UK Labour party leader Jeremy Corbyn and the Swiss regulator are the latest high profile figures to issue warnings to bankers and offshore financial institutions, as the aftermath of the ‘Panama Papers’ document continues.
Speaking at the annual media conference of the Swiss regulator, FINMA, yesterday, Mark Branson , the organisation’s chief executive, said that combating money laundering was the “duty of every banker”, as he warned that Switzerland’s banks needed to “do more” to stamp out money laundering.
Branson’s comments followed similar warnings issued by the UK’s Financial Conduct Authority (FCA), earlier this week, when it warned UK banks that they would have “just one week” to declare any connection to the Panamanian law firm at the centre of the storm – Mossack Fonseca.
Corbyn’s warning, meanwhile, consisted of comments that the UK government should consider taking control of the tax affairs of its overseas territories and three Crown Dependencies, if they do not comply with UK law.
Corbyn’s warning came as he was speaking to the BBC in Harlow, Essex, before a speech to launch the Labour Party’s local election manifesto on Tuesday.
In his speech, as reported in the Jersey Evening Post, Corbyn said that territories were encouraging tax avoidance “on an industrial scale”, to the detriment of public services in the UK.
As reported, the reported leak unveiled on Sunday of more than 11 million documents from a Panama law firm has hit the global cross-border financial services industry hard, as it suggests that recent efforts to abolish tax evasion through the introduction of new regulations and increased automatic exchange of information hasn’t been working.
Some are calling it the biggest leak of confidential information ever to hit the global financial services industry.
The leak has fueled widespread criticism of offshore finance centres, which, it is being alleged, are still helping wealthy and large corporations avoid tax, launder money and conceal business arrangements.
‘Not a victim-less crime’
In his comments, FINRA’s Branson said that money laundering was not a “victim-less crime”, but that it allowed “criminals to profit from breaking the law”.
“It also facilitates corruption and the abuse of power and privilege,” he continued.
“Corruption and tax fraud are the natural enemies of progress, especially in developing countries.
“Switzerland is the world’s largest centre for cross-border wealth management for private clients, and therefore naturally exposed to a greater risk of money laundering.
“Switzerland’s mechanisms for combating it must be correspondingly effective. Switzerland has a duty to be at the forefront of fighting money laundering.”
Switzerland is understood to be second only to Hong Kong in terms of the number of firms said to have made use of the controversial Panama-based law firm Mossack Fonseca, based on the leaked documents.