Mon | May 29, 2023

'No tax haven' ... but Jamaica to push ahead with financial centre plans amid Panama Papers revelations

Published:Tuesday | April 5, 2016 | 12:00 AMJovan Johnson and Livern Barrett
People hold banners and protest in front of the Parliament building in Reykjavik, Iceland, yesterday. The leak of millions of records on offshore accounts claimed its first high-profile victim as Iceland’s prime minister, Sigmundur David Gunnlaugsson, resigned amid outrage over revelations he used such a shell company to conceal a conflict of interest.

As global fallout continues over the leak of millions of documents on offshore financing, the Jamaican Government has signalled it will press ahead with plans to make Jamaica an international financial services centre.

The leak of 11.5 million documents, dubbed the Panama Papers, originated from Panama-based law firm Mossack Fonseca.

The documents shed light on systems used by the rich and powerful to hide their wealth.

Using offshore accounts is not illegal, but the practice raises questions about tax evasion and avoidance.

So far, no Jamaican citizen or company has been implicated. All the documents are expected to be released in full early next month.

However, Professor Trevor Munroe, who heads the corruption watchdog National Integrity Action (NIA), has urged the Major Organised Crime and Anti-Corruption Agency to collaborate with international law enforcement partners and commence a probe to determine whether any Jamaicans are involved.

In addition, Munroe wants local media practitioners to reach out to the International Consortium of Investigative Journalists, which has been releasing stories from the documents, "to identify and unmask any Jamaicans involved in this corruption among the scores of public officials, political leaders and billionaires" implicated by the leaks.

The NIA executive director also renewed his call for the "secret beneficial owners" of offshore companies who bid for Jamaican government contract to be made public.

In January, Jamaica's House of Representatives approved the General Partnership and Limited Partnership bills, aimed at creating the formal environment for a global financial centre. The bills did not make it to the Senate before the dissolution of Parliament ahead of the February general election, meaning the entire process has to be restarted.

Karl Samuda, minister of industry, commerce and agriculture, said the Andrew Holness administration was determined to enact the laws that will help Jamaica get a share of the US$7-trillion international financial services sector.

"Yes, absolutely," Samuda told to The Gleaner when asked if the administration would restart efforts to have the bills approved.

"It will have to be put back and taken through all the stages."

Samuda could not give a timeline, however, noting that "the schedule of things of that nature is largely governed by the Clerk (of the Houses of Parliament). And I don't think that anything more will be possible (during the Budget Debate period between April and May)".

The information covering the last 40 years of the law firm was reportedly leaked by an unknown source to the German-based newspaper Sueddeutsche Zeitung, and then to the US-based ICIJ.

The media group and 107 other media organisations in 76 countries spent a year sifting through the files "to expose the offshore holdings of world political leaders, links to global scandals, and details of the hidden financial dealings of fraudsters, drug traffickers, billionaires, celebrities, sports stars and more".

During the House of Representatives debate in January, Anthony Hylton, then portfolio minister, now spokesperson, stressed that while "there are negatives associated with the (financial services) industry such as tax evasion, money laundering, lack of transparency and profit shifting ... Jamaica, as a new entrant, does not have an image of fostering illicit activity among its potential customer base."

It's the same tune being sung now by Samuda.

In reacting to revelations from the Panama Papers, Samuda yesterday stressed that Jamaica "will not, on any account, be a haven for tax dodgers, evasion of taxes".

He added: "As far as we are concerned, we have sought to assure everyone and the measures taken so far have gone a far way in giving people the confidence as a safe destination."

The minister told The Gleaner that any gaps identified in the proposed laws in light of the global offshore financing scandal will be addressed.

The Panama Papers leak, which exposes the offshore dealings of 140 politicians from more than 150 countries across 21 tax havens, has highlighted cases linked to the Caribbean countries of The Bahamas, St Kitts and Nevis, Belize, The British Virgin Island and British Anguilla.

Meanwhile, governments across the world have initiated a series of investigations in their countries over the leaks which have fingered some of their citizens.

Yesterday, Sigmundur Gunnlaugsson resigned as prime minister of Iceland over revelations that he owned an offshore company with his wife.

He reportedly did not declare an interest in the company when entering Parliament in 2009.

Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrongdoing.