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FSS may probe 195 individuals for possible tax evasion after Panama leak

All Headlines 16:19 April 05, 2016

SEOUL, April 5 (Yonhap) -- Seoul's financial watchdog said on Tuesday it will consider opening an investigation into 195 South Koreans who were named in a recently leaked foreign document as being suspected of attempting to avoid taxes by setting up paper companies in offshore tax havens in violation of foreign-exchange laws.

The U.S.-based International Consortium of Investigative Journalists (ICIJ) on Monday disclosed nearly 12 million documents leaked from the files of Panama-based law firm Mossack Fonseca.

The "Panama Papers" reportedly carried details of hundreds of thousands of clients and evidence that some companies based in the tax haven were being used mainly for tax evasion. The documents contained clients' financial arrangements from 1977 through as recently as December.

The clients also include 195 individuals who had their residential addresses in South Korea, according to the Financial Supervisory Service (FSS).

"We will consider opening a probe into their deals if the 195 residents are found to be involved in any wrongdoing regarding foreign-exchange laws," an FSS official said. Under foreign exchange laws, local residents are obliged to report to the authorities when they establish a company overseas.

The financial watchdog said it will report the cases suspected of being linked to tax avoidance and disguised transactions to the National Tax Service for further investigation.

Meanwhile, the Financial Consumer Agency (FICA), a consumer rights group, called on prosecutors to take the lead in the investigation into the 195 people in cooperation with the tax agency.

"Those who came forward to report their wrongdoings have avoided steep penalties. They should be dealt with depending on what they gained from the unlawful transactions," FICA President Cho Nam-hee said in a statement.

kyongae.choi@yna.co.kr
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