Worldwide scramble to contain Panama offshore accounts fallout
Governments around the world are scrambling to contain the fallout from the publication of thousands of names of rich and powerful people who conducted offshore financial activity through a Panamanian law firm.
China dismissed as "groundless" reports that relatives of current and retired politicians, including President Xi Jinping, own offshore companies. The state media are ignoring the reports, and search results for the words "Panama documents" have been blocked on websites and social media.
Iceland's prime minister has vowed to not resign despite thousands of angry protesters demanding he step down and call new elections after the leaks showed possible links to an offshore company that could represent a serious conflict of interest.
And Ukraine's president was accused of abusing his office and of tax evasion by moving his candy business offshore, possibly depriving the country of millions of dollars in taxes.
The reports are from a global group of news organisations working with the Washington-based International Consortium of Investigative Journalists. They have been processing the legal records from the Mossack Fonseca law firm that were first leaked to the German Sueddeutsche Zeitung newspaper.
Shell companies are not necessarily illegal. People or companies might use them to reduce their tax bill legally, by benefiting from low tax rates in countries like Panama, the Cayman Islands and Bermuda.
But the practice is frowned upon, particularly when used by politicians, who then face criticism for not contributing to their own countries' economies.
Because offshore accounts and companies also hide the names of the ultimate owners of investments, they are often used to illegally evade taxes or launder money.
China's Foreign Ministry spokesman Hong Lei said he would not discuss the reports further and declined to say whether the individuals named would be investigated.
"For these groundless accusations, I have no comment," Hong told reporters at a regularly scheduled news conference.
In Algeria, a company that manages the finances of the industry minister says he is linked to an offshore firm created in Panama, but says its activities are frozen while he is serving in the government.
French newspaper Le Monde reported that Abdessalam Bouchouareb runs a Panamanian company called Royal Arrival Corp., prompting accusations that he is hiding assets abroad and evading taxes.
Contacted by The Associated Press, Bouchouareb declined to comment, referring to a statement released by his Luxembourg-based financial management company CEC.
The statement says CEC created Royal Arrival Corp. to manage Bouchouareb's assets, but when the minister learned about the new company, he ordered its activities frozen as long as he is in the government. Royal Arrival Corp. "has never been active in any country," the statement says.