Panama Papers – $30 million loan for client on the run

Offshore companies connected to 44 of Africa’s 54 countries appear in the Panama Papers leak, according to new research

More than 1,400 companies in the files of the offshore law firm Mossack Fonseca have names that indicate mining or resource extraction interests – raising fresh concerns about how tax havens can be used to exploit the natural wealth of the world’s poorest continent reports The Guardian.

The files contain at least 37 offshore companies with operations in Africa that have been named in legal proceedings or criticised by national or international agencies.

The new research was published on Monday (July 25) by African partners of the International Consortium of Investigative Journalists (ICIJ), which coordinated the initial investigation into the offshore law firm’s leaked files.

Across Africa, 18 media organisations have published their findings – including the African Network of Centers for Investigative Reporting, The Namibian and Verdade in Mozambique.

The revelations include:

• Twelve of 17 companies named by Italian prosecutors as being connected to a middleman in an alleged bribery scheme surrounding an Algerian oil and gas deal appear in the files, including one company described as a “crossroads of illicit financial flows”.
• Mossack Fonseca allegedly helped process a $30m loan for a client in Nigeria despite press reports that he had been “on the run” over potentially criminal petroleum deals.
• At least 30 wildlife safari companiesin Africa are identified as being connected to offshore companies, mostly incorporated in the British Virgin Islands.

Mossack Fonseca told the ICIJ in response to the recent findings that it follows “both the letter and spirit of the law”.

It said: “We have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and wilful attempts by some to mischaracterise it.”

The offshore industry has long protested against the charge that it facilitates the theft of Africa’s natural resources.

A report published in 2014 by a lobbying group for Jersey’s financial services sector argued that tax havens facilitated efficient investment in the developing world, a claim that has been echoed by a US group that lobbies in favour of tax havens.

But such claims have been contradicted by other research into illicit financial flows from Africa.According to a 2015 study commissioned by the African Union and the United Nations Economic Commission for Africa, more than $50bn a year is stolen from countries across the continent via fraud and tax avoidance.

Earlier this year an investigation into the leaked files of Mossack Fonseca by about 100 media organisations exposed the role in the offshore industry of facilitating tax avoidance and alleged crime.

The revelations prompted the former prime minister David Cameron to announce a new agreement between the UK and its network of crown dependencies and overseas territories that would allow law enforcement to access information about the true owner of an offshore company.

Further rules on the automatic exchange of beneficial ownership information were agreed at an international summit on anti-corruption in May.