Panama Papers: RBS, NatWest disclose FCA inquiry
Tuesday, May 10, 2016 at 9:28AM
Richard L. Cassin in Financial Conduct Authority, National Westminster Bank, Panama, Royal Bank of Scotland, Tracey McDermott, United Kingdom

Two related UK banks said in separate U.S. securities filings that the UK's top financial regulator has asked for information about any relationship the banks had with the Panama law firm at the center of the Panama Papers leak or with any individuals named in media coverage about the story.

London-based National Westminster Bank and The Royal Bank of Scotland Group based in Edinburgh used nearly the same language in the SEC disclosures.

NatWest has been part of the The Royal Bank of Scotland Group since 2000.

The UK's Financial Conduct Authority, the banks said, sent a letter on April 4 to RBS. The letter asked for "information about any relationship RBS has with the Panama-based law firm Mossack Fonseca or any individuals named in recent media coverage in connection with the same."

In late April, Tracey McDermott, the acting chief executive of the FCA, told parliament her agency had written to 64 firms in connection with the Panama Papers, the Guardian said. The FCA didn't release details about the inquiries.

The Panama Papers are more than ten million leaked documents from Mossack Fonseca that identify the real owners of secret offshore companies.

On Monday, the International Consortium of Investigative Journalists (ICIJ) launched a searchable database that used the Panama Papers to index 320,000 offshore companies and the people behind them.

The New York Times described the Panama Papers this way:

According to the ICIJ, the documents reveal the hidden assets of 12 current and former world leaders, 128 other politicians and officials, and a range of sports figures and celebrities. . . . The papers include long chains of emails showing how the companies have been used.

News reports based on the documents have linked $2 billion in assets to a childhood friend of President Vladimir V. Putin of Russia, and disclosed the holdings of the Aliyev family, which has long held power in Azerbaijan. The prime minister of Iceland, Sigmundur David Gunnlaugsson, said he would temporarily step aside after the revelation that he and his wife owned an offshore company.

On Thursday, the Obama Administration announced a series of actions to end the use of anonymous corporations in the United States and require disclosure of beneficial owners when foreigners deposit money or buy assets in this country.

The White House said the Panama Papers had "revealed the use of anonymous offshore shell companies" and put the "issues of illicit financial activity and tax evasion in the spotlight."

Transparency International-USA has led a campaign to end the use of anonymous corporations in the United States.

TI-USA said in a release Friday the Obama Administration's actions don't go far enough.

"The rules do not sufficiently capture those who can control an anonymous company because in the definition of 'control,' it conflates senior management and executive officers of corporate entities with the beneficial owners," TI-USA said.

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Here's the disclosure from The Royal Bank of Scotland Group plc
's Form 6-K (Report of Foreign Private Issuer) filed with the SEC on April 29, 2016:

In common with other banks, RBS received a letter from the FCA on 4 April 2016 requesting information about any relationship RBS has with the Panama-based law firm Mossack Fonseca or any individuals named in recent media coverage in connection with the same. RBS has responded to the FCA setting out details of the limited services provided to Mossack Fonseca and its clients and is continuing its internal review, as well as monitoring all new information published.

Here's the Form 20-F (Annual Report) filed with the SEC by National Westminster Bank Plc April 29, 2016:

On 4 April 2016, RBS, in common with other banks, received a letter from the FCA requesting information about any relationship RBS has with the Panama-based law firm Mossack Fonseca or any individuals named in recent media coverage in connection with the same. RBS has responded to the FCA setting out details of the limited services provided to Mossack Fonseca and its clients, and is continuing its internal review, as well as monitoring all new information published.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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