Panama Papers

=== Sanctioned clients ===
{{See also|Office of Foreign Assets Control|Due diligence| Know your customer |Financial Action Task Force on Money Laundering |Politically exposed person|Economic sanctions |International sanctions}}
Many firms and individuals take advantage of the anonymity of offshore shell companies to circumvent international sanctions. More than 30 Mossack Fonseca clients were at one time or another blacklisted by the [[US Treasury Department]], including businesses linked to senior figures in Russia, Syria and North Korea.<ref name="economist.com">{{Cite news|title=A torrential leak|newspaper=The Economist|url=https://www.economist.com/international/2016/04/09/a-torrential-leak|access-date=August 19, 2022|issn=0013-0613}}</ref>

Three Mossack Fonseca companies started for clients of Helene Mathieu Legal Consultants were later sanctioned by the US Treasury's [[Office of Foreign Assets Control]] (OFAC). Pangates International Corporation was accused in July 2014 of supplying the government of Syria with "a large amount of specialty petroleum products" with "limited civilian application in Syria". The other two, Maxima Middle East Trading and Morgan Additives Manufacturing Co, and their owners Wael Abdulkarim and Ahmad Barqawi, were said to have "engaged in deceptive measures" to supply oil products to Syria.<ref name=CBClawyer>{{cite news |url=http://www.cbc.ca/news/canada/montreal/panama-helene-mathieu-dubai-1.3519760 |title=Panama Papers: Quebec lawyer based pin Dubai linked to Mossack Fonseca: Helene Mathieu Legal Consultants worked to incorporate 3 companies that now face economic sanctions |author=Salimah Shivji |publisher=CBC News |date=April 4, 2016 |access-date=April 20, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160422135758/http://www.cbc.ca/news/canada/montreal/panama-helene-mathieu-dubai-1.3519760 |archive-date=April 22, 2016 }}</ref>

Mossack Fonseca also ran six businesses for [[Rami Makhlouf]], cousin of Syrian president [[Bashar al-Assad]], despite US sanctions against him.<ref name=bbcSyr>{{cite web |url=https://www.bbc.com/news/world-35959604 |title=Panama Papers: Mossack Fonseca 'helped firms subject to sanctions' |first=Simon |last=Cox |publisher=BBC |date=April 4, 2016 |access-date=April 6, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160405160118/http://www.bbc.com/news/world-35959604 |archive-date=April 5, 2016 }}</ref> Internal Mossack Fonseca documents show that in 2011 Mossack Fonseca rejected a recommendation by their own compliance team to sever ties to Mr. Makhlouf. They agreed to do so only months later. The firm has said it never knowingly allowed anyone connected with rogue regimes to use its companies.<ref name="economist.com"/>

[[Frederik Obermaier]], co-author of the Panama Papers story and an investigative reporter at the German newspaper ''[[Süddeutsche Zeitung]]'', told ''[[Democracy Now]]'': "[[Mossack Fonseca]] realised that [[Rami Makhlouf|Makhlouf]] was the cousin, and they realised that he was sanctioned, and they realised that he's allegedly one of the financiers of the Syrian regime. And they said, 'Oh, there is this bank who still does business with him, so we should still keep with him, as well'."<ref>{{cite news |title=Panama Papers: World Leaders from Iceland to Argentina Exposed in Massive Tax Evasion Scheme |url=http://www.democracynow.org/2016/4/5/panama_papers_world_leaders_rich_criminals |access-date=April 23, 2016 |work=Democracy Now! |date=April 5, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160423181546/http://www.democracynow.org/2016/4/5/panama_papers_world_leaders_rich_criminals |archive-date=April 23, 2016 }}</ref>

[[HSBC Bank (Europe)|HSBC]] also appeared to reassure [[Mossack Fonseca]] not only that it was "comfortable" with Makhlouf as a client but suggested there could be a rapprochement with the [[Al-Assad family|Assad family]] by the US. Makhlouf is already known to be a long-standing client of HSBC's Swiss private bank, holding at least $15 million with it in multiple accounts in 2006.<ref name="ESGoodwaySyria">{{cite news |last1=Goodway |first1=Nick |title=Panama scandal grows for HSBC over Syria links |url=https://www.standard.co.uk/business/panama-scandal-grows-for-hsbc-over-syria-links-a3218276.html |access-date=April 23, 2016 |work=Evening Standard |date=April 5, 2016 |language=en |url-status=live |archive-url=https://web.archive.org/web/20160426014451/http://www.standard.co.uk/business/panama-scandal-grows-for-hsbc-over-syria-links-a3218276.html |archive-date=April 26, 2016 }}</ref> The Panamanian files also show HSBC provided financial services to a Makhlouf company called Drex Technologies, which HSBC said was a company of "good standing".<ref name="ESGoodwaySyria" />

DCB Finance, a Virgin Islands-based shell company founded by North Korean banker [[Kim Chol-sam]]<ref name=USTreas>{{cite web |url=https://www.treasury.gov/press-center/press-releases/Pages/jl1994.aspx |title=Treasury Sanctions Bank, Front Company, and Official Linked to North Korean Weapons of Mass Destruction Programs: Action Targets North Korea's Use of Deceptive Financial Practices to Support its Weapons Programs |author=US Department of the Treasury |access-date=April 6, 2016 |date=June 27, 2013 |url-status=live |archive-url=https://web.archive.org/web/20160407224019/https://www.treasury.gov/press-center/press-releases/Pages/jl1994.aspx |archive-date=April 7, 2016 }}</ref> and British banker [[Nigel Cowie]],<ref name=Cowie>{{Cite news |url=https://www.theguardian.com/news/2016/apr/04/panama-papers-briton-set-up-firm-allegedly-used-by-north-korea-weapons-sales |title=British banker set up firm 'used by North Korea to sell weapons' |last1=Garside |first1=Juliette |date=April 4, 2016 |last2=Harding |first2=Luke |newspaper=The Guardian |language=en |issn=0261-3077 |access-date=April 5, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160404223335/http://www.theguardian.com/news/2016/apr/04/panama-papers-briton-set-up-firm-allegedly-used-by-north-korea-weapons-sales |archive-date=April 4, 2016 }}</ref> also ignored international sanctions and continued to do business with [[North Korea]] with the help of the Panamanian firm. The [[United States Department of the Treasury|US Treasury Department]] in 2013 called DCB Finance a front company for [[Daedong Credit Bank]] and announced sanctions against both companies for providing banking services to North Korean arms dealer [[Korea Mining and Development Trading Corporation]],<ref name=USTreas /> attempting to evade sanctions against that country, and helping to sell arms and expand North Korea's [[North Korea and weapons of mass destruction|nuclear weapons programme]]. Cowie said the holding company was used for legitimate business and he was not aware of illicit transactions.<ref name=Cowie />

Mossack Fonseca, required by international banking standards to avoid [[money-laundering]] or fraudster clients, is, like all banks, supposed to be particularly alert for signs of corruption with [[politically exposed person]]s (PEP), in other words, clients who either are or have close ties to government officials. However they somehow failed to turn up any red flags concerning Tareq Abbas even though he shares a family name with the president of Palestine, and sat on the board of directors of a company with four fellow directors the firm did deem PEP because of their ties to Palestinian politics. Yet Mossack Fonseca actually did and documented [[due diligence]] research, including a Google search.<ref name=son>{{cite news |url=http://www.haaretz.com/middle-east-news/1.713347 |title=Panama Papers: Leaks Reveal Abbas' Son's $1m Holding in Company With Ties to Palestinian Authority |work=Haaretz.com |url-status=live |archive-url=https://web.archive.org/web/20160619131126/http://www.haaretz.com/middle-east-news/1.713347 |archive-date=June 19, 2016 |date=April 7, 2016 |last1=Blau |first1=Uri |last2=Dolev |first2=Daniel }}</ref>