Canadian lawyer Martin Kenney, who specializes in chasing down money internationally, says the Panama-based firm at the centre of a large leak of documents about offshore companies has a responsibility 鈥渢o know their client.鈥�
Kenney, who is the brother of Conservative MP Jason Kenney, told CTV鈥檚 Power Play that law firm Mossack Fonseca鈥檚 past suggestions that they don鈥檛 bear responsibility for what companies do after they are formed is 鈥渏ust silly.鈥�
鈥淥f course they have responsibility,鈥� he said.
Kenney said that offshore financial services agencies are required to collect data about the identities of the customers they assist so that global fraud investigators and law enforcement officers can seek court orders to get that information when needed.
The law firm鈥檚 co-founder said in Spanish-language on Panamanian television last month that the firm has no responsibility for what clients do with the offshore companies that the firm sells, and that blaming Mossack Fonseca for what people do with their companies would be like blaming a carmaker 鈥渋f the car was used in a robbery,鈥� according to the
Mossack Fonseca released a statement Monday stating, in part, that it 鈥渞outinely (denies) services to individuals who are compromised or who fail to provide information we need in order to comply with 鈥渒now your client鈥� obligations or when we identify other red flags through our due diligence.鈥� (See the full statement below.)
Kenney described the firm as 鈥渙ld-fashioned and aggressive.鈥�
He added that there is 鈥渁n older legacy culture in the industry from the 70s and 80s where there was no regulation -- where you could go as a foreign company off shore, no questions asked, no one knew who owned it and that was the end of the story.鈥�
Kenney said things started to change under U.S. President Ronald Reagan during his so-called war against drugs, and that there was an 鈥渆xplosion鈥� of global financial regulations after Sept. 11, 2001, in an effort stop the funding of terrorism.
Kenney said that Mossack Fonseca -- which he pointed out operates in about 40 locations -- is merely one of many firms helping set up confidential companies around the world, and that the 200,000 companies in the leak make up about 10 per cent of the world鈥檚 鈥渙ffshore companies.鈥�
Kenney has long advocated for more aggressive laws and regulations, although he pointed out Monday in the Monday that 鈥渙nly a small proportion of offshore entities are vehicles used for money laundering, fraudulent asset concealment or tax evasion.鈥�
He also stated in the op-ed, 鈥渋n begrudging defence of Mossack Fonseca,鈥� that 鈥渉igh-volume, low-fee models that company formation agents operate cannot include enhanced due-diligence checks on every user of offshore services,鈥� due to 鈥渂asic economics.鈥� He added that higher fees charged to incorporate companies could cover the costs of 鈥渆nhanced due diligence across the board.鈥�
Kenney told Power Play that there is a grey area between tax 鈥渁voidance鈥� which is perfectly legal and tax 鈥渆vasion鈥� which is not, but that he believes most humans 鈥渁re at risk of making bad choices ethically -- without rules of supervision, transparency and openness.鈥�
