Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Update on Panama Papers: searchable data base, no more bearer stocks, reasons to park money offshore

leave a comment »

Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Panama will be shutting down the bearer share concept for documenting ownership of a company. ICIJ plans to release a huge database on shell companies. Also some reasons I would have an offshore company or maybe five if I was a billionaire or high official in a corrupt country.

If I was super rich, I’d park some money offshore

4/19 – Daily Beast – Obama in Saudi Arabia: What Do These Oil Sheiks Have to Hide? – Short answer: their contingency escape plans.

Article wonders why the rulers in an absolute monarchy would want to park money in anonymous offshore accounts. Article suggests there isn’t any need to do so since absolute rulers not only own the country but decide by themselves what is legal and illegal.

The reason can be found by looking around after the Arab Spring. It seems like in just a flash the governments of Tunisia, Libya, and Egypt collapsed. Even the current prime minister of Pakistan was ousted (he has since regained power) and had to flee for his life.

The longer answer for hiding money in offshore accounts is it that when things can change overnight, you need to have someplace to run and some money to work with. An escape plan.

And then there are the super rich people who made their money legitimately.

If I were either a tech billionaire in a very stable county or senior official in a sorta’ unstable country, I’d have two or fifty million bucks stashed away somewhere. Maybe several somewheres. Each set up by a different law firm. Each using different banks.

I’d also have two or five safe houses. Condos actually. Each owned by a different offshore company. Each stocked with a brick or two of $20 bills in the wall.

Searchable database available soon

4/26 – ICIJ – Coming Soon: ICIJ to Release Panama Papers Offshore Companies Data – On May 9 ICIJ will release a database of offshore companies. It will be searchable. It will contain information on 200,000 offshore companies.

This will not be a data dump. It will contain specific, screened company information. It will not contain private information, bank accounts, phone numbers, or passports.

The database will be published at: https://offshoreleaks.icij.org 

Bearer stocks are a thing

I previously discussed Oh, the things you can learn from the Panama Papers. Did you know that documenting ownership of a shell company through bearer stocks is even a real thing?

There is really such as thing as bearer stocks, which give ownership of a company to whoever has custody of the stock certificates.

The president of Panama has announced he will try to get their national law changed so that such form of ownership will stop.

4/19 – Bloomberg – Panama Vows to End Use of Bearer Shares to Improve Transparency – Article offers no details of how, when, or the transition plans.

For context, the Wall Street Journal says the Mossack Fonseca firm had around 6,000 clients with bearer stock ownership in 2005 and has 170 now. That would be a drop of 97%. Looks like that business form is going away on its own.

Thanks to Francine McKenna, @retheauditors, for pointing me to the article.

Written by Jim Ulvog

April 27, 2016, 7:57 am at 7:57 am

Posted in Audits, Fraud, Other stuff, Pondering

Tagged with

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: