panama papers

Panama Papers and the banks

At the moment, politicians across the world – especially, it seems, in the UK - are in the spotlight regarding their tax affairs. Banks, however, will also soon be in the spotlight, as by Friday 15th April they have been told to hand any information regarding their dealings with the law firm at the centre of the Panama Papers over to the UK’s Financial Conduct Authority.

As a result, pressure is growing on the City watchdog to launch a full-blown investigation into these explosive claims.

It has already become clear that nearly all of the major banks are involved to some degree, with a few well known Banks such as HSBC, Deutsche Bank, UBS, Coutts and Rothschild’s standing out more than others.

According to the Panama Papers, banks set up 15,600 offshore companies. HSBC alone set up more than 2,300. HSBC is the bank that nearly lost its US licence a few years ago when it was discovered that one of its clients was one of the most murderous and wealthiest drugs barons in Mexico. It would appear that they didn’t learn from their past mistakes and that the lure of wealth and huge profits made them forget their moral, ethical and legal obligations.

But the Panama Papers could be just the tip of the iceberg -  let’s not pretend for a minute that there was anything unusual about Mossack Fonseca, because there was not. This is just one of a host of law firms in tax havens doing remarkably similar things. The need is for the FCA to demand that banks put on record all their connections with secrecy jurisdiction lawyers, accountants etc.

This could all lead to hefty fines for the banks, on top of the fines they have already had for fixing the FX markets, gold prices, Libor – the list goes on and on. Plus, hopefully it will help ensure investment banks are a lot more transparent on what they are doing and with whom in the future. 

With this in mind, be cautious as to where you place your money as some banks may struggle to survive.

If you want to know what your options are, I am here to help you find the right solution to make your money work for you in the most tax-efficient way possible. You can find out more about our financial management services here and get in touch with me directly by filling in an enquiry form

Back to Top