British firms have started to receive letters from the City watchdog as a result of the Panama Papers revelations.
The FCA has confirmed it has written to “a number of firms” about the issue, including those on the regulator’s Systematic Anti-Money Laundering Programme.
A spokesman for the FCA said: “We are working closely with a number of other agencies who are also looking at this.
“As part of our responsibility to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime.”
Earlier today (5 April), the FCA published its annual Business Plan, which identifies financial crime and anti-money laundering activity as one of the regulator’s priorities for the year.
The comments came a day after HM Revenue & Customs announced it intended to crack down on any individual, corporation and their advisers who have been found to have acted illegally to shelter tax.
Jennie Granger, director general of enforcement and compliance at HMRC, said the Revenue had asked the International Consortium of Investigative Journalists (ICIJ), which carried out the comprehensive year-long investigation, to share its details.
She said: “HMRC is committed to exposing and acting on financial wrongdoing and we relentlessly pursue tax evaders to ensure they pay every penny of taxes and fines they owe.
“HMRC has already received a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation.
“We will closely examine this data and will act on it swiftly and appropriately.”
On Sunday 3 April, the ICIJ, together with media partners around the world, published a string of stories on the back of leaked documents called the ‘Panama Papers’.
The 11.5m documents cover nearly 40 years, from 1977 through the end of 2015, and were allegedly leaked from Panama-based global law firm Mossack Fonseca.
Political regimes, terrorist organisations, celebrities, footballers and the ultra-wealthy have all come under the spotlight for the way in which they allegedly created offshore companies which, it is claimed, have been used to shelter their money from tax.
Creating an offshore company in and of itself is not illegal, and can be helpful to avoid international double taxation.
In a full statement, which can be read online, Mossack Fonseca said: “If we detect suspicious activity or misconduct, we are quick to report it to the authorities,
“Our company does not advise clients on the structuring of corporate vehicles and the use they may make of them.
“We likewise do not offer solutions whose purpose is to hide unlawful acts such as tax evasion.”
However, the FCA’s action and HMRC’s tough line comes after the government announced a series of measures to combat money laundering and tax cheats.
The HMRC will this year automatically receive offshore account and trust data from more than 90 countries, including British Overseas Territories and Crown Dependencies with a financial centre.
In the summer Budget 2015, the government gave HMRC an additional £800m to invest in compliance and tax evasion work, which is expected to recover £7.2bn in tax over the next five years.
It includes tripling the number of criminal investigations HMRC can undertake into serious and complex tax crime, focusing particularly on wealthy individuals and corporates, with the aim of achieving 100 prosecutions a year by the end of the Parliament.
While the extent of the Panama Papers leaks - and the inevitable regulatory tightening across jurisdictions - is yet to be known, advisers have said not all overseas financial activity should be tarred with the same brush.
Nigel Green, founder and chief executive of deVere Group, said: “Clearly, tax evasion is illegal and punishable by law. It is a serious criminal global issue that needs to be tackled with more vigour.
“However, I do not believe the Panama Papers allegations are representative of today’s wider international financial services industry.
“The overwhelming majority of the offshore sector only provides services that are fully compliant and legal and they are used by law-abiding clients, who are simply looking for typically better returns, more investment options and greater flexibility.
“Many of the documents that have been revealed by the Panama Papers case date back decades and for the last several years a new and totally unprecedented era of transparency and disclosure has been ushered in.
“Offshore financial centres allow those who qualify to do so to use legal, bona fide international investment products to form part of a robust and sensible financial planning strategy.”
