From:  MF  &  Co.  -­‐  Marketing     Sent:  Tuesday,  March  22,  2016  7:13  PM   To:  Ryle,  Gerard   Subject:  FW:  Media  inquiry  from  ICIJ/Private  and  confidential       Dear  Mr.  Ryle:       Below  please  find  our  responses  to  your  inquiries:       We  have  received  and  reviewed  the  questions  you  sent  us  relating  to  the  business   of  Mossack  Fonseca  and  parties  alleged  to  have  conducted  business  with  the  firm.       We  cannot  provide  responses  to  questions  that  pertain  to  specific  matters,  as   doing  so  would  be  a  breach  of  our  policies  and  legal  obligation  to  maintain  client   confidentiality.  Although  we  cannot  provide  such  information  to  the  media,  we   have  always  contributed  information  to  the  pertinent  authorities  when  it  has  been   requested.  However,  we  can  confirm  that  the  parties  in  many  of  the   circumstances  you  cite  are  not  and  have  never  been  clients  of  Mossack  Fonseca.   We  encourage  you  to  verify  your  sources,  comprehend  the  essence  of  the  industry   dedicated  to  company  formation,  and  understand  how  this  business  has   functioned  historically  versus  the  changes  that  have  taken  place  recently  to   ensure  transparency  into  the  identity  of  ultimate  beneficial  owners  and  to   improve  safeguards  within  the  international  financial  system  in  which  Mossack   Fonseca  operates.       Nonetheless,  we  respectfully  take  this  opportunity  to  provide  additional  insights   into  our  business  and  its  role,  and  to  briefly  comment  on  some  of  the  issues   brought  by  you  in  your  questionnaire.    Before  you  report  your  story,  please   consider  the  following  facts:       We  provide  company  incorporation  and  related  administrative  services  that  are   widely  available  and  commonly  used  worldwide.       Incorporating  companies  is  the  normal  activity  of  lawyers  and  agents  around  the   world.  Services  such  as  company  formations,  registered  agent,  and  others  are   frequently  used  and  provided  in  many  worldwide  jurisdictions,  including  the   United  States  and  the  United  Kingdom.       Moreover,  it  is  legal  and  common  for  companies  to  establish  commercial  entities   in  different  jurisdictions  for  a  variety  of  legitimate  reasons,  including  conducting   cross-­‐border  mergers  and  acquisitions,  bankruptcies,  estate  planning,  personal   safety,  and  restructurings  and  pooling  of  investment  capital  from  investors   residing  in  different  jurisdictions  who  want  a  neutral  legal  and  tax  regime  that   does  not  benefit  or  disadvantage  any  one  investor.       Our  services  are  regulated  on  multiple  levels,  often  by  overlapping  agencies,  and   we  have  a  strong  compliance  record.   Our  business  is  regulated  by  several  different  oversight  and  enforcement  agencies,   including  the  Banking  Superintendence  of  Panama  and  the  Intendancy  of  Non-­‐ financial  Regulated  Services  Providers.  We  are  also  subject  to  regulatory  oversight   and  enforcement  in  all  of  the  other  jurisdictions  where  we  incorporate  companies.   In  addition,  we  have  always  complied  with  international  protocols  such  as  the   Financial  Action  Task  Force  (FATF)  and,  more  recently,  the  U.S.  Foreign  Account   Tax  Compliance  Act  (FATCA)  to  assure  as  is  reasonably  possible,  that  the   companies  we  incorporate  are  not  being  used  for  tax  evasion,  money-­‐laundering,   terrorist  finance  or  other  illicit  purposes.       The  FATF,  in  particular,  praised  Panama  in  its  February  2016  plenary  session,   saying  specifically  that  Panama  has  made  “significant  progress  in  improving  its   AML/CFT  (anti-­‐money  laundering  and  combating  the  financing  of  terrorism)   regime.”  The  FATF,  subsequent  to  the  plenary  session,  removed  Panama  from  its   gray  list.       We  are  responsible  members  of  the  global  financial  and  business  community.       We  conduct  thorough  due  diligence  on  all  new  and  prospective  clients  that  often   exceeds  in  stringency  the  existing  rules  and  standards  to  which  we  and  others  are   bound.  Many  of  our  clients  come  through  established  and  reputable  law  firms  and   financial  institutions  across  the  world,  including  the  major  correspondent  banks,   which  are  also  bound  by  international  “know  your  client”  (KYC)  protocols  and  their   own  domestic  regulations  and  laws.       If  a  new  client/entity  is  not  willing  and/or  able  to  provide  to  us  the  appropriate   documentation  indicating  who  they  are,  and  (when  applicable)  from  where  their   funds  are  derived,  we  will  not  work  with  that  client/entity.  Indeed,  the  documents   you  cite  in  your  reporting  show  that  we  routinely  deny  services  to  individuals  who   are  compromised  or  who  fail  to  provide  information  we  need  in  order  to  comply   with  our  KYC  and  other  obligations.       Our  due  diligence  procedures  require  us  to  update  the  information  that  we  have   on  clients  and  to  periodically  verify  that  no  negative  results  exist  in  regards  to  the   companies  we  incorporate  and  the  individuals  behind  them.  Again,  the  documents   you  cite  in  your  reporting  show  that  we  routinely  resign  from  client  engagements   when  ongoing  due  diligence  and  updates  to  sanctions  lists  reveal  that  a  beneficial   owner  of  a  company  for  which  we  provide  services  is  compromised.       For  40  years  Mossack  Fonseca  has  operated  beyond  reproach  in  our  home   country  and  in  other  jurisdictions  where  we  have  operations.  Our  firm  has  never   been  accused  or  charged  in  connection  with  criminal  wrongdoing.       However,  we  are  legally  and  practically  limited  in  our  ability  to  regulate  the  use  of   companies  we  incorporate  or  to  which  we  provide  other  services.  We  are  not   involved  in  managing  our  clients’  companies.  Excluding  the  professional  fees  we   earn,  we  do  not  take  possession  or  custody  of  clients’  money,  or  have  anything  to   do  with  any  of  the  direct  financial  aspects  related  to  operating  their  businesses.       We  operate  in  jurisdictions  with  increasingly  stringent  financial  and  legal   controls.       All  of  the  jurisdictions  where  we  have  operations  have  made  significant  strides  in   their  efforts  to  comply  with  global  protocols  to  prevent  abuse  of  their  financial   and  corporate  systems.  This  includes  preventing  money  laundering,  combatting   terrorist  financing  and  preventing  tax  evasion.       Most  of  the  jurisdictions  have  formal  tax  information  exchange  agreements  with   several  countries  that  are  approved  by  the  Organization  for  Economic  Cooperation   and  Development  (OECD).  Panama  has  nine  formal  OECD-­‐approved  tax   information  exchange  agreements,  including  with  the  United  States  and  Canada,   and  16  double  taxation  agreements  (which  include  provisions  for  information   sharing  between  authorities)  with  countries  such  as  Ireland,  Luxembourg  and  the   Netherlands  included  in  this  group.  The  OECD  has  recognized  Panama  for   improving  the  government’s  access  to  information  about  beneficial  ownership  of   entities  incorporated  in  its  jurisdiction  as  well  as  for  improving  the  sharing  of  such   information  with  authorities  in  other  jurisdictions.       To  quote  from  the  OECD’s  most  recent  peer  review  of  Panama:  “The  2014   Supplementary  Agreement  noted  the  significant  progress  made  by  Panama  in   expanding  its  exchange  of  information  network  since  the  2010  Phase  1  Report,   which  bought  the  number  of  signed  EOI  (exchange  of  information  agreements)   agreements  from  one  to  25.”       In  addition,  Panama,  the  British  Virgin  Islands  (BVI),  and  the  United  States  have   agreed  to  terms  for  financial  institutions  in  their  jurisdictions  to  comply  with  the   U.S.  Treasury’s  Foreign  Account  Tax  Compliance  Act  (FATCA).  This  act  ensures  that   American  citizens  with  accounts  in  these  territories  declare  and  pay  any  taxes  on   income  or  investments  earned  in  them  that  are  due  to  the  U.S.  Internal  Revenue   Service.       We  regret  any  misuse  of  our  services  and  actively  take  steps  to  prevent  it.       We  regret  any  misuse  of  companies  that  we  incorporate  or  the  services  we   provide  and  take  steps  wherever  possible  to  uncover  and  stop  such  use.  If  we   detect  suspicious  activity  or  misconduct,  we  are  quick  to  report  it  to  the   authorities.  Similarly,  when  authorities  approach  us  with  evidence  of  possible   misconduct,  we  always  cooperate  fully  with  them.       With  regards  to  some  of  the  allegations  contained  in  your  questionnaire,  we   would  like  to  comment  as  follows:       (a)                Tax  Evasion  and  Avoidance:  We  strongly  disagree  with  any  statement   implying  that  the  primary  function  of  the  services  we  provide  is  to  facilitate  tax   avoidance  and/or  evasion.  Our  company  does  not  advise  clients  on  the  structuring   of  corporate  vehicles  and  the  use  they  may  make  of  same;  and  we  likewise  do  not   offer  solutions  whose  purpose  is  to  hide  unlawful  acts  such  as  tax  evasion.  Our   clients  request  our  services  after  being  duly  advised  by  qualified  professionals  in   their  places  of  business.  Moreover,  it  should  be  made  clear  that  tax  avoidance  and   evasion  are  not  the  same  thing.    For  example,  a  client  can  use  the  structures   provided  by  us  for  tax  optimization  of  his/her  estate,  such  as  taking  advantage  of   provisions  in  treaties  for  avoiding  international  double  taxation.  Such  behavior  is   perfectly  legal.       (b)                Due  Diligence  on  Clients:  To  begin  with,  approximately  90%  of  our   clientele  is  comprised  of  professional  clients,  such  as  international  financial   institutions  as  well  as  prominent  law  and  accounting  firms,  who  act  as   intermediaries  and  most  of  them  are  regulated  in  the  jurisdiction  of  their  business.   In  the  case  of  Panama,  Law  2  of  2011  allows  the  information  and  documentation   on  the  final  beneficiary  to  be  held  in  custody  by  the  professional  regulated  client.   Likewise,  BVI’s  2008  AML  Act  allowed  the  information  regarding  the  final   beneficiary  to  be  held  in  custody  by  such  regulated  client  until  December  2015.   Thus,  most  of  the  persons  mentioned  in  your  questionnaire  are  not  our  clients  nor   do  they  appear  in  our  database  as  persons  related  to  the  companies  we  formed.   Due  diligence  procedures  were  carried  out  in  accordance  with  the  laws  in  place  at   the  time  the  companies  and  cases  you  made  reference  to  were  incorporated  and   in  existence.  Also,  be  aware  that  a  significant  percentage  of  our  clients  are  banking   institutions,  trust  companies,  lawyers,  and  accountants  who  are  also  obliged  to   perform  due  diligence  on  their  clients  in  accordance  with  the  KYC  and  AML   regulations  to  which  they  are  subject.  In  addition  to  the  above,  we  do  have  some   end-­‐user  clients—we  have  never  denied  this  fact,  and  in  these  cases,  as  in  all   others,  we  have  complied  with  all  applicable  due  diligence  procedures.               (c)                Politically  Exposed  Persons  (PEPs):  We  have  duly  established  policies  and   procedures  to  identify  and  handle  those  cases  where  individuals  either  qualify  as   PEPs  or  are  related  to  them.  As  per  our  Risk  Based  Approach,  PEPs  are  considered   to  be  high  risk  individuals.  Hence,  enhanced  due  diligence  procedures  apply  in   these  cases.  Also,  periodic  follow-­‐up  is  conducted  to  assure  that  no  negative   results  are  found.  Lastly,  you  should  bear  in  mind  that  according  to  international   KYC  policies,  PEPs  do  not  have  to  be  rejected  just  for  being  so;  it  is  just  a  matter  of   proper  risk  analysis  and  administration.       (d)              Sanctions  Lists  and  Convicted  Criminals:  Our  company  does  not  foster  or   promote  unlawful  acts.  The  very  documents  you  cite  in  your  reporting  show   specific  instances  demonstrating  that  once  these  types  of  situations  are  identified,   we  routinely  discontinue  the  provision  of  our  services.  The  Service  Provision   Agreements  signed  with  our  clients  impose  on  them  the  obligation  to  notify  us  as   soon  as  they  have  knowledge  of  a  client  of  theirs  having  been  either  convicted  or   listed  by  a  sanctioning  body.  Likewise,  we  have  our  own  procedures  in  place  to   identify  such  individuals,  to  the  extent  it  is  reasonably  possible.  Bear  in  mind  that   we  have  an  obligation  to  follow  an  orderly  administrative  process  when  resigning   from  client  engagements.  The  time  it  takes  for  us  to  resign  as  registered  agent   from  the  involved  companies  varies  depending  on  our  internal  procedures  and  the   regulations  of  the  respective  country  or  jurisdiction.  Also,  sometimes  the   authorities  require  the  registered  agent  not  to  file  any  resignation  in  order  to   prevent  obstructing  their  investigation.  In  any  case,  our  company  always  complies   with  the  filing  of  the  respective  reports  according  to  the  governing  laws  of  the   specific  country  or  jurisdiction.           Notwithstanding  the  above,  we  would  like  to  take  this  opportunity  to  clarify  that   we  have  never  knowingly  allowed  the  use  of  our  companies  by  individuals  having   any  relationship  with  North  Korea,  Zimbabwe,  Syria,  and  other  countries   mentioned  by  you  that  might  have  been  considered  as  a  threat  to  any  other   country’s  national  security  or  that  have  been  listed  by  a  sanctioning  body.  If  for   some  reason,  unbeknownst  to  us,  some  company  formed  by  us  ended  up  in  the   hands  of  people  having  such  relations  for  whatever  criminal  or  unlawful  purpose,   we  strongly  condemned  that  situation  and  took  and  will  continue  taking  any   measures  that  are  reasonably  available  to  us.       (e)                Provision  of  Company  Secretarial  Services:  Company  Secretarial  Services   are  legal  services  that  allow  a  professional  company  provider  to  act  on  behalf  of  a   company  that  is  owned  by  third  parties.  Company  Secretarial  Services  are  not   used  to  hide  the  identity  of  the  real  owners  of  the  company  as  for  instance,  a   director  is  not  in  its  nature  the  owner  of  the  company.  These  services  often   include  directorships  and  facilitate  document  filings  before  the  authorities  and   registry  of  a  company’s  jurisdiction.  For  example,  a  secretary  might  help  a   company  register  for  taxes  and  file  for  licenses,  manage  patents  and  trademarks,   tax  returns  and  other  documentation  to  be  handled  and  filed.  Company   Secretarial  Services  are  provided  by  many  firms  to  professional  clients  and   investors  all  over  the  world.  The  same  director  or  company  secretary  can  act  on   behalf  of  many  different  companies  in  different  jurisdictions.  That  is  widely   accepted  and  perfectly  legal,  especially  in  cases  where  the  purpose  of  a  company   is  to  be  a  holding  company  or  own  immovable  or  movable  property.    The  fact  that   many  companies  have  the  same  directors  and/or  address  does  not  mean  that  such   companies  are  connected  in  any  way,  as  is  commonly  assumed.  In  the  case  of   professional  service  providers,  usually  a  director  or  company/corporate  secretary   has  no  economic  interest  or  commercial  link  to  the  company’s  activity  and  he/she   does  not  endorse,  participate  or  assist  in  the  commercial  or  passive  roles  of  a   company  in  any  way.  Following  the  pre-­‐established  guidelines,  the  secretary   appoints  agents  and  attorneys  that  then  carry  out  the  administration  of  the   company.  Our  company  is  not  the  only  one  providing  this  type  of  service.  You  can   take  a  look  at  UK  law  firms’  websites  and  you  will  find  more  information  about  the   provision  of  this  service.       Below  please  find  a  small  sample  of  companies  that  offer  company  secretarial   services:       •                      Elemental  CoSec,  London,  UK   •                      CT  Corporation,  New  York,  USA   •                      The  Corporation  Service  Company,  Delaware,  USA   •                      National  Registered  Agents,  Inc.,  USA   •                      InCorp  Services,  Inc.,  Nevada,  USA   •                      My  LLC,  California,  USA   •                      Northwest  Registered  Agent  LLC,  WA,  USA                     •                      Swift  Formations,  UK   •                      DeMontford  Bell,  UK   •                      CG  Incorporations,  UK   •                      TCS  Group  International,  UK   •                      MILS  Corporation  Ltd.,  UK   •                      HGN  Limited,  UK   •                      A  &  P  Intertrust  Corporation,  Canada       (f)                Shareholders  and  Beneficial  Owners:  Closely  related  to  the  point  above,  as   part  of  the  services  our  trust  company  provides,  we  often  constitute  trusts  for   shares.  As  a  result,  your  allegations  that  we  a  provide  shareholders  with  structures   supposedly  designed  to  hide  the  identity  of  the  real  owners,  are  completely   unsupported  and  false.    These  types  of  services  are  always  supported  by  the   existence  of  legally  recognized  vehicles  utilized  for  such  purposes  by  all  service   providers  in  this  industry.  Even  though  we  do  provide  shareholdership  services   through  the  legal  structures  already  explained,  we  do  not  provide  beneficiary   services  to  deceive  banks.  Banks  currently  carry  out  their  due  diligence  procedures   just  as  we  do.  It  is  difficult,  not  to  say  impossible,  not  to  provide  banks  with  the   identity  of  final  beneficiaries  and  the  origin  of  funds.       (g)                Administrative  Penalties:  It  is  mentioned  in  your  questionnaire,  that  we   have  been  fined  by  the  BVI  authorities  for  non-­‐compliance  with  AML  regulations.   Please  be  aware  that  these  are  administrative  fines  imposed  by  the  regulator  to   registered  agents  when  the  intermediaries  or  professional  clients  do  not  comply   with  their  contractual  obligation  of  informing  the  registered  agent  of  a  client  of   theirs  having  been  either  convicted  or  listed  by  a  sanctioning  body.  If  you  recall,   we  already  explained  that  as  regulated  professional  clients,  BVI’s  2008  AML  Act   allowed  the  information  regarding  the  final  beneficiary  to  be  held  in  custody  by   such  regulated  clients.  But  if  the  intermediary  does  not  comply  as  required,  the   registered  agent  is  penalized.  You  can  access  the  Regulator’s  website  and  you  will   find  that  we  are  not  the  only  agents  who  have  been  penalized  for  this.  In  fact,  this   was  very  common  up  to  December  2015,  when  the  cited  law  allowed  full  reliance   on  intermediaries.  Since  then,  the  law  has  been  changed.    You  will  also  be  able  to   verify  that  the  fines  referred  by  you  were  applied  before  said  change  occurred.         (h)                Backdated  Documents:  The  issuance  of  documents  with  a  retroactive  date   is  a  well-­‐founded  and  accepted  practice  when  the  decisions  made  with  regard  to   the  particular  document  are  recorded  in  resolutions  approved  before  or  when  the   transaction  in  particular  has  taken  place  and  the  formalization  is  still   pending.    Such  practice  is  common  in  our  industry  and  its  aim  is  not  to  cover  up  or   hide  unlawful  acts.    As  we  have  previously  stated,  our  company  does  not  foster  or   promote  unlawful  acts.       (i)                  Destruction  of  Documents:  As  to  your  allegations  about  this  matter,  we  do   not  know  what  the  source  of  your  information  is,  and  we  categorically  deny  their   veracity.  Let  us  be  clear  that  it  is  not  our  policy  to  hide  or  destroy  documentation   that  may  be  of  use  in  any  ongoing  investigation  or  proceeding.       Finally,  we  will  not  answer  any  questions  related  to  private  information  regarding   our  company  founding  partners  as  we  do  not  see  the  public  interest  behind  said   inquiries.  Likewise,  we  will  not  make  any  reference  to  the  statistics  and  other   “factual”  information  about  numbers  and  amounts  since  they  are  far  from  being   accurate.  In  relation  to  our  asset  management  company,  same  does  not  have  the   capacity  by  law  to  use,  move,  or  dispose  of  in  any  way  their  clients’  money.       You  may  consider  this  document  as  our  response  to  your  questionnaire.  However,   it  should  not  be  considered  as  a  validation  of  the  information  contained  therein,   and  especially  to  the  method  by  which  said  information  was  obtained.  From  the   way  you  present  your  “facts”,  it  appears  that  you  have  had  unauthorized  access  to   proprietary  documents  and  information  taken  from  our  company  and  have   presented  and  interpreted  them  out  of  context.  We  trust  that  you  are  fully  aware   that  using  information/documentation  unlawfully  obtained  is  a  crime,  and  we  will   not  hesitate  to  pursue  all  available  criminal  and  civil  remedies.                   Kind  regards,      Carlos  Sousa   Public  Relations  Director  MOSSACK  FONSECA  &  CO.  (PANAMA)       Mossfon Building 54th E. Street, Panama Tel. +507 205 5888 www.mossfon.com