Royal Bank of Canada defends practices after being named in Panama Papers leak

Royal Bank of Canada taken care of immediately the bank’s name appearing in documents leaked to expose activities in offshore tax havens by stating the Canadian lender has “established controls policies and operations in place” to detect and stop tax evasion.

“We have an extensive due diligence process to ensure we understand who the client is and just what their intentions are, and won’t proceed with a transaction until we do,” Canada’s largest bank by market capitalization said within the statement Monday.

RBC added there are numerous legitimate good reasons to set up a holding company.

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“If we have reason to believe a customer is seeking to commit a legal by evading taxes, we’d report that offence and never do business with the client,” the statement said.

The latest document dump concerns Panama-based law practice Mossack Fonseca, reportedly one of the world’s top creators of shell companies. They are corporations which have no active business or operations, and though they may be employed for legitimate purposes, they are able to also be used to hide asset ownership to be able to evade taxes.

RBC was named alongside other banking institutions in the massive document leak.

According to reports by media given access to the Mossack Fonseca data, RBC and subsidiaries were named in connection with more than 370 registered shell companies.

The bank’s statement said RBC works within the legal and regulatory framework of each and every country in which it operates, and builds internal policies in line with the regulatory requirements of each jurisdiction.

“We make sure our clients have the information they have to properly file their taxes and that we advise them of their obligation to do this,” the statement said, adding that the banks also advises clients to find independent professional tax advice.

In the past few years, regulators around the world have been increasing the requirements of banks to screen clients and prospects for illicit activities including money-laundering.