Ukraine president denies offshore trust set up to minimize tax

TOKYO (Reuters) - Ukraine President Petro Poroshenko said on Wednesday he had placed his assets in an offshore trust to separate his business and political interests after he took office and not to minimize tax, declaring the arrangements were transparent.

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He made the comments at a press conference in Tokyo where he was repeatedly questioned about the offshore trust, which featured in the “Panama Papers” cache of classified documents released over the weekend.

The head of Ukraine’s fiscal service on Tuesday said the agency would examine the documents relating to President Poroshenko’s offshore assets.

“There does not need to be an investigation,” because the trust was set up transparently and has no trading operations or bank accounts, Poroshenko said, when asked about the fiscal service’s planned investigation.

However, he indicated he would co-operate with an investigation, if necessary, and that the transparent manner in which the trust was created marked “the main difference from the cases in Iceland ... Russia and the main difference from the cases in other parts of the world”.

Iceland’s Prime Minister Sigmundur David Gunnlaugsson became the first casualty of the leaked documents from a Panamanian law firm, resigning on Tuesday. The documents have shone a spotlight on the offshore wealth of politicians and public figures worldwide.

Poroshenko said he could not access the assets until the end of his presidency and that he had not sold them as promised when he assumed office because it was impossible to make a sale due to the war in the country’s east with pro-Russian separatists.

Governments across the world have begun investigating possible financial wrongdoing by the rich and powerful after the leak of four decades’ worth of documents from the law firm Mossack Fonseca, which specializes in setting up offshore companies.

The more than 11.5 million documents have sparked public outrage and debate over how the world’s rich and powerful park their wealth and avoid taxes.

Among those named in the documents are friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain and Pakistan.

U.S. President Barack Obama said the Panama Papers showed tax avoidance was a major problem and urged the U.S. Congress to take action to stop U.S. companies from taking advantage of loopholes that allow tax avoidance.

Reporting by Aaron Sheldrick; Editing by Sam Holmes