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Bank of Portugal to penalise banking institutions

THE BANK of Portugal is to name, blame and punish six of Portugal’s leading financial institutions (four banks and two financial institutions) for squirrelling money out of the country to offshore banks.

The news comes following the conclusion of ‘Operation Hurricane’, in which a number of banking institutions were, last year, raided by tax and ministry of finance squads in conjunction with agents of the Polícia Judiciária (PJ) over alleged fraud, tax evasion and money laundering activities.

In late autumn of last year, the government introduced new laws and penalties for covert financial activities that involved financial dealings aimed at tax avoidance through so-called ‘fiscal havens’.

The Central Department of Punitive Action and Investigation sent its findings to the Bank of Portugal with regard to the alleged irregularities detected in the way the six financial institutions had operated.

The investigating organisation, which was presided over by the Bank of Portugal governor Vítor Constâncio, will apportion blame and penalise, through heavy fines, those institutions used in the transfer of hundreds of millions of euros to offshore institutions, the exact amount of which will only be publicised after the investigations are completed.

The investigations, which were also carried out by the State Procurator General, have already led to the indictment of six lawyers, while it is estimated that the final amount involved in fraud, tax evasion and cooking the books could reach an estimated one billion euros.

The report also said that the consequences of such illegal measures may result in incalculable damage and losses to the state (in terms of taxes) and involve hundreds of suspects up and down the country.