Panama Papers list Myanmar names
- By Laignee Barron | Tuesday, 17 May 2016
The
world’s largest data leak – the Panama Papers – has revealed a
secretive network of offshore jurisdictions used by some of the most
wealthy to stash assets, subvert sanctions, launder money and evade
taxes. An extensive database detailing companies and businesspeople
involved in the leak holds 16 names from Myanmar, including CB Bank
chair U Khin Maung Aye and former dictator U Ne Win’s son-in-law U Aye
Zaw Win.
Graphic: Tin Zaw Htway. Click image to expand
The
searchable database
made public by the International Consortium of Investigative
Journalists (ICIJ) includes names of more than 360,000 individuals and
companies behind confidential offshore entities. Spanning nearly 40
years, from 1977 to 2015, the information is a tiny fraction of the
leaked data, but already links to more than 200 countries and several
world leaders.
The ICIJ is careful to note that those included on
the database have not necessarily broken any laws. Anonymous companies
in some cases have legitimate business purposes, for instance to conduct
cross-border asset transfers, or make an investment without tipping off
a competitor.
However the leak raises suspicions over the need for secrecy and the potential for misuse cloaked by anonymity.
“Extensive
reporting by ICIJ and its media partners for more than four years has
shown that the anonymity granted by the offshore economy facilitates
money laundering, tax evasion, fraud and other crimes,” the ICIJ says.
“Even when it’s legal, transparency advocates argue that the use of an
alternative, parallel economy undermines democracy because it benefits a
few at the expense of the majority.”
More than half of all
companies registered by Panama-based law firm Mossack Fonseca, and
nearly all of those that link back to Myanmar, are licensed in the
British Virgin Islands. The leaked data reveals the firm went to great
lengths to ensure the finances of its elite clientele stayed hidden, for
a fee.
Celebrities, politicians and their associates – including
friends of Vladimir Putin, relatives of China’s Xi Jinping, individuals
linked to Malaysian Premier Najib Razak and the children of former
president of the Philippines Ferdinand Marcos – have embraced such
covert financial management.
While the leak does not include the
financial transactions completed via the shell companies, it does
divulge the names and addresses of the previously anonymous owners.
The
Myanmar portion of the Offshore Leaks Database reads like a laundry
list of tycoon industries, including shipping, titanium, timber, petrol,
drilling and auto imports.
U Khin Maung Aye, chair of
Cooperative Bank Ltd, is listed on the database as a shareholder and
owner of British Virgin Islands-based “Yangon Riverside New City
Development Co Ltd”, an officially registered construction company. The
offshore entity was created in 2012, and became inactive after
defaulting in November last year.
A group of companies related to U Khin Maung Aye, who was adviser to former president U Thein Sein, had
five projects approved
just before the government changed hands at the end of March. These
included the construction of a 440-acre industrial park in Yangon by New
City Development Public Company, a CB Bank venture.
The managing director of U Khin Maung Aye’s KMA group and CB Bank officials declined to comment on the offshore company.
Oil magnate
U Michael Moe Myint
– once referred to in a US diplomatic cable as “perhaps the most
legitimate” of Myanmar’s businessmen after having repeatedly refused
pressure to “become a crony” – is connected to six companies listed on
the Offshore Leaks database. U Michael Moe Myint’s wife and other
relatives were also included on the database and connected with British
Virgin Islands-registered MPRL E&P and Myint & Associates.
According to the US cables, the oil magnate’s companies have been
audited several times, with the conclusion that he often overpays his
taxes.
Officials at U Michael Moe Myint’s company Myint&Associates hung up on
The Myanmar Times when asked about the British Virgin Islands-licensed companies.
The
database also includes information from another 2013 expose, with
documents from the Singaporean-headquartered Portcullis TrustNet which
came under fire for allegations of data breaches and assisting the
relatives of region dictators to evade taxes. TrustNet, which
self-styled as the largest independent operator in Asia, established two
British Virgin Islands firms for U Ne Win’s son-in-law U Aye Zaw Win in
the 1990s, including one called Sky-Link Communications LTD, according
to the ICIJ.
Other names on the database include U Myint Swe, U
Kyaw Win, U Htay Myint, Daw Mya Thida Swe Win and Joern Kristensen, a
former Myanmar representative for the Australian company Institute for
International Development.
According to the database, IID Co Ltd
was incorporated in the British Virgin Islands in 2012, with Mr
Kristensen listed as both shareholder and beneficiary until the account
became inactive in 2015. Mr Kristensen says the account was used for
legal, above-board purposes to try to enable payments to a Singaporean
bank account while Myanmar was still subject to sanctions.
“At
that time, most embargoes and sanctions on Myanmar were still in place,
and bank transfer into the country was extremely challenging, most
companies and NGOs brought in their funds in cash, while outbound
transfer was, and remain[s], impossible,” Mr Kristensen said, adding
that he was surprised to find his name listed among the Panama Papers
leak.
“I, and I would think that is the case for several of the
other people whose names are found in the Panama Papers, have done
nothing wrong,” he added.
According
to Edwin Vanderbruggen, a legal partner at law firm VDB Loi, many of
the offshore entities are a holdover from an era when it was nearly
impossible to move foreign currency in or out of the country.
“I
think a lot of importers and exporters needed companies and bank
accounts overseas for practical reasons. Whether any laws were broken
remains to be seen, but in itself this is certainly not an ominous
purpose,” he said. “Of course, it is almost certain that offshore
centres have also been used for a variety of other uses in connection
with Myanmar which would raise much more concern.”
According to a
Central Bank official, overseas finances are managed through the 2012
Foreign Exchange Management Law. Myanmar nationals can open bank
accounts abroad with the approval of the Central Bank. Under the law,
residents and companies must report to the Central Bank all transactions
involving their overseas accounts. The law was passed in 2012, but the
Central Bank has told
The Myanmar Times that, as of earlier this year, it has not received any reports from residents.
By
watchdog group Tax Justice Network’s estimate, a large share of the
world’s wealth is parked in tax havens. In 2012, the group suggested
that between US$21 trillion and $32 trillion of financial assets were
“sitting offshore, largely untaxed”.
The problem is particularly acute in Myanmar where
illicit cash flows dominate, slashing government tax revenue and fuelling an underground economy.
Last
year US-based Global Financial Integrity reported that nearly $100
billion in dirty money flowed through Myanmar from 1960 to 2013. Almost
$19 billion left Myanmar over that period, draining funds from the
official economy. Nearly $80 billion in illicit funds entered the
country, indicating smuggling profits make up a significant portion of
the economy. Nearly half of those inflows occurred during the last four
years of the study.
GFI said correcting illicit financial flows needs to be a government priority.
The
Central Bank is hoping the new government will support enforcing and
enhancing laws which require all residents with overseas bank accounts
to submit regular reports to the monetary authority, which would allow
it to collect better data on capital flows, offshore holdings and
Myanmar investment overseas.
“Whether or not the Panama Papers
leak is valid, there are probably such kinds of businesspeople who want
to evade taxes,” said government spokesperson U Zaw Htay. “We will focus
on improving the rule of law when dealing with tax issues. Tax evasion
is against our rules and laws and we will try to restrict such
activity.”
U Zaw Htay declined to comment on specific names on
the database, including accusations made on social media that the U
Myint Swe on the list refers to the
vice president.
To search the database, click here.
Ref;http://www.mmtimes.com/index.php/national-news/20325-panama-papers-list-myanmar-names.html
Tax haven secrecy revealed
Offshore Leaks Database
