Why Samoa’s "Laundromat" moment an international embarrassment

The story titled “Samoa, international laundry, immortalised on film” published on the front page of the Samoa Observer on Tuesday, came with mixed emotions.

On one hand, some would have been thrilled to have Samoa’s name uttered by Hollywood’s A-listers Meryl Streep and Antonio Banderas for millions of viewers around the world to see.

Coming at the heels of another Hollywood blockbuster, Hobbs & Shaw, which gloated about Samoa, its got to be said that this country has been on a pretty good wicket in terms of Hollywood exposure.

But that’s where the good news stops. You see, there is nothing to be proud of in the story behind the “The Laundromat.”

If anything, it is utterly shameful that Samoa would even be associated with a film about tax havens, money laundering and all the other unpleasant themes highlighted the film which premiered at the Venice Film Festival and now available on Netflix for the world to see.

Indeed, the idea that Samoa is being mentioned in the same breath as terms like tax avoidance, dirty offshore trusts and others that no person in their right mind would want to be associated with is reprehensible.

It does not stack up with the image of the “beautiful Samoa” where its leadership of big laui’as gloats about transparency, accountability and good governance as their mantra. This Government should be embarrassed.

 “The Laundromat” by the way is based on the Panama Papers, which surfaced in 2016. For the uninitiated*, the Papers was a leak of 11.5 million documents from a Panama law firm, which reveals how the world’s rich hide their money.

The leak came from the Panama-based Mossack Fonseca, one of the world’s most secretive offshore law firms. The documents were obtained by Sueddeutsche Zeitung, a daily newspaper headquartered in Munich, Germany. Sueddeutsche then shared it with the Washington-based International Consortium of Investigative Journalists (I.C.I.J.) and other major news outlets, including the BBC and the Guardian.

What the papers revealed was extremely alarming.

“The cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars,” the International Consortium of Investigative Journalists said at the time.

And Samoa’s role?

Well, a story titled “Samoan diplomat used to help Fonseca create shell companies” authored by The Guardian journalists, Nick Evershed and Paul Farrell on Monday 4th April 2016, offered us some interesting insights. The story talked about how an officer at Samoa’s High Commission in Australia routinely assisted Mossack Fonseca in creating shell companies, one of them later faced sanctions for supplying goods to the Syrian government and military.

A shell company by the way is an entity that is usually created for business transactions but has limited assets and offers low visibility of the activities it undertakes. It appeals mostly to people who want to avoid tax, launder money or shift funds out of the sight of authorities.

According to The Guardian story, the files show that Mossack Fonseca’s Samoan office appears to have been using the Samoan High Commission in Canberra, to assist it in forwarding documents for the creation of shell companies to other countries, such as the United Arab Emirates and Uruguay.

At the time, the revelations were initially strongly refuted by Samoa’s High Commissioner in Australia, Hinauri Petana.

 “Please note the Samoa high commission does not provide notarisation and legalisation services for companies incorporated in Samoa as this is only done by the Ministry of Foreign Affairs and Trade in Samoa through lawyers that provide notarial services under the relevant laws,” a statement issued then said.

Later however, she confirmed that a request had been received by her office from the United Arab Emirates for apostille, which is a form of legalisation service.

“I advise that Mr. Luciano Fonoti was appointed counsellor to the Samoa high commission and left the high commission at the completion of his term with the high commission in 2013.

 “For the record, the Samoa high commission is required to forward documents for processing only, while notarisation and legalisation of documents are done by our authorities at home.

 “On record, a request for apostille from UAE for Pangates was forwarded by Mr Fonoti as the officer at the time. He was not paid a commission or fee, nor was he involved in any way or the high commission in the way your question inferred.

 “We continue to do the same thing when authorised by our authorities to forward requests. We are not in any way involved with the work of trustee companies. All documents are duly notarised and authenticated by our authorities.”

Ms. Petana at the time did not say who exactly those “authorities” were. But we can probably guess that they were government officials working in Apia. Which places the Government of Samoa right smack in the middle of this scandal.

Keep in mind, we are talking about 2016.

Two years later, the European Union (E.U.) named Samoa as one of the 17 countries on its tax haven “blacklist.”

While it has removed other countries, Samoa remains on that blacklist. A source at the E.U. has since told the Samoa Observer that the Government had failed to follow through on a promise to join a programme stamping out global profit shifting. The E.U. therefore deemed Samoa “non-cooperative” in the fight against tax avoidance and tax evasion.

Closer to home, the Government recently sacked the Chief Executive Officer of the Samoa International Finance Authority (S.I.F.A.), To’oto’oleaava Dr. Fanaafi Aiono-Le Tagaloa. Among other things, Cabinet apparently cited being “embarrassed” about the E.U. blacklist as one of the reasons for their decision.

We find this extremely hard to believe.

But then again, if To’oto’oleaava has been blamed for the E.U. blacklist, who should be blamed for the Panama Papers, Mossack Fonseca and the permanent stain on Samoa’s name that has now truly been immortalised in “The Laundromat.” Who should be sacked for this mess?

It’s almost laughable except this international embarrassment is not funny. It’s shameful.  

 *Information taken from an editorial titled “A stain on Samoa’s name” by the writer published on 11th April 2016.

 

 

 

 

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