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South Africa Initiates Investigation Of Panama Accounts

by Lorys Charalambous,, Cyprus

07 April 2016

Noting reports that certain South Africans that may be linked to offshore bank accounts in the so-called "Panama papers," the country's Ministry of Finance has confirmed that the relevant agencies (including the South African Revenue Service, the Financial Intelligence Center, and the South African Reserve Bank) always investigate such reports to ensure compliance with the law.

The leak concerns more than 11.5m documents belonging to Panamanian law firm Mossack Fonseca. The data includes emails, financial spreadsheets, passports, and corporate records relating to the ownership of bank accounts and companies in 21 offshore jurisdictions. It covers a nearly 40-year period, through to the end of 2015.

The Ministry noted that "there are many transactions on a daily basis between South Africans and the rest of the world, and holding funds in an offshore bank is by itself not illegal, as long as the necessary approvals and disclosures have been made to the relevant authorities. Funds in an offshore account may contravene exchange control regulations and tax laws if the source of the funds has not been disclosed to the appropriate authorities."

The Treasury welcomed the release of such information, "which, like the recent release of information related to the clients of HSBC, provides the basis for authorities to act against those who illegally move funds out of South Africa."

"The world is systemically narrowing the scope for those who want to hide their offshore assets and avoid paying their taxes due to the South African [fiscal authorities]," it concluded. "It is in the interests of all those hiding their assets to come clean and disclose, and the Government offers such persons a way to legitimize their financial affairs before they are caught out," through the Government's voluntary disclosure program.

TAGS: South Africa | compliance | tax | tax compliance | law | banking | ministry of finance | offshore | offshore banking | regulation | Panama | Africa

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