Canada seeks 'Panama Papers' data, major bank defends practices

OTTAWA/TORONTO (Reuters) - Canada on Monday sought a copy of the “Panama Papers” revelations about potential tax evasion while a big Canadian bank defended its practices after documents allegedly showed it had used the services of the firm at the heart of the case.

A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto, January 22, 2015. REUTERS/Mark Blinch

Governments across the world began investigating possible wrongdoing by the rich and powerful after a huge leak of documents from a Panamanian law firm revealed the financial arrangements of global politicians and other figures.

Canada is closely watching the cases of citizens found to have set up offshore companies in Panama and elsewhere and will refer cases to prosecutors if necessary, said a spokeswoman for National Revenue Minister Diane Lebouthillier.

“The Minister of National Revenue has instructed Canada Revenue Agency officials to obtain the list of data leaked through the Panama Papers,” said Chloe Luciani-Girouard.

Royal Bank of Canada RY.TO said it had controls in place to prevent illegal activities after documents allegedly showed it had regularly used the services of Mossack Fonseca, the Panama-based firm.

RBC, Canada’s biggest bank, and its subsidiaries were associated with 378 shell companies registered in the Mossack Fonseca data, the Toronto Star newspaper reported.

RBC said that it worked within the legal and regulatory framework of every country in which it operates and had an extensive due diligence process to understand what its clients’ intentions were.

Canada’s opposition left-leaning New Democrats said the fact a prominent Canadian bank could be involved was “very worrying.”

A spokesman for federal Finance Minister Bill Morneau said that “at this point, we have no reason to believe Canadian banks have acted unlawfully.”

Canada’s new Liberal government last month promised to invest almost C$450 million ($345 million) over five years to gather more information about tax evasion and tax avoidance.

Since January 2015, Canada had already been monitoring all international transfers of funds worth more than C$10,000, including those from Panama, said Luciani-Girouard.

“Compliance actions will be taken as appropriate - including referrals to Public Prosecution Services of Canada for possible criminal prosecution,” she said in an e-mail.

The Toronto Star named one Canadian listed in the documents as Eric Van Nguyen, who along with seven others was charged in New York in 2014 with duping investors out of $290 million. He could not immediately be contacted.

($1=$1.31 Canadian)

Writing by David Ljunggren; Editing by Meredith Mazzilli