The British Virgin Islands on Tuesday fined Panama-based law firm Mossack Fonseca $440,000 (approximately Rs 2.97 crore) for eight breaches of anti-money laundering and other regulations. The Financial Services Commission of the United Kingdom’s overseas territory identified the violations after an investigation, which began after a leak of documents from the firm’s database in April revealed the hidden offshore wealth of leaders and celebrities, The Guardian reported.
The FSC said the violations included inadequate anti-money laundering and terrorist financing controls, as well as the law firm’s failure to conduct identification checks for customers referred to it by third parties, The Wall Street Journal reported. Mossack Fonseca also did not always maintain identity records, the Commission said. Virgin Islands premier and finance minister Orlando Smith said the ruling was “testament to the FSC’s conviction, dedication and willingness to conduct such a thorough investigation”.
However, the executive director of a group that lobbies against tax havens called the fines “embarrassingly inadequate”. “Given that it took a leak for its regulator to work out what was happening in its own backyard, the British Virgin Islands’ own abilities as a regulator are inevitably called into question,” said Robert Barrington of Transparency International UK.
The names of 500 Indians were included in the Panama Papers leaks, which led to the government invoking several tax treaties and making at least 200 requests to collect banking and finance-related evidence on those named. On October 3, the Centre told the Supreme Court that a multi-agency group had been set up to fast-track the investigation. The Department of Economic Affairs told the apex court that around Rs 8,186 crore had been brought under the tax purview despite lack of cooperation from Swiss authorities.