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Vulture Funds attack Panama

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 “Vulture funds” attack Panama

International lawyers say it is a ploy to divert attention from what is happening in Argentina.

The desperate race to seek to collect the debt that Argentina maintains with so-called “vulture funds”, has made them try to force connections, and put into question Panamanian companies, as well as the legal services industry and the legitimacy of tax processes in the country.

It all goes back to 2001 when Argentina was declared in default and from that date, the vulture funds bring a legal dispute that is now in the US courts.

The situation is such that it has reached the point of involving Panama and its legal services in order to maintain pressure on Argentina, even when one knows that in this country the laws are strict in particular to those relating to the standard of “Know your customer”.

Panama has not been the only country attacked by vulture funds, countries like Paraguay, Poland, Brazil and Peru have also been victims.

In this regard, some international media have neglected to conduct research in Argentina in order to accuse the Panamanian legal industry of facilitating illegal activities.

According to Gian Castillero, president of the Association of International Attorneys of Panama, these accusations are a misunderstanding about the function of the Panamanian legal services system, which is designed to serve national interests, and internationally, offers competitive advantages, such as providing a flexible and open corporate system that calls to foreign investment. “That’s very different from saying that the Panamanian system is a den of thieves and that it lends itself to criminal activities,” he said.

Castillero was clear in saying that in Panama, like it is worldwide, there are “Know your customer” regulations. This is not new to Panama, nor for the international community, it is simply an additional responsibility that any service provider worldwide has to comply with.

“Panama has had a Know your customer law since 1994 and that law was revised fully a year ago by means of Law 1 of 2012. Panama raised its standard of Know your customer to international levels.”

When questioned about the responsibility that a law firm has in registering a company, the international lawyer said that it is limited to do everything that one can to diligently investigate the person requesting the company and the activity for which the company will be used, to rule out any indication that the person has a criminal record, or that the company is used for an improper activity.

The President of international lawyers was emphatic in reiterating that the attacks against Panamanian law firms are to some extent due to the ignorance of the role of Panamanian lawyers.

“The role of a Panamanian lawyer in a corporation is that of resident agent and the law gives it two powers: one, to assist the company with the payment of annual fees; and two, to assist companies to register documents at the public registry. The law firm or resident agent has no active role in the daily life of the company, I think it really is a misunderstanding,” he said.

He added that what happens is that in a law firm, when a company is involved in some questionable activity, the resident agent makes news who has been involved in shaping the company, but that does not necessarily imply that either the lawyer knows or that the lawyer has failed to meet the need to know the customer rules and comply with the requirements of Panamanian law.

Mossack & Fonseca, an affected firm speaks

Logo Mossack Fonseca

Meanwhile, the firm Mossack Fonseca & Co. which has been the target of attacks, states that the role of resident agent is required by law and does not involve fundraising or liability for the actions of the established companies.

Mossack Fonseca has been the victim of accusations within the international dispute developing between the government of Argentina and investment funds known as “Vulture Funds”. “Our name has been wrongly involved by some sensationalist media every time we have been asked to provide information in collaboration with the civil process that is being heard in the State of Nevada, USA, in relation to this issue.”

“We believe that everything is part of an orchestrated strategy by lawyers for the so-called Vulture Funds, and endorsed by the defendants in this process, in order to delay their trial in Nevada and divert attention from the population of Argentina, into a fictional story, unsubstantiated and based on assumptions, in order to divert attention from what is really happening or has happened in that country, where the Mossack Fonseca Group does not have nor has had any relationship. In this attempt to discredit our Group, they have also attacked the Panama legal services”, says the firm.

Why is this action questioned in Argentina?

Questioned about the linking of the firm with the situation in Argentina, Mossack & Fonseca said that the involvement of the company Aldyne LTD. in this topic has been circumstantial and unfortunate, because of its coincidence as administrator / nominal Director of two companies in Nevada, where the professional client who requested from the Mossack Fonseca Group the incorporation of them, and designated for these two companies the Swiss entity Helvetic Group as the owner of their shares, as trustee. In Argentina, the prosecutor who is allegedly investigating what happens in that country with the vulture funds and all of its scandals, totally wrong, uninformed and unaware of corporate or company matters, said that all Nevada companies that have Aldyne Ltd. as Manager/Director are involved.

“The Mossack Fonseca Group does not know and has no relationship with the mentioned Helvetic Group, since it has never requested or purchased services from it. Also unknown is the identity of the persons linked to it.” The firm reiterates that the Mossack Fonseca Group is not a defendant in the civil case being heard in the State of Nevada, USA. “Our only involvement in this process is due to requests for information on companies wrongly involved, for which we are serving as registered agent,” they concluded. What is a “Vulture Fund”? Popularly called vulture funds, these are investment funds of risk that are dedicated to repurchase state debts at prices between 20% and 30% for later legally required payments of 100% of the debts, in this case the sovereign debt bonds of Argentina. They are generally countries that are in danger of default.

For more information, visit http://efpanama.com/fondos-buitre-atacan-a-panama/

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