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  Panama leaks: New Zealand best place to hide money

Panama leaks: New Zealand best place to hide money

Published : May 10, 2016, 6:44 am IST
Updated : May 10, 2016, 6:44 am IST

Mossack Fonseca writes apology to Chinese bank over controversy

Mossack Fonseca writes apology to Chinese bank over controversy

Wealthy Latin Americans are using secretive, tax-free New Zealand shelf companies and trusts to help channel funds around the world, according to a report on Monday based on leaks of the so-called Panama Papers.

Pressure is mounting on Prime Minister John Key to take action after local media analysed more than 61,000 documents relating to New Zealand that are part of the massive leak of data from Mossack Fonseca, a Panama-based law firm. The papers have shone spotlight on how the world’s rich take advantage of offshore tax regimes.

Mossack Fonseca actively promoted New Zealand as a good place to do business due to its tax-free status, high levels of confidentiality and legal security, according to a joint report by Radio New Zealand, TVNZ and investigative journalist Nicky Hager.

Mr Key said it was “utterly incorrect” that New Zealand was a tax haven, adding he was open to changing rules around foreign trusts if advised by a review or the OECD.

“If there’s any need for change in this area, the government will consider it and if necessary, take action,” Mr Key told reporters. The government was asking the ministry of justice to move quickly on rules already under consideration to tighten anti-money laundering requirements for lawyers, real estates and accountants, he added.

Meanwhile, Mossack Fonseca wrote an apology to a Chinese banking client as it seeks to shore up its Asian business following a massive leak of financial data in May.

The letter was written in response to queries from the Chinese bank about compliance with global financial standards. It is not known whether there were similar communications with other financial institutions, but the letter shows at least one bank client in the firm’s biggest market was concerned by issues raised in the publicity surrounding the leak.

In the letter, the firm said it “deeply regrets” any misuse of its services or the companies it set up.

Location: New Zealand, Wellington