By K. Quincy Parker Nassau Guardian Business Editor From Caribbean News Now

NASSAU, Bahamas — The fallout from the so-called “Panama Papers” leak continued on Tuesday. The latest casualty with a connection to The Bahamas was the president of the Chilean branch of Transparency International, who resigned on Monday after documents showed he was linked to at least five offshore companies domiciled in The Bahamas.

news2.jpg Gonzalo Delaveau was among tens of thousands of people named in a leak of four decades’ worth of documents from Mossack Fonseca — a Panamanian law firm specializing in offshore financial services, with a branch in The Bahamas — and while Delaveau is not accused of illegal activity, the leaks called into question his post at Transparency International, a German-based organization that seeks to monitor and root out corporate and political corruption worldwide.

Delaveau, a lawyer, acts as a representative for Turnbrook Corporation, DK Corporation, Heatlhey International Inc., Turnbrook Mining Ltd. and Vizcachitas Ltd, all of which are domiciled in The Bahamas. He also reportedly serves as a director for Turnbrook Mining, which owns 51.6 percent of Los Andes Copper, a Canadian exploration and development company currently focused on a mine project north of Chile’s capital, Santiago.

Delaveau could not be reached for comment.

Meanwhile, shadow finance minister and Free National Movement deputy leader Peter Turnquest said the leak and the damage it may do to The Bahamas’ reputation “points out the very serious and damaging potential consequences” of the reading of private emails in Parliament.

Turnquest told Guardian Business the idea that government ministers were “in possession of private banking details of citizens and international clients of professional firms” — as claimed in the House of Assembly recently — is “even more worrisome and potentially damaging”.

So much so, in fact, that Turnquest said it must now be clear to minister of financial services Hope Strachan why she was urged to “to counsel her fellow ministerial colleagues on their loose talk and actions concerning this sensitive industry”.

So far, The Bahamas has featured in the story on the international arena prominently: In addition to Delaveau, there is the revelation that UK Prime Minister David Cameron’s father used companies in The Bahamas years ago allegedly to avoid taxation in the UK. However, it appears that the main exposure of The Bahamas is that nearly 16,000 Mossack Fonseca companies were incorporated there. When the complete trove of information is made public in May, the extent of the leak will be made clear.

Turnquest also addressed the vulnerability of The Bahamas as an offshore financial centre. Citing the Organization for Economic Cooperation and Development (OECD) blacklisting in 2001 — which he dubbed “a traumatic experience” — Turnquest said the then FNM government “responded positively with a suite of legislation designed to counter perceived compliance weaknesses in the jurisdiction”.

“In the face of tremendous criticism from the then opposition PLP, those bold — and yes, intrusive — initiatives effectively saved the industry. The PLP promised to roll back those acts but of course that never happened,” he said.

Turnquest said continued compliance pressures and shifting goal posts from developed states has resulted in further tightening of internal regulations and scrutiny of financial accounts and transactions, culminating in the US Foreign Account Tax Compliance Act (FATCA) legislation passed last year. All of these attacks on the country’s second economic pillar, he said, have weakened the industry and made it vulnerable.

“As a jurisdiction, it is my belief that The Bahamas remains a well run and compliant jurisdiction. These leaks, however, point out how very important it is for all intermediaries to be vetted to ensure that the same strict standards practiced within the jurisdiction are maintained by those introducing business to The Bahamas.

“While this report does not point out any wrongdoing by local financial institutions, it points out the vulnerability of the jurisdiction to be used unwittingly as safe harbour for illegally gained proceeds. It should also heighten our vigilance for the consistent application of international best practices necessary to ensure compliance standards and data security is maintained at all levels,” Turnquest said.

For more on this story go to: http://www.caribbeannewsnow.com/topstory-Transparency-International-branch-president-linked-to-Bahamas-companies-29925.html

IMAGE: www.miscw.com

Related story:

David Cameron’s father sought legal advice on best tax havens

By Holly Watt, Juliette Garside and David Pegg from The Guardian UK

David Cameron’s father took detailed legal advice about the pros and cons of different tax havens before the fund he had helped set up was transferred to Ireland, the Guardian can reveal.

A leading international law firm wrote an analysis of the Cayman Islands and Bermuda as possible places to host Blairmore Holdings Inc, as it considered whether to “migrate” the investment fund from Panama.

Blairmore was moved in June 2012 to Ireland – another tax haven with many of the advantages of offshore jurisdictions.

The Panama Papers highlight how Blairmore’s directors wanted to continue to avoid paying UK taxes at a time when David Cameron was already the leader of the Conservative party.

And the move to Ireland came in the same month as Cameron, by then prime minister, was railing against tax avoidance schemes, describing them as morally unacceptable.

“Some of these schemes we have seen are quite frankly morally wrong,” he said.

Awkward questions

This latest disclosure will add to the awkward questions facing Downing Street from the Panama Papers leak.

While Cameron has insisted he will not benefit from any offshore funds in the future, he has not said whether he benefited in the past.

Fund run by David Cameron’s father avoided paying tax in Britain

Panama Papers reveal Ian Cameron hired Bahamas residents, including a part-time bishop, to keep offshore company exempt

Papers seen by the Guardian show the directors of Blairmore sought advice from the London solicitors Simmons & Simmons in March 2008.

They were seeking guidance on the advantages and disadvantages of moving Blairmore, which was set up in 1982 with the help of Cameron’s father, Ian. The fund was registered in Panama by Mossack Fonseca, the firm at the centre of the Panama Papers leak.

The legal advice was written for Cameron Sr and other directors, who appear to have been “jurisdiction shopping” for the best place to secure the fund in the future.

At the time, Panama was coming under pressure from the Organisation for Economic Co-operation and Development over the secretive nature of its regime.

The five-page analysis was written by a lawyer who set out the benefits of different Caribbean islands, noting that in one, the “level of actual regulation is very light”.

“Both the Cayman Islands and Bermuda are considered market-leading offshore financial centres with sophisticated investment fund infrastructures,” noted a lawyer at Simmons & Simmons.

“Both offer political stability, an abundance of professional service providers and responsive regulatory bodies.”

The document explains how much it would cost Blairmore to transfer to Bermuda or the Caymans.

Simmons & Simmons said it would charge £40,000-£50,000 for a transfer to either jurisdiction. It recommended additional support from another law firm.

To move registration to Bermuda would cost Blairmore an additional $6,000 for work carried out in the Caribbean, and £15,000-£17,000 in London.

The Cayman move would cost $7,300 on the island and £15,000-£17,000 in London.

Mossack Fonseca would charge $4,500 for either move.

Simmons also noted that: “In general, regulatory intervention in Bermuda is considered slightly heavier than in some other offshore jurisdictions.”

The memo also highlights the advantages of operating in the Cayman Islands.

It explains: “The Cayman Islands is by far the jurisdiction of choice for hedge funds and hedge-fund managers. By June 2007, over 8,300 registered mutual funds were operating in the Cayman Islands.”

Ian Cameron died in September 2010. In June 2012, the fund was shifted to Ireland, where it is subject to EU regulations – which would have made it much easier to market to European investors.

An email in the Panama Papers between Mossack Fonseca employees discusses the transfer to the different jurisdiction.

It says: “While most of the holdings and cash will transfer out to the new Irish fund, we will leave some funds behind – this will be less than 0.5% of the fund’s total assets. There will be some cash left to pay invoices and also a few companies which have not yet been sold and are not eligible [for regulatory reasons] in the new Irish fund.”

Blairmore Holdings, named after the Cameron family’s ancestral home in Aberdeenshire, has managed tens of millions of pounds on behalf of wealthy families.

Clients have included Isidore Kerman, an adviser to Robert Maxwell who once owned the West End restaurants Scott’s and J Sheekey, and Leopold Joseph, a private bank used by the Rolling Stones.

The Guardian has confirmed that in 30 years Blairmore has never paid a penny of tax in the UK on its profits.

Cameron addressed the issue of tax avoidance head on in June 2012 after the Times revealed the aggressive tax avoiding arrangements of the comedian Jimmy Carr.

“I think some of these schemes – and I think particularly of the Jimmy Carr scheme – I have had time to read about and I just think this is completely wrong.

“People work hard, they pay their taxes, they save up to go to one of his shows. They buy the tickets. He is taking the money from those tickets and he, as far as I can see, is putting all of that into some very dodgy tax avoiding schemes.

“That is wrong. There is nothing wrong with people planning their tax affairs to invest in their pension and plan for their retirement – that sort of tax management is fine. But some of these schemes we have seen are quite frankly morally wrong.”

Carr later changed his tax arrangements.

Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopkins

IMAGES:

David Cameron and his father Ian Cameron. Composite: Reuters

A provate security guard stands outside the building where Panama-based Mossack Fonseca law firm is based, in Panama City. Photograph: Rodrigo Arangua/AFP/Getty Images

Jimmy Carr was criticised by David Cameron over his tax arrangements, which he later changed. Photograph: Ken McKay/ITV/Rex Shutterstock

For more on this story and video go to: http://www.theguardian.com/news/2016/apr/07/david-cameron-father-ian-sought-legal-advice-tax-havens-panama-papers