German arrest order for Panama Papers lawyers faces hurdle
PANAMA CITY (AP) — A German arrest order for two Panamanian lawyers whose firm was at the center of an international tax evasion scandal faces a substantial obstacle: Panama’s constitution prohibits the extradition of its citizens.
Juergen Mossack and Ramón Fonseca are sought by Cologne prosecutors on charges of being an accessory to tax evasion and forming a criminal organization.
“They have constitutional protection,” Alvin Weeden, a lawyer in Panama, said Wednesday. “Technically, there’s no possibility.”
Mossack and Fonseca already face prosecution in Panama and are prohibited from leaving the country while out on bond after spending two months in jail. That case stems from allegations they helped create a corporation to hide money used for bribes by the Brazilian construction company Odebrecht as well as fallout from the so-called Panama Papers scandal.
The Panama Papers include a collection of 11 million secret financial documents leaked in 2016 that illustrated how some of the world’s richest people hide their money. It brought scrutiny to a number of world leaders and was a hit to Panama’s reputation.
Interpol’s office in Panama did not immediately respond to a request for comment about whether it had received an alert from German authorities about the case in Germany against Mossack and Fonseca.
In a statement, Mossack and Fonseca said their firm had sold corporations to a German bank that later resold them to clients. They said they had nothing to do with subsequent transactions.
“If one these ultimate beneficiaries evaded taxes in their country or committed some other crime using a corporation created by us, that is totally out of our control and knowledge,” said the statement issued by their lawyer in Panama, Guillermina McDonald. “We follow all of the processes required by regulators of our industry in their moment.”
Mossack and Fonseca announced the closure of their offices in Panama and elsewhere in the world in March 2018.
In the statement Tuesday night, they said they were willing to continue collaborating with investigations in any part of the world. McDonald said she did not know if they would be willing to appear before German authorities. Mossack and Fonseca maintain the German case is part of continuing efforts by the European Union to discredit them.
In February, the European Union again included Panama on a list of countries that are tax havens.
“Behind all of this is the eagerness to pursue fiscal problems,” said Weeden.
Lawyer Guillermo Cochez, Panama’s former ambassador to the Organization of American States and a critic of the creation of offshore and foreign corporations, said, “I think many lawyers in Panama and other places, like Mossack and Fonseca, have been playing, walking a very thin line.”
“They say it’s not a crime, but I have a different impression,” Cochez said. “That (idea) that ‘I sold a corporation and didn’t participate in anything,’ that is a very difficult to believe story.”