Pandora Papers Leak Reveals Reputational Issue US Needs To Tackle - Advocacy Group

The recent Pandora Papers leaks have revealed reputational issue for the United States and the US government needs to address them, Financial Transparency Coalition Executive Director Matti Kohonen told Sputnik

WASHINGTON (UrduPoint News / Sputnik - 05th October, 2021) , Ekaterina Chukaeva - The recent Pandora papers leaks have revealed reputational issue for the United States and the US government needs to address them, Financial Transparency Coalition Executive Director Matti Kohonen told Sputnik.

The Pandora Papers, compiled by the International Consortium of Investigative Journalists and released by several publications, showed that several US states such as South Dakota and Nevada passed laws that protected trust customers in the United States and overseas.

"This is a reputational issue and the United States needs to tackle it along with other global cooperation at the United Nations and the Financial Action Task Force (FATF) to close down other tax havens across the world," Kohonen said.

Now that the South Dakota practices have been revealed to be as secretive as other global tax havens, the United States appears to face serious money laundering risks in its "own back yard in the prairies," he said.

"In Washington, it looks inconsistent to have a new rising tax haven in your own mid-West while trying to end tax dodging by big multinational companies and engaging in anti-corruption legislation to tackle foreign corrupt practices using the US financial system in particular," Kohonen said.

Passing Federal legislation and engaging in international cooperation is needed to shut these tax havens down, he said.

"Pandora Papers clearly show that state level reporting of beneficial owners, and company regulation is open to abuse as you can attract secretive trusts to your territory without harming your own territory too much in lost revenue, while getting some high paid jobs (which is the typical tax haven operating model).

The effect is felt by other states and countries in lost revenue and increased corruption opportunities," Kohonen said.

Federal legislation should ensure that the owners of all companies, trusts and foundations are reported on this registry and that such a registry is also made public, he said.

"The Pandora Papers show that such regulation does deter, ironically away from the Bahamas, who is planning such a registry toward South Dakota, which does not have one yet," he said.

Kohonen noted that the US government is already working on such legislation dubbed the Corporate Transparency Act.

"The US Treasury is working on a database on corporate beneficial owners and would seek to implement existing laws requiring companies to report ownership to the federal government," he added.

The Pandora Papers revealed a network of offshore banking among the world's elite, including 35 incumbent and former global leaders and more than 330 officials worldwide being involved in tax haven practices to hide vast wealth and property. The investigation was based on more than 11.9 million leaked financial documents.

The Financial Transparency Coalition is a task force comprising non-governmental organizations and governments working to curtail illicit financial flows.