Austrian Financial Market Regulator to Investigate Two Banks over Panama Papers Leak

By Staff Writer

Apr 06, 2016 08:53 AM EDT

When International Consortium of Investigative Journalists (ICIJ) published the report on Sunday, many are surprised. As the document exposed how some of the world's most powerful people used offshore bank accounts to hide their wealth and avoid taxes.

The document is known as Panama Papers, named after the country where Mossack Fonseca law firm resides. The firm help companies and individuals to cover up their business deal with anonymous shell companies. Many big banks also reportedly involved in the shady deals.

ICIJ is a global network of more than 190 investigative journalists in more than 65 countries who collaborate on in-depth investigative stories. After years of effort, the investigative journalists network exposed 214,000 shell companies which are operated by Mossack Fonseca to help their clients laundering money in offshore accounts.

German newspaper Süddeutsche Zeitung which was contacted by ICIJ over a year ago now has 2.6 terabytes of data in a 11.5 million documents. The data listed all shell companies managed by Mossack Fonseca law firm.

According to Süddeutsche Zeitung, the data provides rare insights into a world that can only exist in the shadows. It also provides evidences on how the global industry, led by major banks, legal firms, and asset management companies, is involved in a dark business. They secretly manage estates and assets of the world's rich and famous, ranging from politicians, FIFA officials, fraudsters and drug smugglers, to celebrities and professional athletes.

Following the report, Austrian financial market authority is investigating two Austrian banks which were named in the report spanning the period of almost 40 years from 1977. The banks are Raiffeisen Bank International and Hypo Landesbank Vorarlberg.

Business Insider reported that two Austrian media were among the news organizations that conducted joint investigation in ICIJ. In some documents, Raiffeisen Bank International was mentioned to have a connection with a confectionery company owned by Ukrainian President Petro Poroshenko. While also providing a $115 million loan to Linquist Holdings Limited, a firm based in British Virgin Islands,

New York Times reported that there may be relatively few Americans named in the documents, because it is fairly easy to form shell companies in the United States. As economists and senior adviser to the Tax Justice Network James Henry said, "Basically, we have an onshore haven industry in the U.S. that is as secretive as anywhere."

Following the leaked of massive documents in Panama Papers, FMA as the financial market regulator of Austria will investigate two Austrian Banks. The banks, Raiffeisen Bank International and Hypo Landesbank Vorarlberg were mentioned in the document in assisting money laundering scheme.

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