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'Panama Papers' show Syria regime circumvented sanctions: report

A picture released by the official Syrian Arab News Agency on March 30, 2016 shows President Bashar al-Assad speaking to a journalist during an interview with Russia's RIA Novosti state news agency in the Syrian capital Damascus
SANA/AFP
Spanish and French prosecutors announce probes into allegations

Syria's regime has been able to circumvent international sanctions and fund its war effort through shadow companies, according to leaked "Panama Papers" seen by French daily Le Monde.

The newspaper reported on Monday that three Syrian companies, Pangates International, Maxima Middle East Trading, and Morgan Additives Manufacturing, used the services of Panama-based law firm Mossack Fonseca to create shadow companies in the Seychelles.

Le Monde, a partner in the year-long worldwide media investigation into a trove of 11.5 million documents leaked from Mossack Fonseca, said the shadow companies were "a way for the Syrian regime to circumvent international sanctions imposed since the start of the war."

The three firms are under US sanctions for allegedly providing petroleum supplies to President Bashar al-Assad's regime likely to be used by his military, including aviation fuel.

Since the start of Syria's war in 2011, tens of thousands of people have been killed and thousands of homes destroyed in air raids and barrel bomb strikes.

Le Monde said the leaked documents show Mossack Fonseca continued to work with at least one of the companies, Pangates, until at least nine months after the sanctions were announced.

Pangates belongs to the Damascus-based Abdulkarim group, which is close to the Syrian government, Le Monde said.

The probe, coordinated by the International Consortium of Investigative Journalists, has exposed a tangle of financial dealings by global elites.

Assad's billionaire cousin Rami Makhlouf, who is facing sanctions, was also shown by the leaks as long having registered companies in tax havens.

Syria's most notorious and powerful tycoon, Makhlouf founded shadow companies such as Drex Technologies SA, which was registered in the British Virgin Islands in 2000 and which it took Mossack Fonseca a decade to grow concerned about, Le Monde reported.

In 2011, the law firm cut ties with Makhlouf, just after the outbreak of the revolt calling for Assad's ouster.

The documents, from around 214,000 offshore entities, came from Mossack Fonseca, a Panama-based law firm with offices in more than 35 countries.

Israel is mentioned in the documents around 60,000 times, investigative journalist Uri Blau told i24news.

Blau, a Haaretz reporter, is one of the journalists who has been working on the papers with international partners over the last several months.

"More than 600 Israeli companies are involved in the leak," Blau said. "So far we haven't come up with government officials, although individuals who are in some way related to official positions in Israel do appear in the papers, for example Dov Weisglass, Ariel Sharon's office manager."

Blau added that he expected revelations to come out of the diamond and banking industries, with Bank Leumi apparently featuring prominently.

Also on Monday, both the Spanish and French prosecutors announced a probe into the allegations.

Panama's government vowed Sunday to "vigorously cooperate" with any legal probe that might be launched in the wake of the "Panama Papers" data leak.

"The Panamanian government will vigorously cooperate with any request or assistance necessary in the event of any legal action occurring," it said in a statement.

Though most of the alleged dealings are said by the ICIJ to be legal, they are likely to have a serious political impact on many of those named.

ICIJ director Gerard Ryle said the documents covered the day-to-day business at Mossack Fonseca over the past 40 years.

"I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents," he said.

 ( Kenzo Tribouillard (AFP/File) )

Among the main claims of the ICIJ investigations:

-- Close associates of Putin, who is not himself named in the documents, "secretly shuffled as much as $2 billion through banks and shadow companies," the ICIJ said.

-- The files identified offshore companies linked to the family of Chinese President Xi Jinping, who has led a tough anti-corruption campaign in his country, the ICIJ said.

-- In Iceland, the files show Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned millions of dollars of investment in his country's banks during the financial crisis through an offshore company.

-- The law firm of a member of FIFA's ethics committee, Juan Pedro Damiani, had business ties with three men indicted in corruption scandal: former FIFA vice president Eugenio Figueredo, as well as Hugo Jinkis and his son Mariano, who were accused of paying bribes to win soccer broadcast rights in Latin America.

-- Argentine football great Messi and his father owned a Panama company, Mega Star Enterprises Inc., a shell company that had previously not come up in Spanish investigations into the father and son's tax affairs.

'Inside the offshore world'

Also in the world of football, Francetv Info named UEFA president Michel Platini as the beneficiary of a Panama-based tax company, adding however that no illegal activity was alleged.

Barcelona football star Lionel Messi (R) and his brother Rodrigo leave the courhouse in the coastal town of Gava near Barcelona on September 27, 2013 after an audience on tax evasion charges ( Josep Lago (AFP/File) )

Platini's communications service said in a statement sent to AFP that "all of his accounts and assets are known to the tax authorities in Switzerland, where he has been a tax resident since 2007".

Iceland's Gunnlaugsson is expected to face a no-confidence vote this week over allegations he used a secret offshore firm called Wintris Inc. to hide millions of dollars in the British Virgin Islands.

Visibly irritated, the premier refused to answer reporters' questions during an interview broadcast on Swedish television Sunday evening.

"I have never hidden assets," Gunnlaugsson told a journalist from the Swedish SVT channel before leaving the room. His spokesman insisted he and his wife have scrupulously followed the law.

At least 33 people and companies listed in the documents were blacklisted by the US government for wrongdoing, such as North Korea and Iran, as well as Lebanon's Islamist group Hezbollah, the ICIJ said.

The leaked data, covering 1975 to the end of last year, provides what the ICIJ described as a "never-before-seen view inside the offshore world".

The massive leak of documents recalls Wikileaks' exploits of 2010 -- which included the release of 500,000 secret military files on the wars in Afghanistan and Iraq and 250,000 diplomatic cables, and infuriated the US.

'Biggest leak in history'

However, in terms of size, "the 'Panama Papers' is likely the biggest leak of inside information in history," according to ICIJ.

View of a sign outside the building where Panama-based Mossack Fonseca law firm offices are housed in Panama City on April 3, 2016 ( Rodrigo Arangua (AFP) )

"It is equally likely to be one of the most explosive in the nature of its revelations," the group added.

Names also figuring in the leak included the president of Ukraine, the king of Saudi Arabia and the prime minister of Pakistan, the ICIJ statement said.

The documents show that "banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption," the ICIJ said on its website.

"The files show that these fixers and middlemen protect themselves and their clients by concealing suspect transactions. In some instances, they work to head off official investigations by backdating and destroying documents," it added.

"These findings show how deeply ingrained harmful practices and criminality are in the offshore world," said Gabriel Zucman, an economist at the US-based University of California, Berkeley, cited by the consortium.

The leaked documents were reviewed by a team of more than 370 reporters from over 70 countries, according to the ICIJ.

The BBC cited Mossack Fonseca as saying it had operated "beyond reproach" for 40 years and had never been charged with any criminal wrongdoing.

It was not immediately clear who was the original source of the leaked documents.

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