Panama has long been one of the favorite secrecy jurisdictions of the Americas due to its lax financial laws that for many years made it extremely attractive for those looking to move money anonymously. It has also been used for corporate tax evasion.
The reason why companies love Panama— or other offshore jurisdictions— is that full disclosure of beneficial ownership information was not a requirement.
While this made the system susceptible to abuse, it also made it attractive.
While there have been legitimate reasons to operate shell companies, at times as special purpose vehicles, they have also been used for money laundering.
Studies by World Bank have previously indicated that about 70 percent of anonymous shell companies were involved in grand corruption.
Of late, there has been a push to lift the lid off the shell companies and foundations that have been set up offshore as part of global attempts to fight money laundering and tax evasion.
In Kenya, state officers need permission from the Ethics and Anti-Corruption Commission (EACC) to open foreign bank accounts.
Last year, an audit by the EACC found that 191 public officers were operating foreign accounts.
But these were mainly embassy officials in the Ministry of Foreign Affairs.
While the EACC Chief Executive Twalib Mbarak had notified Foreign Affairs Principal Secretary Macharia Kamau, through a letter dated September 20, 2020, the number of accounts held by state officers is still unknown – and remains hidden.
In 2015, EACC issued a 49-day ultimatum to public officers operating bank accounts outside the country without approval to either close them or face the law.
So far, nobody appears to have faced prosecution. This followed a revelation that Kenyans were holding close to Sh51 billion abroad in 463 HSBC private banking arm’s accounts.
While not all offshore companies are used to hide the loot, others have been opened for ease of business and to protect companies.
As more papers continue to emerge on offshore accounts, it now appears that the hiding space is getting narrow.
c/o Nation Africa
