BVI hands record fine to Panama papers law firm

Added 15th November 2016

Mossack Fonseca, the law firm at the centre of the Panama papers scandal, has been fined a record amount by the British Virgin Islands’ Financial Services Commission (FSC).

BVI hands record fine to Panama papers law firm

The $440,000 (£351,261, €408,307) administrative penalty is the largest ever issued by the FSC.

The law firm was fined for contravening the FSC's anti-money laundering and terrorist financing code of practice and BVI regulatory code

Specifically, Mossack Fonseca & Co (BVI) Ltd was reprimanded for record keeping and risk assessment failures and inadequate updating of customer due diligence.

British Virgin Islands

Half of the companies that appear in Mossack Fonseca’s files, were incorporated in BVI, equating to more than 113,000 companies.

Panama ranked second with fewer than 500,000, according to data from the International Consortium of Investigative Journalists (ICIJ), which broke the story.

Held to account

BVI premier, D. Orlando Smith, said: “[Tuesday’s] enforcement action clearly demonstrates the effectiveness of the territory’s independent regulator, the seriousness with which it tackles any breaches of its code and, through the adjustments made to its risk assessment framework, an on-going commitment to strengthening its regime to ensure this remains fit for purpose.

“Achieving this outcome in the face of intense international scrutiny is testament to the FSC’s conviction, dedication and willingness to conduct such a thorough investigation whilst holding to account those who fail to comply with the territory’s structure and regulations.”

Panama papers

Dubbed the ‘biggest ever blow to the offshore world’, the leak of 11.5 million from Mossack Fonseca in April 2016 exposed the offshore holdings of politicians, sports stars, and public officials around the world.

The UK recently announced an investigation into 22 people with link to the Panama papers suspected of tax evasion. 

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Kirsten Hastings

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Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 

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