Panama Papers

Panama Papers issue continues for the Norwegian bank DNB

Michael Sandelson, Sarah Bostock & Lyndsey Smith
The Foreigner

DNB executive management was not aware of contact with Mossack Fonseca’s representatives in Luxembourg, reports say.

Revelations of the part state-owned bank’s involvement in the global Panama Papers affair first surfaced in Aftenposten on April 3. They reported that DNB, whose largest shareholder is the Norwegian government, with 34 percent, organized Seychelles-based mailbox companies for almost 10 years on behalf of their clients.

Norway’s national daily is one of over 100 media worldwide who have participated in the investigative journalism case.

German publication Süddeutsche Zeitung was the first publication to obtain access to some 11.5 million documents from an anonymous source. These cover a period of about 40 years.

The source contacted the paper over a year ago and has submitted encrypted internal documents from the Panamanian law firm. It sells anonymous offshore companies around the world.

These documents, which reveal information on 214,000 offshore companies connected to people in more than 200 countries and territories, have been shared with the International Consortium of Investigative Journalists (ICIJ).

Norwegian bank DNB issued a press release stating that its Luxembourg subsidiary had helped “some 40 customers” set up companies in the Seychelles between 2006 and 2010. “We shouldn’t have done this,” said CEO Rune Bjerke. “It wouldn’t have happened with today’s regulations.”

On April 4, Trade and Industry Minister Monica Mæland stated that she had met with DNB regarding DNB Luxembourg and the Seychelles-based companies.

“As a shareholder in DNB, we [the government] expect that companies exhibit the greatest possible degree of transparency regarding their cash flow stream. I have asked the Board for a written account. This will be made public,” she said in a statement.

This was the same day that Bjerke declared that DNB Luxembourg’s tax haven move, with the help of Mossack Fonseca, had “slipped beneath the radar of the Board, the management, and the internal audit.”

DNB has initiated an investigation into the issue. All the roughly 40 companies, some 30 of which are owned by Norwegians, have been wound up. Bjerke has confirmed this DNB Luxembourg-handled operation has ceased.

Scrutinizing offshore tax havens has been on finance officials’ agenda for a number of years. In 2010, then Norwegian Tax Administration Director, Svein Kristensen, announced that he had set up a 100-strong team to hunt for some NOK 200 billion hidden in tax havens.

Norway’s Ministry of Finance unveiled a new trans-Nordic-Panama tax reporting agreement in 2012. Norwegian NGO employees have expressed concern over the billions of kroner that are placed in tax havens.

2014 saw Trade and Industry Ministry officials ask DNB management whether the bank was involved with the business of tax havens. “The answer they [officials] were given [at the time] was ‘no,’” Monica Mæland, incumbent Minister of Trade and Industry tells NRK.

Setting up offshore companies and/or having money in them is not illegal, but tax avoidance is.

Aftenposten reports that they have “no reason to allege that either DNB or their clients have broken laws in Norway, Luxembourg, or the Seychelles” in the Panama Papers affair.

At the same time, the national daily says it can document that two current DNB employees with top positions were in contact with Mossack Fonseca representatives in Luxembourg. Documents they received regarded administrating the Seychelles-registered companies, with one having signed several papers to do with the mailbox companies.

About 200 Norwegians are named in the 11.5 million leaked documents.

Nordic banking group Nordea has also aided some of their customers to establish offshore companies. They say that they are to end their relationship with the law firm.

In a statement issued in the wake of the revelations, they say that they “strongly denounce” tax evasion.

This article was originally published on The Foreigner. To subscribe to The Foreigner, visit theforeigner.no.

It also appeared in the April 15, 2016, issue of the Norwegian American Weekly. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.

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