[PANAMA CITY] Panama said on Wednesday it would form an independent commission to review the country's financial practices following the leak of information from a local law firm that has embarrassed a clutch of world leaders.

"The Panamanian government, via our foreign ministry, will create an independent commission of domestic and international experts ... to evaluate our current practices and propose the adoption of measures that we will share with other countries of the world to strengthen the transparency of the financial and legal systems," President Juan Carlos Varela said in a televised address.

Governments across the world have begun investigating possible financial wrongdoing by the rich and powerful after the leak of more than 11.5 million documents, dubbed the "Panama Papers," from the Panamanian law firm Mossack Fonseca.

In his brief statement, Mr Varela reiterated Panama would work with other countries over the leak, which was published in an investigation by the US-based International Consortium of Investigative Journalists and various news organizations.

In an apparent sideswipe at the media, he said: "Serious and responsible governments don't negotiate the adoption of international obligations via the media, we do it via diplomacy and serious, responsible and constructive dialogue."

The papers have revealed financial arrangements of prominent figures, including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain and Pakistan and Chinese President Xi Jinping, as well as Ukraine's president.

Panama's finance minister, Dulcidio De La Guardia, who admitted the scandal has damaged Panama's reputation, said the country was still discussing who would be on the commission.

Offshore entities, of themselves, are not illegal. But they can be used to launder money or hide assets from tax authorities in other countries.

REUTERS

For more coverage of the Panama Papers, visit bt.sg/panama_papers