Taking Panama to task: Women's rights trampled by financial secrecy

[Judi Lynn]

July 16, 2020 by Luke Holland

Just over four years have passed since a huge archive of secret documents from the Panamanian law firm Mossack Fonseca, containing wide-ranging details of fraud, tax evasion and other illegal financial schemes, were leaked to a German newspaper provoking a global scandal. The public outcry that followed embroiled political leaders, celebrities and business titans from across the world, while the Panamanian Government itself faced intense international pressure over its facilitation of shady cross-border finance.

In the years since, Panama has taken some tentative steps towards cleaning up its act, but these have been manifestly inadequate to make a meaningful difference. Moreover, the country’s continuing facilitation of financial secrecy is likely to be undermining human rights in many other jurisdictions. As demonstrated in a new Tax Justice Network submission to the UN Committee on the Elimination of Discrimination Against Women, Panama’s financial system continues to expose other countries to a significant risk from illicit financial flows. This includes abusive cross-border tax practices, which syphon away resources needed for the fulfilment of women’s rights.

The extraterritorial impacts of both corporate tax havens and financial secrecy jurisdictions have become an issue of increasing concern to human rights monitoring bodies in recent years. International human rights law makes it clear that states have a duty to cooperate to maximise the resources available for the fulfilment of human rights, and to take action to prevent behaviours by private actors within their jurisdictions that might be harmful to human rights “regardless of whether the affected persons are in their territories”.

In order for tax authorities to be able to determine who owes what in their jurisdiction, they need to know who are the real beneficial owners of companies, trusts and foundations – both those that are registered within their borders and those foreign entities with financial links to their territory. Corporations and economic elites seeking to avoid paying their fair share of tax, often by transferring their wealth out of the country where it was generated, use complex legal structures and vehicles to conceal this information.

More:
https://www.taxjustice.net/2020/07/16/taking-panama-to-task-womens-rights-trampled-by-financial-secrecy/