Date: April 13, 2016
The sensational disclosures in the Panama Papers reveal that nations, organizations and individuals routinely scoff at the prohibitions intended by the economic sanctions imposed by the United States through the use of Panama law firms and other secrecy havens to mask their sanctions violations and evasions.
The Panama Papers emerged in a leak of 11 million electronic documents from the Panamanian law firm, Mossack Fonseca. They provide a treasure trove of fodder for investigative journalists worldwide who will be reporting their findings for months to come. The Panama Papers also provide a wealth of embarrassing details for many national governments whose officials and their close associates are shown by the Papers to keep unexplained wealth hidden with the help of the well-paid Mossack Fonseca firm that has been plying its secretive trade for 39 years.
If the papers thus far revealed are an indication of the amount of hidden treasure that is stashed away in offshore secrecy havens, the amounts involved would easily reach multiple trillions of dollars.
Panama is a leading member of the 65 or so secrecy havens around the globe, ranging from the godfather of such jurisdictions, Switzerland, to small islands in the Caribbean and the Pacific, such as Tortola and Nauru, respectively. Other well-known havens include the Cayman Islands, Liechtenstein, Malta and Gibraltar. For more than 40 years, the secrecy havens have resisted world pressure to become more transparent. Instead, they have opted to continue with the very lucrative business that Mossack Fonseca’s leaked files have now revealed.
Sanctions are midway point between diplomacy and war
Sanctions are midway point between diplomacy and war and meant to punish nations, organizations for conduct the US and other sanctioning nations and the international bodies deem unacceptable.
The violations of U.S. sanctions intentionally or unintentionally facilitated by Mossack Fonseca, according to reports by the BBC and other media, are the most ominous revelations of the Panama Papers because they attack the national security of the United States. Economic sanctions have been called the midway point between diplomacy and war and meant to punish nations, organizations and individuals for conduct and policies the United States, and other sanctioning nations and international bodies, find intolerable.
US and other nations may need to invent new weapons to replace now-compromised sanctions
The Panama Papers’ revelations that United States sanctions programs, and those of others, are routinely nullified by 65 or so secrecy havens worldwide will likely prompt the US and other countries to rethink the weapons they use to punish nations, organizations and persons for intolerable conduct and policies.
The Panama Papers and Mossack Fonseca revelations show that secrecy havens easily convert economic sanctions into paper tigers.