BVI hits Panama law firm with sanctions

THE BRITISH Virgin Islands (BVI)   has become one of the first enabling jurisdictions to limit the activities of Panama law firm Mossack Fonseca,(MF) center of the Panama Papers scandal,

The country’s Financial Services Commission (FSC) has issued a directive prohibiting MF from undertaking new activities in the territory as part of several sanctions handed down against the firm.

According to actions posted on its web site, the FSC has fined the firm $31,500 for various offenses, including failing to perform due diligence, and ordered it to appoint a “qualified person” to hand over a report on the firm’s activities.

The sanctions were levied in April, the same month that media around the world began reporting on the activities of the firm. That effort was led by the International Consortium of Investigative Journalists (ICIJ), which gained access to the firm’s files.

It is not the first time that the Panamanian firm has been sanctioned by the FSC. In October 2012 it was fined $20,500 and in December 2013 it was fined $37,500 for failing to comply with due diligence requirements. Since the scandal erupted on April 3, the firm has regularly denied any involvement in illegal activities

The initial report of the “qualified person” is due this week, and a second report is due by the end of the month.

MF officials have declined to comment, says La Prensa.

The FSC’s decision means the company is not allowed to conduct any new business within the territory. The FSC also warned that it may take any action that it deems necessary “to protect the jurisdiction or customers.”