13th March 2017
The Panama Paper scandal was huge news when it broke in April last year, and it has been in the press once again as more information on those behind it has come to light. The European Parliament’s Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion has revealed that a wide network of lawyers and accountants played a critical role in the biggest financial tax evasion scandal in world history. So who was involved and what can this teach us about the importance of finding trusted advisers?
Bankers, lawyers and accountants
When the scandal broke it was revealed that over eleven billion files from Mossack Fonseca, a Panama based legal-financial firm, exposed banks, corporations and political leaders as complicit in a system which hoarded at least thirteen trillion pounds of global wealth. In response, the Parliament’s Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion has sought to delve into the issue and investigate the role that professional organisations in the tax haven centres of Luxembourg and Switzerland played.
Not only has the committee criticised major financial players abroad – Societe Generale and BNP Paribas – for their part in the scandal, but it has also slammed HSBC which has been linked to over half of the 215,000 firms identified in the scandal. The ‘big four’ accountancy firms in the UK have also been put firmly in the spotlight as enablers of tax avoidance. PwC, KPMG, Deloitte and EY have all been subject to huge criticism for facilitating a culture of tax evasion.
There are many lessons that can be learnt from the Panama Papers scandal but perhaps one for recruitment agencies is the real need to work with trusted advisors when operating. The scandal clearly demonstrates that ‘trusted’ professional organisations are not always operating in legitimate ways. And in order to remain on the right side of the law, seeking advice from a company that knows the legal landscape inside out is paramount to avoid falling foul of tax laws. Get in touch with us to see how we can help.