As international scrutiny of Mossack Fonseca began hotting up in the spring of 2016, a new tranche of leaked documents shows the firm carried out an internal audit to try and identify its clients.
It appears as though the latest documents come from the same German newspaper that received the initial 11.5 million leaked documents, Suddeutsche Zeitung.
It is not clear at this stage if any more documents could surface or why it has taken two years for the latest tranche to come to light.
Internal audit woes
However, a report by TV programme BBC Panorama found the firm could not identify the beneficial owners of more than 70% of 28,500 active companies in the British Virgin Islands (BVI).
Further, the identities of the beneficial owners of 75% of the companies it administered in Panama could not be verified.
One client also complained that the news coverage generated by the Panama Papers would now mean his client would have to pay taxes.
While a Swiss wealth manager, who was responding to questions from the firm, wrote in an email: “”THE CLIENT HAS DISAPPEARED! I CANT FIND HIM ANYMORE!!!!!!,” according to the BBC Panorama report.
One Uruguayan financial planner commented: “[…] the main purpose of this type of structure has been broken: confidentiality”.
Mossack Fonseca announced it was to shut down in March 2018.
Public register support
The leak gives more support to a controversial amendment to the UK anti-money laundering bill passed in May, that will impose public registers of beneficial ownership on British Overseas Territories.
At the time of the Panama Papers fallout, BVI law permitted corporate service providers to rely on intermediaries, banks and legal firms to check the identities of owners.
Cayman Island’s premier Alden McLaughlin has said the public register amendment was constitutional overreach and “reminiscent of the worst injustices of a bygone era of colonial despotism”.
In early June, the government of the BVI engaged with international law firm Withers to mount a legal challenge against the imposition.
