Ernesto has been with the firm for more than 25 years and has consistently delivered outstanding results for our clients.

We would like our readers to get to know you. Please tell us about yourself and your career.

1. I am a Certified Public Accountant. I graduated from the University of Panamá. I have an MBA with a concentration in Finance. I have devoted myself to accounting since I was twenty. Before joining Mossack Fonseca & Co., I worked for various auditing firms, including Peat Marwick which today is KPMG. I began at Mossack Fonseca & Co. as an external auditor, and subsequently became part of a team monitoring and providing advice to the accounting department. I also spent one year as a consultant. Later, I began working in the accounting department.

How many years have you been with MF?

2. I have been with the firm for 25 years. The previous position I had was as Group Controller, and then came a series of restructuring steps and the idea to have a business unit to provide Accounting Services. The Accounting Services unit was primarily formed to provide services to companies which today are requesting accounting records. We now have two years in operation. In the first year of the organization, I created the company, and established the required policies and regulations. The business unit is called International Accounting Services Associates. The business unit is duly registered with the Technical Board of Accounting of the Ministry of Trade and Industry. We are CPAs who are regulated by the government and authorized to provide all types of accounting and auditing services.

What are the main provisions of Law 47?

3. Law 47 basically was created to regulate this little phrase that we now call “Know Your Client”, mostly involving financial structures. Initially, when Mossack Fonseca & Co. was established we already had a department called compliance. As CPAs, within the accounting business unit, we have relied on support from the compliance department so that the rules of Law 47 are met, but really the main regularization is Law 23 of 2015 created in the month of April; this law provides that certain professions are regulated, including CPA’s (who previously were not regulated). However, the Superintendency of Banks and the Superintendency of Securities of Panamá already anticipated and promulgated certain regulations for the institutions that they oversee. Mossack Fonseca & Co. is the Trustee service of that regularization. Law 23, which is complementary to the amendment of Law 47, brings new requirements and regulations not only for the compliance department, but also for various professions. Additionally, it gives you the opportunity to know the financial law that applies to your client, and also creates a new law for the non-financial (Professionals) and financial (Banks, Securities Exchange, etc.) watchdogs governed under this law. The law also makes mention of those people who, merely by family relationship, can make a person deemed “politically exposed”, and therefore subject to restrictions under the law. The family relationships that make a person politically exposed include cousins, nephews, nieces, and others. The law also requires that professional service providers be aware of all relevant financial transactions.

Why do MF clients need accounting services to comply with the new law?

4. First, some background information. Mossack Fonseca customers need this service because many years ago in the US the OFAC (Office of Foreign Assets Control) was created to regulate foreign assets in many jurisdictions where Mossack Fonseca & Co S.A. does business, such as BVI, Bahamas, and others. Since Mossack Fonseca & Co S.A. offers the service of incorporation, it is, under the law, required to keep all accounting files and thus be aware of the financial situation of each company. In theory, when a client requests incorporation of a company they do so in order to carry out some activity. The nature of the activity can be wide-ranging, such as to hold real estate or an investment portfolio. In any case, under the law, they must keep accounting records. Clients should be aware of the accounting requirements in order to use their company in accordance with the laws governing such entities. Today, in several jurisdictions (BVI, Bahamas, etc.) they already have audit institutions (Financial Services Commissions), which regulate financial institutions and oversee the activities of companies. Even if a company has diverse operations, the director is the person who must have knowledge and control of the financial situation, and indeed has ultimate responsibility for the company.

What are the Benefits to the client of using MF?

5. For clients, one of the biggest benefits of using Mossack Fonseca & CO., is our confidentiality; we have an integrated professional team where one will be coupled with both the legal and financial departments, and will benefit from our extensive experience in all aspects of legal and financial matters.

How has MF Accounting Services prepared to comply with the new law?

6. We have put into place policies and procedures to ensure 100% compliance with the new law. In addition, we are always up to date on legal and regulatory changes. Our team of lawyers and accountants are well informed via their many different affiliations with government and peer organizations.

What recommendations do you have for MF clients to help them prepare for the change?

7. We have informed our clients of the new requirements, advised them on what they need to do, and let them know that we can handle all of their accounting matters. In general, people should be prepared for the change as we are. We constantly update our clients on all relevant changes and provide the advice they need to comply with such changes. We are proud to be able to provide our clients with the security and confidence of knowing that we will provide them with the very best service in the industry.