Royal Bank says it operates within law after leak of Panama Papers

The bank said there are legitimate reasons to set up a holding company

TORONTO – The Royal Bank of Canada says it operates within the law and has policies to prevent tax evasion after reports said it used the Panamanian law firm whose leaked documents are said to reveal the use of offshore tax havens.

The International Consortium of Investigative Journalists worked with hundreds of journalists to analyze 11.5 million records from the law firm Mossack Fonseca.

The records reportedly show major banks helped clients create companies in offshore havens like Panama.

Mossack Fonseca has confirmed the authenticity of the records that hackers obtained.

The firm denies any wrongdoing and says most of the individuals named in the leaked documents were not its direct clients but accounts set up by intermediaries.

The CBC and the Toronto Star, two of the media outlets that the consortium collaborated with, reported that the Royal Bank of Canada and its subsidiaries set up about 370 of these types of corporations.

“RBC works within the legal and regulatory framework of every country in which we operate,” the Royal Bank said in a statement. “Tax evasion is illegal, and we have established controls, policies and procedures in place to detect it and prevent it occurring through RBC.”

The bank said there are legitimate reasons to set up a holding company but if it believes a client intends to commit a criminal offence by evading taxes, it would report that and not serve the client.

The leaked documents reportedly show the offshore dealings of more than 100 politicians and public figures from multiple countries, including Iceland, Ukraine, Pakistan and Russia.

With files from the Associated Press