G-20 threatens penalties against tax havens after Panama Papers

The logo of Panama law firm Mossack Fonseca is seen at the entrance of its Hong Kong office on April 14, 2016.
The logo of Panama law firm Mossack Fonseca is seen at the entrance of its Hong Kong office on April 14, 2016.PHOTO: AFP

(Bloomberg) - Group of 20 economies threatened to penalise tax havens that do not share information on their banking clients, after the leak of the Panama Papers provoked a global uproar over tax evasion.

The G-20 will consider "defensive measures" against financial centers and jurisdictions that don't commit to an international standard that requires the exchange of information about account holders, the group's finance ministers and central bankers said on Friday (April 15) in a statement after meeting in Washington.

The group said it would work with the OECD to come up with criteria for identifying "non-cooperative jurisdictions," adding that improving the transparency on who controls legal tax entities is vital to the international financial system.

 

The leak this month of offshore financial records, known as the Panama Papers, exposing billions of dollars in assets hidden in tax havens around the world, has set off a global furore.

 

Seeking to contain the fallout from the scandal - implicating everyone from world leaders to prominent business people - some governments have pledged to crack down on tax evasion and money laundering to help regain public trust.