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Panama firm accused of secretly helping oil, mining crooks in Africa

Jul 25 2016 16:16
Matthew le Cordeur

Cape Town – Mossack Fonseca is a major provider of secrecy to companies involved in Africa’s extractive industries, the latest leak in the Panama Papers scandal has revealed.

“Mossack Fonseca’s files reveal offshore companies that were established to own, hold or do business with petroleum, natural gas and mining operations in 44 of Africa’s 54 countries,” the International Consortium of Investigative Journalists (ICIJ) revealed on Monday.

“Many of them are controlled by politicians, their family members and business associates. Often, the oil, gas, gold and diamonds formed beneath the earth’s surface over millions - even billions - of years are traded by shadow companies that have existed for months.”

The ICIJ’s review of Mossack Fonseca’s internal records shows that the Panama-based law firm’s “internal files include more than 1 400 companies whose names refer to mining, minerals, oil, petrol or gas”.
 
“Companies created and assisted by Mossack Fonseca include at least 27 subsidiaries of one of the world’s biggest gold producers, the mining behemoth AngloGold Ashanti and its predecessor.

“AngloGold told ICIJ it complies with relevant tax laws and that its offshore companies held investments and allowed it to ‘mitigate ‘double taxation’.”

Mossack Fonseca declined to answer detailed questions for its Monday revelation, telling the ICIJ that “our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries”.

“As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound,” the law firm said.

“Filing legal paperwork to help incorporate a company is a very different thing from establishing a business link with or directing in any way the companies so formed. We only incorporate companies, which just about everyone acknowledges is important, and something that’s critical in ensuring the global economy functions efficiently.”

The latest revelation reveals how politicians and mining, oil and gas interests benefit from secrecy and dubious multimillion dollar transfers.

“Twelve of 17 companies under investigation by authorities in Italy in relation to a $10bn oil and gas deal in Algeria were created by Mossack Fonseca,” it said. “Italian authorities called one offshore company ‘a crossroads of illicit financial flows’.

“Dozens of companies created by Mossack Fonseca have been involved in law suits or public allegations of wrongdoing, according to an ICIJ analysis.

“Documents within the Panama Papers show Mossack Fonseca employees often fail to conduct adequate checks on clients involved in extractive industries and in some cases offer services that make it difficult for government authorities to identify the players behind offshore companies and natural resources deals,” the ICIJ reported.

anglogold  |  mossack fonseca  |  panama papers
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