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| Slovak tax authorities to check on Panama connection |
| Bratislava, 25.04.2016 |
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| Slovakia-based company Latem Trading was involved in hiding money from tax authorities. They used their account in Privatbanka, owned by Penta, in the process. Tax authorities are looking to audit the company.
Latem Trading, a company based in Slovakia, was part of a sophisticated worldwide system for hiding and laundering money. This stems from information from the Panama Papers that was leaked last year from the Mossack Fonseca law firm.
The case of the 50-year-old Spanish lawyer Cristina Simón Amian illustrates how Latem Trading helped hide money and transfer it untaxed from foreign accounts through Slovak bank Privatbanka, owned by the Penta investment group. Sme unveiled her story in cooperation with the Czech Centre for Investigative Journalism.
Latem Trading hasn’t been a profitable company in the long run, based on its official published books. Despite that Privatbanka did not find the hundred-thousand-euro transactions on its account suspicious and therefore did not report them to the financial police.
The Sme daily’s information suggests that Latem Trading is now facing a tax audit, right after the financial administration gets hold of documents from Panama Papers from the German authorities who received them from local journalists.
Berlin Agreement a cause for concern
For bankers from all around the world, Wednesday October 29, 2014 was not an ordinary day. On that day, 51 countries signed an agreement in Berlin on automatic exchange of information about bank account owners.
The agreement meant an end to banking secrecy, because it introduced a new online system for tax authorities to find out how much anyone keeps in foreign banks.
Switzerland, a defender of banking secrecy until then, signed the agreement less than one month later as well.
At that time, Spanish citizen Cristina Simón Amian had USD500,000 that she inherited from her father, deposited in her account in a Swiss bank. She had not paid inheritance tax on the money in her homeland, and now was in danger of losing it. She was worried that Spanish tax authorities might find the money and confiscate part of it.
This is clear from the correspondence and the documents that point to the attempt to legalise the money.
In early summer 2015 Cristina Simón Amian turned to Mossack Fonseca.
“Since our client did not declare the account to the Spanish tax authority,” lawyer Gerardo Nunez of Mossack Fonseca wrote in his email to Michael van Beest, a partner with the Infintax financial services company in Holland. “The Swiss bank wants to terminate the account before the end of the year, and will only transfer the money to another bank located in a country that is a signatory to the Berlin Agreement.”
The Swiss were pushing for closing the account too, as the bank was facing sanctions if it still had clients with untaxed money on their account after January 1, 2016.
Gerardo, you are on fire
Cristina Simón Amian was interested in using Mossack Fonseca’s escrow services (where a third party holds funds on behalf of other transacting parties), but there was a problem – Mossack Fonseco’s escrow accounts were in Panama and the Bahamas, and neither country had signed the Berlin Agreement. So could Infintax help out by providing one of its European accounts, allowing the Swiss money to be safely stored there, and then forwarded to Cristina Simón Amian as soon as she opened her own bank account?
According to Nunez’s proposal, Infintax should have accepted half a million dollars from Simón Amian from Switzerland and later transfer it to Panama to the account of the company that would be established especially for the client.
“Dear Gerardo, you are on fire,” responded van Beest from Infintax. “Yes, we still have a bank account in Bratislava that we can use for this, no problem.”
As established by later correspondence, the “bank account” referred to was with the Slovak bank Privatbanka, founded by Penta Group, and the escrow agent for Cristina Simón Amian was designated as Latem Trading s.r.o. based in Bratislava. Latem Trading was officially supposed to have the money only deposited on its account and wouldn’t have to report it in its books, which would prevent them from attracting the attention of tax authorities. Subsequently, they would transfer the money on the account of the Panama-based company that would be established for Simón Amian.
As it turns out, the transaction may never have taken place.
“I have received an answer from the Swiss bank, that they will not accept a transfer (of the money) to Latem,” Simón Amian wrote on July 20, 2015, to the lawyers in Panama. It is not clear from the available correspondence and documents why the Swiss have not authorised the transfer.
It was probably due to the fact that the account in Privatbanka did not belong directly to Simón Amian but rather to Latem Trading. The Swiss bank had earlier specified the condition that the money would only be transferred to an account belonging to Simón Amian.
In the end Simón Amian laundered the money in another way, with the help of Mossack Fonseca. She received an official residence permit in Panama, established a company Sandoline Commerce Inc. there and had the inherited untaxed money transferred to its account. The actual transfer is not clear from the available documents and correspondence. But the case of Simón Amian was highlighted by a Mossack Fonseca manager as an example of good international cooperation within the company.
Cristina Simon did not reply to emailed questions, and when contacted at her law office, claimed not to speak English. She did not react to the voicemail that the Sme daily left on her phone in Spanish.
Privatbanka’s role?
Latem Trading surfaced in connection with the Panama Papers also two weeks ago. According to the Czech Centre for Investigative Journalism, the company was part of a close network of companies through which Mossack Fonseca systematically laundered or hid money for its clients from all around the world. The service is officially known as escrow service.
“These services were mainly meant to clear the traces after money transfers,” the centre’s director Pavla Holcová explained. To do that, Latem Trading used fictitious business transactions.
“Money was laundered through escrow and it was not in one’s forces to find what a fictitious and what a real money transfer was,” Holcová said.
Proposing an international scheme of money transfers, best through several states, and the preparation of fake invoices and contracts was part of escrow services.
“The befriended banks were important too, they did not pay much attention to checking on Mossack Fonseca’s clients,” Holcová said.
Tom Nicholson , Adam Valček
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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