The Panama Papers | KPMG | AU

The Panama Papers

The Panama Papers

In order to better understand how financial institutions have responded to the release of the Panama Papers to date, KPMG conducted a global survey of financial institutions.

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As widely reported by global news services on 9 May 2016, the International Consortium of Investigative Journalists (ICIJ) released a database containing information pertaining to over 200,000 offshore companies based on more than 11.5 million documents that had been leaked to the ICIJ from the files of the Panamanian law firm Mossack Fonseca.

The leaked documents – dubbed the Panama Papers – are reported to date back more than 4 decades and allegedly reflect the law firm’s involvement in assisting in the creation of secret shell companies and offshore accounts, often for prominent persons, including in connection with alleged illegal activities.

The Panama Papers will continue to present challenges for companies who have had direct or indirect dealings with the offshore companies and their owners identified in the Panama Papers.

In particular, financial institutions have become well aware of the financial, reputational and regulatory risks connected with being associated with alleged or actual misconduct.

Survey highlights reported by financial institutions

  • Most respondents reported that they were actively reacting to the release of the Panama Papers in order to gauge their risk exposure.
  • The majority of respondents reported that either their Anti-Money Laundering (AML)/Financial Intelligence Unit (FIU) or Compliance Departments were leading the response with active input from the institution’s senior management and/or Board of Directors.
  • While some reported performing full searches of their customer base against all of the names in the ICIJ database, others reported employing targeted risk-based approaches and only searching against portions of the ICIJ database.
  • In the months since the release of the Panama Papers, respondents reported that the release has impacted them, with about one quarter reporting that they have filed suspicious transaction or activity reports and over half indicating that they have been contacted by regulatory/law enforcement authorities regarding their response to the leak.

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