Ukraine's Poroshenko Caught Up In Panama Papers

This diary’s focus is on Ukraine and its current leader president Poroshenko because he is the poster child for the US to battle oligarchs and corruption ahead of close cooperation with the European Union and the additional $335 million funding the military because NATO membership is still impending. This week the Dutch will vote for Ukraine’s EU Association agreement …

○ Ukraine Referendum: Pulling Wool Over Eyes Dutch Voters
○ Dutch Referendum On Ukraine and Sarah Palin’s Disciples

Poroshenko’s offshore tax plan: Saving his chocolate business as president | Kyiv Post |

When Ukrainian President Petro Poroshenko ran for the top office in 2014, he promised voters he would sell Roshen, Ukraine’s largest candy business, so he could devote his full attention to running the country.

“If I get elected, I will wipe the slate clean and sell the Roshen concern. As president of Ukraine I plan and commit to focus exclusively on welfare of the nation,” Poroshenko told the German newspaper Bild less than two months before the election.

Instead, actions by his financial advisers and Poroshenko himself, who is worth an estimated $858 million, make it appear that the candy magnate was more concerned about his own welfare than his country’s – going so far as to arguably violate the law twice, misrepresent information and deprive his country of badly needed tax dollars during a time of war.

Poroshenko did this by setting up an offshore holding company to move his business to the British Virgin Islands, a notorious offshore jurisdiction often used to hide ownership and evade taxes.

In one of several ironic twists in this story, the news about the president’s offshore comes as the Ukrainian government is actively fighting the use of offshores, which one organization says are costing Ukraine $11.6 billion a year in lost revenues.

Details about the Roshen deal can be found in the Panama Papers, documents obtained from a Panama-based offshore services provider called Mossack Fonseca. The documents were received by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Organized Crime and Corruption Reporting Project.

And in a more painful irony, the Panama Papers reveal that Poroshenko was apparently scrambling to protect his substantial financial assets in the British Virgin Islands at a time when the conflict between Russia and Ukraine had reached its fiercest.

Violation of law?

Poroshenko’s action might be illegal on two counts: he started a new company while president and he did not report the company on his disclosure statements.

According to documents from Mossack Fonseca, on Aug. 4, 2014, George Ioannou, then a senior associate of the law firm Dr. K. Chrysostomides & Co LLC, sent an email to the Mossack Fonseca’s incorporation department asking to register a new company for “a person involved in politics.”

“The company will be the holding company for his business … and will have nothing to do with his political activities,” Ioannou wrote, inquiring whether the registration agent would accept the job.

Seventeen days later, a new company with Ukrainian origins was submitted to the local registry of the British Virgin Islands.

Called Prime Asset Partners Ltd., a name similar to that of Poroshenko’s Ukrainian holding company, it was located in the Akara Building in Tortola, an address used by thousands of offshore companies from around the world. The sole shareholder of the company was Poroshenko with an address in Kyiv. A copy of his passport confirmed that the beneficial owner was indeed the Ukrainian president.

Mossack Fonseca records specify that Prime Asset Partners would serve as the holding company for the Ukrainian and Cyprus companies of Roshen confectionary corporation, with “proceeds from the business trade” of the corporation being its source of funds.