RBC appears in leaked documents
Canada’s largest commercial bank finds itself in the middle of a global uproar over leaked documents exposing activities in offshore tax havens.
But the Royal Bank of Canada, which was among financial institutions named in the so-called “Panama Papers,” has denied any wrongdoing, saying it has “established controls, policies and procedures in place” to detect and prevent tax evasion.
“We have an extensive due diligence process to ensure we understand who the client is and what their intentions are, and will not proceed with a transaction until we do,” said RBC in a statement Monday.
RBC also said there are a number of legitimate reasons to set up holding companies in low-tax havens. “If we have reason to believe a client is seeking to commit a criminal offence by evading taxes, we would report that offence and not do business with the client,” it said.
The bank was named alongside dozens of other financial institutions in the massive leak of documents contained in 11.5 million records from Panama-based law firm Mossack Fonseca, reportedly one of the world’s top creators of shell companies — entities that have no active business or operations and, although they can be used for legitimate purposes, can also be used to hide asset ownerships in order to evade taxes.
The International Consortium of Investigative Journalists, a Washington-based non-profit organization, combed through the records that it said were provided by an anonymous source.
Also named in the Panama Papers are more than 100 past and present politicians allegedly linked to offshore companies — including Russian President Vladimir Putin, Chinese President Xi Jinping and Icelandic Prime Minister Sigmundur Davið Gunnlaugsson — as well as other public figures in the U.K., Ukraine and Pakistan.
According to those media outlets given access to Mossack Fonseca data, RBC and its subsidiaries were named in connection with more than 370 registered as socalled “shell” companies.
In its statement, RBC said it works within the legal and regulatory framework of every country in which it operates, and builds internal policies based on the regulatory requirements of each jurisdiction.
“We make sure our clients have the information they need to properly file their taxes and we advise them of their obligation to do so,” the bank said, adding it advises clients to seek independent professional tax advice.
The Canada Revenue Agency did not respond to requests for comment by deadline on Monday.
The Canadian government has enacted numerous measures and guidelines to crack down or limit such offshore tax incentives in recent years, but the problem has persisted.