The prime minister of Iceland has resigned – the first major casualty of the Panama Papers leaks which have shed an embarrassing spotlight on the world of offshore finance.
The leaks, from Panama law firm Mossack Fonseca, showed PM Sigmundur Gunnlaugsson owned an offshore company, Wintris, with his wife.
He was accused of concealing millions of dollars’ worth of family assets.
The agriculture minister is to take Mr Gunnlaugsson’s place.
Mr Gunnlaugsson is one of dozens of high-profile global figures caught up in the huge Mossack Fonseca leak.
Pressure for him to quit had intensified since the leaked material was first published on Sunday.
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News of Mr Gunnlaugsson’s resignation came from Agriculture Minister Sigurdur Ingi Johannsson, who announced he would be taking over. Mr Johannsson is deputy leader of the governing Progressive party.
Other Panama Papers reaction
- Pakistan PM Nawaz Sharif orders judicial investigation into allegations of links with offshore companies
- France returns Panama to a list of countries which fail to co-operate over tax evasion
The US Department of Justice is reviewing the leaked documents to look for evidence of corruption that could be prosecuted in the US, the Wall Street Journal reports
Panamanian President Juan Carlos Varela says his government has “zero tolerance” for illicit financial activities and would co-operate vigorously with any judicial investigation in any country
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The so-called Panama Papers leaked from Mossack Fonseca show that Mr Gunnlaugsson and his wife bought Wintris in 2007.
He did not declare an interest in the company when entering parliament in 2009. He sold his 50% of Wintris to his wife, Anna Sigurlaug Palsdottir, for $1 (70p), eight months later.
Mr Gunnlaugsson says no rules were broken and his wife did not benefit financially.
The offshore company was used to invest millions of dollars of inherited money, according to a document signed by Mrs Palsdottir in 2015.
Court records show that Wintris had significant investments in the bonds of three major Icelandic banks that collapsed during the financial crisis which began in 2008.
Some of Icelanders’ anger is believed to stem from the perceived conflict of interest.
The prime minister was involved in negotiations about the banks’ future and had characterised foreign creditors who wanted their money back as “vultures”, while Wintris itself was a creditor.
Mr Gunnlaugsson had kept his wife’s interest in the outcome a secret.
A spokesman for the prime minister said on Monday that Ms Palsdottir had always declared the assets to the tax authorities and that, under parliamentary rules, Mr Gunnlaugsson did not have to declare an interest in Wintris.
Panama Papers – tax havens of the rich and powerful exposed
- Eleven million documents held by the Panama-based law firm Mossack Fonseca have been passed to German newspaper Sueddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists. BBC Panorama is among 107 media organisations – including UK newspaper the Guardian – in 76 countries which have been analysing the documents. The BBC doesn’t know the identity of the source
- They show how the company has helped clients launder money, dodge sanctions and evade tax
- Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing
- Tricks of the trade: How assets are hidden and taxes evaded
- Panama Papers: Full coverage; follow reaction on Twitter using #PanamaPapers; in the BBC News app, follow the tag “Panama Papers”
- Watch Panorama on the BBC iPlayer (UK viewers only)