Kenneth Rijock

Kenneth Rijock

Wednesday, June 1, 2016

ARE BANKS THAT FORMED OPAQUE COMPANIES THROUGH MOSSACK HIGH RISK FOR MONEY LAUNDERING ?


The Panama Papers has drawn the financial world's attention to those banks that formed the most bearer share companies, through the law firm of Mossack and Fonseca. The argument, which is sound, is that, if these banks ordered hundreds of opaque BVI companies, and Panamanian foundations, through Mossack, how do you, as a compliance officer, trust that bank's clients not to be financial criminals, tax evaders, corrupt government officials, and sundry other fraudsters ? The answer is, you don't.

To put it another way, if an international bank routinely worked with Mossack and Fonseca, whose primary business was the formation of non-transparent offshore corporations, as well as assisting in money laundering for clients, then how can your bank, or your clients, feel secure about working with their clients ? There is a heightened risk that their clients are not exactly who they appear to be, which raises risk levels across the board, for your bank, as well as your customers.

Here are the names, as taken by researchers from the Panama Papers, of the international financial institutions who ordered the largest number of shell companies, from Mossack and Fonseca:

1.  Rothschild Trust (Guernsey) Ltd.
2. Landsbanki Luxembourg SA.
3. Societe Generale Bank & Trust (Luxembourg).
4. Coutts & Co., Trustees (Jersey) Ltd.
5. UBS AG (Rue de Rhone).
6. HSBC Private Bank (Suisse) SA.
7. HSBC Private Bank (Monaco) SA.
8. Credit Suisse Channel Islands Ltd.
9. Banque J Safra Saracin (Luxembourg) SA.
10. Banque Internationale Luxembourg SA (BIL).

Consider bank risk elevated for all the above financial institutions, due to their extensive business with the  Mossack and Fonseca law firm, for the formation of offshore companies.

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