Arlette Ricci, heiress of the French perfume giant Nina Ricci, has been sentenced to a year in prison and two years of probation, as well as fined more than $4 million, for tax evasion by a French court.
She is the first person convicted in the so-called Falciani scandal, which is a list of clients of HSBC bank who used offshore accounts, including ones in Panama, to evade taxes. The list was leaked by an employee of the bank named Herve Falciani. She is the first of 50 defendants expected to be tried in the case.
The incident has revealed tax evasion in Europe that is estimated at more than $120 billion.
French investigators proved that Ricci withheld more than $22 million from the French Treasury by using encrypted accounts and offshore companies in Panama.
The scandal, in part, has led to a greater examination of the country's financial services sector, and it has been included on a grey list compiled by the Financial Action Group (FATF) due to its lack of controls for the prevention of money laundering and the financing of terrorism.
It is unlikely that Panama will exit the list this year, as many of the changes demanded by the FATF are still being debated. Other countries have taken an average of three years to approve the necessary regulations to ensure proper implementation of the changes.
The Organization for Security and Cooperation in Europe has also condemned Panama for its lack of transparency and failings in the exchange of tax information after examining its regulatory scheme and comparing it with international standards.