2016 Activities

Discussion Workshop, Allegations in the Panama Papers: Demands to Form an Official National Team to Examine their Impact on Palestine

Discussion Workshop, Allegations in the Panama Papers: Demands to Form an Official National Team to Examine their Impact on Palestine

At the wake of the global, regional and local debate and dialogue, which was raised recently on the impact and implications of the leaked Panama documents relating to the integrity of some officials in the public and private sectors, the Coalition for Integrity and Accountability-AMAN held a session with related parties to discuss the content of these leaks., based on Palestinian laws. The discussion also covered issues such as the extent of respect given to the principles of transparency by companies whose registration is a matter of formality in countries better known as tax havens. In addition, concerns were heightened due to the presence of Palestinian names among those listed in the documents. With that in mind, the session aimed at discussing possibilities holding community accountability sessions, especially since many questions were raised by the public on this issue.

Financial disclosures are protective shields

Dr. Azmi Shuaibi, the Anti-Corruption Advisor to the Board-AMAN, opened the session by stressing the importance of holding a professional debate, which stems from the principle of preserving public interest without losing sight of the interests of individuals. In addition, he said that discussing the information included in these leaks is vital due to the fact that the individuals included in the list have influence on decision makers on the one hand, and the necessity to verify integrity of Palestinian institutions and individuals mentioned in these leaks, on the other hand. As revealed, there are companies registered in areas that are not known to be investment or production areas, but rather areas for tax evasion and money laundering. 

Dr. Shuaibi said that this is where the importance of financial disclosures is beneficial when applied, since it reveals finances and assets of the person before he/she assumes public office.  Such disclosures of funds and assets provide evidence to defend public figures in the event he/she are wrongly accused of corruption.  Hence, it is not as most people believe only for prosecuting the corrupt.  Moreover, it is crucial that the private sector abide by the principles of the Corporate Governance Code, which was adopted by our national institutions. He also reminded attendees that just because some Palestinian names were mentioned in the leaks, does not necessarily mean that they are guilty or suspected of corruption acts. Nevertheless, this indicates the need for more openness in terms of information to ensure the highest level possible of transparency, he added.

As for Palestinian institutions mentioned in the Panama Papers, Mr. Bilal Barghouthi, AMAN’s  Legal Advisor, stated that the Palestinian Companies Law allows companies that are registered abroad to operate in Palestine regardless of their respective owners. However, it is conditional that these companies are also registered with the competent parties in Palestine. Mr. Barghouthi also added that related legislations within the Palestinian legal system do not differentiate between foreign companies registered abroad and work in Palestine and local Palestinian companies that are registered and operate in Palestine. This applies both in terms of investment incentives stipulated in the legislations promoting private investment, or with respect to tax exemptions in accordance with tax legislations in force in Palestine.  Moreover, he said that companies, whether local or foreign operating in Palestine, are subject to the control and responsibility of the Palestinian Companies Controller. Furthermore, he said that the Anti-Corruption Law obliges public figures named in the leaked Panama Papers to provide financial disclosures to the Anti-Corruption Commission.

One Issue; Multiple Responsibilities

Director of the Palestinian Capital Market Authority, Mr. Barraq An-Nabulsi, stated that the Palestinian financial system allows Palestinian and foreign companies in Palestine to list their names in the financial market.  He clarified that “listing” means disclosure, and that disclosure requirements set by the Ant-Corruption Commission do not distinguish between local and foreign companies concerning these issues. In this regard, disclosure is comprised of two parts: financial disclosure, which is related to the capital, shares, and transactions of the company; and informational disclosure, which is linked to those in charge of the company, as well as its directors, members, and funds. He further stressed that functions of the Capital Authority will remain incomplete in the absence of a modern up-to-date law in-line with the continuous economic changes in the area. 

Mr. Nabulsi elaborated by saying that while the basic role of the Authority is to develop and regulate the financial market; it strives to attract the maximum number of investments from abroad hence exerting concentrated efforts to limit factors that drive away investors and investment possibilities in Palestine.
Mr. Ra’ed Nu’man, Senior Director at the Department of Income Tax, at the Ministry of Finance, for his part, said that new developments have occurred concerning the legal system on income tax, and especially after the issuance of the Law by Decree No. 8 for 2011 on income tax. According to Article 7, for example, the ruling indicates that a person’s income earned abroad is exempt from tax as long as it did not stem from his/her earning or savings deposits in Palestine.  He further explained that foreign and resident companies have recently become subject to the same ratio of income tax.

From another aspect, Mr. Osama Al-Sa’di, Head of the Legislative Studies Section at the Anti-Corruption Commission, stated that the Anti-Corruption Law included a wide range of taxpayers who are obliged to submit financial disclosures, whether members of the PLC, or those who work in the judiciary.  The law also included members of boards and directors of public companies, but not private companies.  He further explained that the Anti-Corruption Commission if and when it receives complaints related to illicit gain it immediately addresses the competent court to examine the case and determine whether there is suspicion of corruption or not. In regard, to names of officials mentioned in the Panama Papers, discussed in this workshop, he said this fact does not proof that they are corrupt.

Mr. Mohammad Manasreh, Legal Advisor at the State Audit and Administrative Control Bureau (SAACB), stated that Bureau discussed the issue internally, and came out with two conclusions:  the Bureau’s boundaries, on control and accountability regarding the leak concerning the Active Pharmaceutical Ingredients Committee (APIC), are in the range of the Investment Fund. This was defined on grounds that the Fund is a shareholder, noting that the Bureau is ready to investigate the Panama Papers once a decision is taken in this regard.

Mr. Salah Al-Odeh, Director of the Ramallah and Bireh Chamber of Commerce and Industry, said that investigating the information in the Panama Papers should have been conducted as soon as the leaks were released, emphasizing the negative effects of rumors on issues such as these; i.e., very harmful to all concerned: people whose names are mentioned, the average citizen, as well as judicial and control parties.  

Attendees of the session all agreed that there is lack of clarity concerning the political will and supporting environment regarding follow-up on the Panama Papers epitomized by the lack of action taken by official institutions in this regard. The attendees also expressed their opinions regarding investigating the details of these papers saying that it is not the responsibility of one party. Therefore, they call on the government to form a national team from related official institutions to scrutinize these documents while ensuring that the Palestinian Law is employed in prosecuting anyone who abused his official position, misused or manipulated public funds, or evaded taxes. In addition, it is equally important that the issue is followed up and not ignored in order to reassure the public that there are official institutions whose are concerned with public affairs.

It is worth noting that the session was held in the presence of representatives from the Ministry of Finance, the Palestinian Capital Authority, Consumer Protection Association, The Anti-Corruption Commission, the SAACB, PLC, the Ramallah and Bireh Chamber of Commerce and Industry, as well as a number of media outlets, namely; Radio Ajyal, Al-Quds newspaper, Al-Safir newspaper, the Palestinian News Agency-Wafa, and other academics and interested individuals.

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