World Economy

G-20 nations slammed for being 'too slow' in tackling tax havens following the Panama Papers

Shafi Musaddique
Key Points
  • Two years on from Panama Papers leak, international watchdog warns G-20 countries that they are 'weak' in fighting tax havens
  • U.S., Australia and China only nations to have improved laws that strengthen transparency
  • Canada and South Korea lag behind all other G-20 countries
A police officer stands guard outside the Mossack Fonseca law firm office in Panama City April 12, 2016
Carlos Jasso | Reuters

G-20 countries are "weak" and have moved "too slowly" in improving transparency over financial secrecy two years after the Panama Papers revealed how wealthy individuals hide their money, an international corruption watchdog said Thursday.

Transparency International warned that 10 G-20 nations have "very weak" legal frameworks that do little to help law enforcement officials and citizens find out who really owns companies within their borders.

It said that France, Germany, Italy and Brazil have "significant" room for improvement.

The U.K. remains the only G-20 country to have a central register detailing beneficial owners available to the public. A beneficial owner ultimately has significant control of, or owns, a corporate entity.

The U.S., Australia and China are the only nations in the group to have improved from "weak" to "average" legal frameworks combating financial corruption.

Canada and South Korea lag far behind all other G-20 countries.

"The glacial pace of progress by the federal, provincial and territorial governments is an invitation to the corrupt, tax evaders and money launderers to continue 'snow-washing' their dirty money in Canada." warned Transparency International Executive Director Alesia Nahirny. "Meanwhile, Canada's reputation deteriorates further with only words to show and no concrete accomplishments."

The Panama Papers saw the unprecedented leak of 11.5 million documents from offshore law firm Mossak Fonseca in April 2016. The leak raised questions over tax avoidance from prominent individuals such as the late father of former U.K. Prime Minister David Cameron, to secret offshore deals worth $2 billion with links to Vladimir Putin.

Mossack Fonseca operated tax havens in Switzerland, Cyprus and, most notably, in the Caribbean. The British Virgin Islands held over 100,000 offshore companies alone.