Panama has ignored the majority of requests for information sent by Malta’s anti-money laundering agency (FIAU) for 10 years, highlighting the difficulty of penetrating the country’s strict secrecy laws.

Energy and Health Minister Konrad Mizzi is undergoing a tax audit by both Inland Revenue and an independent audit firm following revelations that he set up a trust in New Zealand and a company in Panama.

The Prime Minister’s chief of staff, Keith Schembri, who established an identical structure to that of Dr Mizzi, said that he will also be submitting himself to an audit.

The registration documents of the Panama company Dr Mizzi provided show no proof of his ownership or any holdings, highlighting how difficult it is for any audit to produce new information.

The difficulty in penetrating the secretive jurisdiction is further highlighted by Malta’s own anti-money laundering agency, which has received hardly any cooperation from the Panamanian authorities over the past years in its anti-money laundering investigations.

The FIAU publishes an annual report in which it lists the requests for cooperation and assistance with foreign jurisdictions inits investigations.

Panama replied to five of 13 requests for information

An analysis of the 10 reports published by the agency from 2004 to 2014 shows that the majority of requests sent to the Panamanian anti-money-laundering authorities were ignored.

Only five of the 13 requests received any response from the Panamanian authorities.

Where there is an indication that we did not receive any response, it means that no information was received by the end of that specific year

An FIAU official confirmed that, even when a response was received, it may merely indicate that the information sought by the anti-money laundering agency could not be obtained by the authorities of foreign jurisdictions due to legal restrictions.

“You may also wish to note that, where there is an indication that we did not receive any response, it means that no information was received by the end of that specific year. It is possible that information may have been received the following years.

“Certain agencies do tend to take a very long time to provide a response,” the official said.

Panama is one of the few jurisdictions that still allows the registration of companies holding bearer shares, which are outlawed in the EU. Only a few jurisdictions in the world still allow them.

These shares make it impossible to really know what and who is behind a company, whether it has such shares and what assets are being traded.

Questioned by the press last week about the difficulty in penetrating a jurisdiction with such strict secrecy laws, Dr Muscat said if permission is given “you can infiltrate anywhere”.

The minister has backed down markedly over the past few weeks about his decision to open up a company in Panama.

In an interview with The Sunday Times of Malta on February 28, Dr Mizzi said that he had no regrets over his acquisition of the Panamanian company.

A few days later he announced he would be closing the company after listening to “feedback”.

Dr Muscat has since described as “naïve and politically insensitive” the advice given to Dr Mizzi and Keith Schembri to set up such an opaque financial structure.

This is reflected in information from the anti-money laundering agency, which has sent out bulletins to financial intermediaries listing Panama as a “high-risk and non-cooperative jurisdiction”.

jacob.borg@timesofmalta.com