Ukraine president denies wrongdoing in setting up offshore accounts

Ukrainian President Petro Poroshenko and his lawyers shifted into damage control on April 4 in response to the prior day’s release of the Panama Papers, which indicated that Poroshenko set up offshore accounts as a tax haven in the British Virgin Islands in 2014. The company and its subsidiaries had no active assets, conducted no financial operations and were part of a restructured holding company that had the goal of selling the Roshen group, said an April 4 statement released by the Avellum law firm, which was hired by Poroshenko to sell his Roshen confectionary firm.

Moreover, none of the three associated accounts held more than EUR 2,000, reported the BBC, citing a presidential spokesman. A Cyprus subsidiary had the largest share value at EUR 2,000, according to the leaked reporters. “So any allegations of tax evasion are groundless,” said the Avellum statement, which claimed that using a company with a foreign jurisdiction was the only way to move the Roshen company into a blind trust. Poroshenko himself stated on his Facebook page that “I might be the first top official in Ukraine who treats declaring of assets, paying taxes and conflict of interest issues profoundly and seriously, in full compliance with Ukrainian and international private law.”

The report produced by the Organized Crime and Corruption Reporting Project argued that Poroshenko’s may have violated Ukrainian law by starting a new company after becoming president and not reporting the company on his disclosure statements. Two parliamentary factions, Self-Reliance and Oleh Liashko’s Radical Party, called for the creation of an independent investigation commission to investigate the claims.

Zenon Zawada: The offshore accounts look rather innocent when considering how little was deposited and that no activity took place. Most of Ukraine’s politicians have offshore accounts, so this revelation comes as little surprise. Moreover, the possible violations to the law are also relatively minor considering the enormous crimes that occur regularly in the Ukrainian economy. So we expect Poroshenko will weather this scandal, especially considering it’s relatively insignificant when compared to all the other political challenges he faces, and when compared to the numerous other alleged corruption that is alleged in his entourage and the Cabinet.