Panama Papers: Anglo Irish Bank was repeatedly recommended to clients

Anglo Irish Bank's branch in Austria was among the small number of banks that were repeatedly recommended by Panama-based law firm Mossack Fonseca (MF) to its clients, the leaked Panama Papers show.

The Panama Papers leak of millions of documents lifts the lid on how offshore companies are used by the global elite to conceal the ownership and control of assets and property worth billions. Members of the The International Consortium of Investigative Journalists, which includes The Irish Times, have spent more than a year examining the cache of 11.5 million documents and records from MF, one the biggest providers of offshore services to individuals, companies and middle men who advise them.

In February 2006 Jan Stockhausen of MF in Panama told one of his clients that there was "practically no bank in the world anymore which still opens bank accounts in the name of offshore companies without the knowledge about the real 'ultimate beneficial owner' (as they call it). Not even Panamanian banks do this, let alone Hong Kong. "

He said that "a major part of my work revolves around finding banks that have fairly relaxed conditions," but he had only come across one bank in the Czech Republic that opened accounts without information being demanded regarding the ultimate beneficial owner.

Mr Stockhausen said MF had gone through procedures to open accounts with various banks and then listed seventeen, including Anglo Irish Bank (Austria), Berenberg Bank (Germany), Banque Privee Edmond de Rothschild (Luxembourg), Clariden Bank (Switzerland), and HSBC (Isle of Man, Hong Kong and Panama).

“The only bank where we ever managed to open an account without naming the [ultimate beneficial owner] at all was Ebanka (Czech Republic).”

All the others asked for at least a copy of the due diligence on the beneficial owner. He said that Hong Kong banks were “difficult these days” and that even he had to travel there to open an account with HSBC.

The client wanted to open an account for a company he owned and the correspondence shows he was irritated by having to give personal documentation as it was the company, not him that was opening the account. “It sounds weird to me. Where is the confidentiality of all those structures?” he asked.

Anglo in Austria features in a seven-bank list of recommended private banks sent by Stockhausen in numerous emails during the 2000s, the leaked files show.

They also show that a number of other MF employees used the same wording, and the same list, when sending information about recommended banks to clients. “We have had the best experience with the following banks,” the emails say, before listing Anglo and the others.

The leaked files also include instances of Anglo in Austria giving references concerning customers of theirs who are setting up offshore companies and foundations using the services of MF. The Anglo Irish Bank branch in Austria was itself a client of MF, and as such could ask the Panamian law firm to establish offshore companies for it. These would be for the use of the bank's customers.

An email on a 2006 conference in Canada which was attended by two MF employees includes the schedule for the event. Peter Zipper, of Anglo's Austrian branch, gave an address on the topic: Austria, the Best Offshore Banking Centre in the World.

Anglo bought the Austrian bank from Royal Bank of Canada in 1995. The Vienna-based bank was then known as Royal Trust Bank (Austria) and was attractive to Anglo as it had €300 million in deposits that could fund new lending.

Anglo sold the Austria private banking business to a Swiss broker Valartis in 2008 making a profit of €49 million. The bank itself part-funded the Swiss firm’s €141 million purchase of the Austrian subsidiary with a loan of €24 million.

The sale of the bank and the loss of the €600 million in deposits held in the Vienna-based subsidiary was seen as odd at a time when the bank was trying to hold on to deposits and raise fresh funding as the financial crisis was worsening.

One former senior Anglo banker said the bank had been uncomfortable about the Austrian branch and the source of its deposits, and feared that it might have drawn Anglo into a tax evasion controversy, perhaps involving US customers.

The official reason given to investors for the sale was that it formed part of the bank's disposal of non-core assets to focus on lending in Ireland, Britain and the US, and its wealth management business in Ireland and Britain.