The Panama law firm at the center of the biggest data leak in history had connections to dozens of firms and individuals on sanctions blacklists by the United States and international organizations, according to media groups that reviewed the documents.
Mossack Fonseca acted on behalf of at least 33 company shareholders, directors and other beneficiaries who were under sanctions by the U.S. Treasury Department, the European Union and the United Nations. They were targeted for a range of violations including having links to North Korea's nuclear weapons program, Russia's annexation of Ukraine's Crimea and human rights abuses in Syria.
While Mossack Fonseca worked with some of the companies and individuals prior to them being blacklisted, in some instances it continued to act on their behalf after they were placed on the blacklists, according to information found in the files.
The BBC identified one such firm, DCB Finance, which it said was jointly controlled by Kim Chol Sam, a North Korean official, and Nigel Cowie, a British national who was the chief executive of the sanctioned financial firm Daedong Credit Bank.
Mossack Fonseca said it "never knowingly" conducted business with sanctioned companies or individuals. However, it admitted it should have done more to determine where DCB Finance's owners were based — the North Korean capital Pyongyang as it turned out. Cowie was not personally sanctioned. DCB Finance was sanctioned for its alleged connections to a separate financial institution suspected of helping fund North Korea's nuclear program.
A sanction typically involves an official order to limit or stop trade and business with countries, companies or individuals who commit or are accused of offenses.
The latest revelation comes amid a deepening global fallout over Mossack Fonseca's 11.5 million internal documents that were hacked and then shared with a German newspaper. The published articles exposed how some of the world's wealthiest and most powerful people have connections to offshore bank accounts. The source of the leak is still not known. It has also not been determined to what extent these accounts were used to illegally avoid tax or shelter illicit transactions.
The unprecedented data breach has nevertheless implicated a range of politicians, their family members and associates, government officials and even celebrities such as the actor Jackie Chan, in what appears to be a huge ring of complicated deceit aimed at hiding vast riches and bypassing the prying eyes of global regulators.
In Iceland, massive protests took place outside parliament Monday after it was revealed that Prime Minister Sigmundur Gunnlaugsson owned an offshore account with his wife at a time when the country's banks were collapsing during the financial crisis. His opponents are seeking his resignation because they say this offshore account represented a major conflict of interest. Gunnlaugsson negotiated a deal with the banks' claimants while being a claimant.
“I have not considered quitting because of this matter nor am I going to quit because of this matter,” Gunnlaugsson told Iceland's parliament. "It is important that the government can finish its work,” he said, referring to the nation's economic recovery. He faces a confidence vote as early as Thursday.
Vísir, an Icelandic news service, nevertheless reported Tuesday that Gunnlaugsson would resign and hold a snap election if he was not able to win the support of his government's coalition partner, the Independence Party. More demonstrations were planned Tuesday.
The governments of Australia, France, Spain and the U.S. said they are investigating whether their citizens are implicated in the disclosures. Relatives of current and former Chinese leaders are listed in the cache of files, but Chinese state media has been blocking the reports, according to journalists in the country.
Global Times, an official newspaper of China's ruling Communist Party, denounced western media for the leaks, saying: "In the long-run, it (the leaks) will become a new means for the ideology-allied Western nations to strike a blow to non-Western political elites and key organizations."
Meanwhile, British Prime Minister David Cameron was under increasing pressure over the affair because his late father, Ian Cameron, was one of the people whose name appeared on the leaked documents. Cameron senior, a stock broker, set up an offshore investment fund that avoided paying tax in the United Kingdom by having its directors hold board meetings in Switzerland and the Bahamas rather than London.
Downing Street called the discovery a "private matter." It also said the prime minister does not hold any shares in the company — Blairmore — established by his father. However, the issue may haunt Cameron because he has called for greater transparency over tax havens and warned tax evaders that they would be caught. The leak showed that Mossack Fonseca registered more than 100,000 offshore firms in the British Virgin Islands, a British overseas territory.
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