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Finance, Trade and The Blue Economy Minister Jean-Paul Adam gives update on the ‘Panama Papers’

Firm action against defaulters

Seychelles is exchanging information with other tax jurisdictions and an internal investigation is also ongoing since the country’s name has been linked to information contained in offshore financial services documents leaked from Panama-based law firm Mossack Fonseca.

Known as the ‘Panama Papers’ the leaked financial documents mention a number of countries around the world, including Seychelles.

In a press conference this week, Finance, Trade and The Blue Economy Minister Jean-Paul Adam said Seychelles has the right framework and is equipped to deal with the fallouts from the Mossack Fonseca allegations.

“The government has taken very seriously the concerns that have been raised, but we are reassured that our legal framework is strong enough to address these issues. Seychelles is a country that is largely compliant according to the OECD (Organisation for Economic Cooperation and Development) in terms of exchange of information for tax purposes. We are party to the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Information (AEOI). Through those agreements we are able to exchange tax information with all other parties to that same convention which includes over 70 countries worldwide and mostly members of the G20,” said Minister Adam.

By being largely compliant with the OECD standard and having gone through the phase 2 peer review of the OECD, Seychelles is ahead of many similar jurisdictions and as the minister pointed out “we can say with confidence that Seychelles has the legal framework to deal with these issues.”

Seychelles also has an anti-money laundering framework which is also in conformity with the best practices of the financial task force and also in conformity with the OECD best practices.

But this does not mean that “there is no action to be taken”.

“The FSA (Financial Services Authority) and the FIU (Financial Intelligence Unit) are currently doing a joint investigation in relation to the Mossack Fonseca leaks and also in relation to any other firms or corporate service providers that may have facilitated, if there were registration of companies that were not done in conformity with international best practice,” explained Minister Adam.

He noted that it is important that the FIU and FSA do undertake this investigation in a thorough manner and once they have completed it, they will report back with their findings and where necessary actions will be taken against any party or firm or cooperate service provider that has not acted in conformity with the law.

“We have the right framework and are equipped to deal with the fallouts from the Mossack Fonseca allegations. There is of course the reputational concern but it is important that we as Seychellois defend our financial service sector and where there are actions to be taken and where there are operators that are not acting in conformity we are determined to take action against those that are not operating correctly,” explained the minister.

Minister Adam said the FSA has already taken a number of offshore companies off its register for non-compliance over the last years and there is a possibility that some of these companies may appear in the leaked documents.

The offshore financial services sector contributes US $20 million yearly to the country’s economy through sale of licences but it is the lawyers and accountants who pocket the biggest chunk of the pie, and this could amount to 10 times what the government is collecting.

Seychelles’ offshore financial services sector has grown over the years, from 650 international business companies in 1996 to 140,000 now. There are also about 1,000 registered trusts and over 300 foundations.

The ‘Panama Papers’ have been described as the biggest leak of private documents in history – nearly 40 years of records dating back from 1977 to 2015 featuring information about more than 210,000 companies in 21 offshore jurisdictions.

Nearly 2.6 terabytes worth of data amounting to 11.5 million files have been leaked from the database of Mossack Fonseca – one of the world’s biggest offshore law firms.

Source : Seychelles NATION

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