

(2) By the late 1980s, the BVI had become Mossack and Fonseca’s jurisdiction of choice. Panama formations would thereafter be only a small percentage of those created by the firm.

(3) In 2004, Mossack and Fonseca was forming over 6,000 companies annually in the BVI.

(4) BVI corporate formation would dominate at Mossack and Fonseca through 2015.

To a much lesser extent, the Mossack and Fonseca law firm also formed shell companies in these jurisdictions:

(A) Anguilla
(B) The Seychelles
(C) Samoa
(D) The Bahamas
(E) Niue

Many of the BVI companies formed by Mossack and Fonseca intentionally maintained bank accounts in other tax haven countries, making routine identification of corporate officers, directors and, of course, owners, challenging, and basically impossible.

Photo: Investigators removed bags of shredded documents after a raid on a Mossack Fonseca facility in Panama. Credit: La Prensa

By Kenneth Rijock

Kenneth Rijock is a banking lawyer turned-career money launderer (10 years), turned-compliance officer specialising in enhanced due diligence, and a financial crime consultant who publishes a Financial Crime Blog. The Laundry Man, his autobiography, was published in the UK on 5 July 2012.

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