PANAMA CITY: Twenty-seven people went on trial on Monday in connection with the “Panama Papers” tax evasion scandal, with one of the main defendants denying accusations of money laundering.

The 2016 leaks revealed how many of the world’s wealthy stashed assets in offshore companies, exposing high-profile personalities and triggering scores of investigations around the globe.

The defendants on trial include Jurgen Mossack and Ramon Fonseca Mora, the founders of the now-defunct law firm at the centre of the scandal, as well as other lawyers and former employees.

They are charged with money laundering and if convicted face up to 12 years in prison.

Leaked trove of 11.5m files from a law firm implicated influential figures, including billionaires, politicians and sports stars

Mossack, 76, said at the hearing that he was “not responsible” for alleged crimes.

Earlier he told journalists outside the court he was “very optimistic” and that “if there is real justice” then he would be cleared.

Defence lawyer Dionicio Rodriguez said the case was “a trial against the Panamanian legal profession” because “activities are being prosecuted that are legal in many other countries in the world.” Fonseca, 71, did not attend because he was in the hospital, according to his lawyer.

The leaked trove of 11.5 million files from the law firm Mossack Fonseca implicated influential figures including billionaires, politicians and even sports stars.

Icelandic prime minister Sigmundur David Gunnlaugsson was forced to resign after it was revealed his family had offshore accounts. Others implicated included former British premier David Cameron, football star Lionel Messi, Argentina’s then-president Mauricio Macri and Spanish filmmaker Pedro Almodovar, to name but a few.

The files were leaked to a German newspaper, Sueddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists. Many of those caught up in the scandal put forward reasons to explain their offshore presence and said they did not act illegally. Even so, Mossack Fonseca said in 2018 that it would close due to “irreparable damage” to its reputation.

‘More action needed’

The scandal dealt a severe blow to Panama’s image as an offshore financial hub. The country subsequently carried out legal reforms that led to its removal from the Financial Action Task Force’s “gray list” of jurisdictions under increased monitoring.

The Paris-based organisation decided that Panama had made progress in the fight against money laundering and terrorism financing. But the Central American nation remains on a European Union tax haven blacklist.

“Eight years later, changes are happening, but more action is needed,” Olga de Obaldia, executive director of Transparency Inter­national in Panama, said.

The fact that some of its current laws against money laundering did not exist when the Panama Papers revelations emerged could complicate efforts to achieve convictions, according to legal experts.

“The crux of the matter is whether a crime was committed in Panama or not under the regulations at the time,” Carlos Barsallo, a jurist and former head of Transparency International’s Panama office, said.

According to Barsallo, in 2021 the Supreme Court exonerated a Mossack Fonseca employee by indicating that her actions at that time were not a crime in Panama.

“It may generate confusion and frustration in the international community if this is the outcome after so many years and so much news,” he said.

Published in Dawn, April 9th, 2024

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