German Banks Enmeshed in Panama Papers Leak
World Economy

German Banks Enmeshed in Panama Papers Leak

After journalists published a tranche of documents exposing the shadowy world of offshore business, two German banks have said helping customers set up shell companies abroad is not illegal per se.
The two German financial institutions specifically mentioned in media reports as having helped high-ranking politicians, celebrities and sports stars hide their money abroad were Deutsche Bank, Germany’s largest lender, and the Hamburg-based Die Berenberg bank, DW reported.
The allegations were part of the so-called Panama Papers, a massive trove of leaked emails, PDFs and other records that expose a world of letterbox companies and business arrangements that until recently had been largely hidden from public view.
The Panama Papers were first obtained by reporters at the German daily “Suddeutsche Zeitung,” and on Sunday, the head of the paper’s investigative unit suggested to a German TV host that every bank in Germany was somehow implicated.
Both institutions promptly denied any wrongdoing. Speaking to the news agency DPA, a spokesman for Berenberg’s Swiss subsidiary insisted there was nothing inherently illegal about dealing with offshore companies.
“This is, of course, done in line with legal regulations, but it does require greater due diligence on the part of the banks,” he said, noting that such accounts were “permanently monitored.”
Deutsche Bank, for its part, said in an emailed statement that it had improved protocols for accepting new customers and was “fully aware of the significance of this matter.”
“As far as the Deutsche Bank is concerned, we verify with whom we do business, making sure that our guidelines, procedures and systems are designed to comply with all applicable laws and regulations,” the statement said.

  Regulators React
So far, state prosecutors and tax authorities from around the world have pledged to get to the bottom of whether any national laws had been broken.
The German government, which has come down hard on tax evaders since Wolfgang Schauble took control of the finance ministry, said it saw the revelations as an opportunity to reinforce global efforts to curb tax fraud and money laundering.
“We hope the current debate will turn up the heat,” finance ministry spokesman Martin Jager said Monday.
Meanwhile, Credit Suisse and HSBC, two of the world’s largest wealth managers, dismissed on Tuesday suggestions they were actively using offshore structures to help clients cheat on their taxes, Reuters reported.
Credit Suisse CEO Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets. Separately, HSBC said the documents pre-dated a thorough reform of its business model. “The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years,” said Gareth Hewett, a Hong Kong-based spokesman for HSBC.

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