A London lawyer has said there is nothing illegal nor illegitimate in his involvement with the Panamanian law firm Mossack Fonseca, after his name appeared in the 200,000-plus entitles revealed in the largest information leak in history.
Jed Chinneck of London’s Chinneck Law says he was 100 per cent compliant with Canada Revenue Agency requirements when purchasing a condominium in Panama.
However, the law firm that Chinneck and a physician friend from Sault Ste. Marie went through, Mossack Fonseca, is at the centre of the “Panama Papers” leak.
In an email response to AM980, Chinneck writes that he and a friend were looking to purchase property in Panama for personal and family use.
Their real estate agent referred them to the law firm, which suggested incorporating a company to purchase a condo.
As a result, “Brookstone Properties” was formed and owned equally by the pair. A condo was purchased and later sold.
Chinneck writes “it is perfectly legal (and often advisable) to use corporations in foreign countries to acquire and hold property” and that “Brookstone was a legitimate use of an offshore company. There has been no breach of law or improper act.”
The International Consortium of Investigative Journalists (the group that investigated and made the massive leak public) also advises that publishing the data doesn’t imply that all of the persons and companies mentioned broke the law, since there are legitimate uses for offshore companies.
Assistant Professor of Managerial Accounting and Control at Ivey Business School, Dr. Mitch Stein told AM980 that property must generally only be declared if it is generating income.
“Do you have property outside of the country that might result in income having to be reported on your Canadian tax return? So it’s not every type of property that you might have outside the country, but they are trying to identify those situations where people have property outside the country which is going to result in income that has to be reported on their Canadian tax return,” he said.
Stein saidthere are a number of reasons why someone may want to hold assets in foreign countries instead of in Canada including keeping money from family, saving on taxes on investment income, or simply using money managers in other countries who are good at not losing money.
In this situation, despite doing everything by the book, you still may be named in a leak such as the Panama Papers.
“You could get easily caught if you want to have a particular vacation home or a boat or whatever it might be in that country and that country comes up on these lists, so there can be very legitimate reasons for doing that,” he said.
The list of entities has been made available and is searchable through the International Consortium of Investigative Journalists’ website.
Mossack Fonseca says it was hacked, which resulted in 2.6 terabytes of information being leaked.
World leaders such as Russian President Vladimir Putin and British Prime Minister David Cameron have been named in the leak, which has been linked to the wealthy hiding money in offshore tax havens.
The leak has also forced Iceland’s Sigmundur Gunnlaugsson to step down as prime minister.
Listen to the full interview with Dr. Mitch Stein Wednesday afternoon on The Andrew Lawton Show at 1:00 p.m.