As world leaders consider what to do about the revelations emerging from the Panama Papers, Liberia's government will be worrying about the fall-out that may cross the Atlantic Ocean from the affair.
The European Union has announced it will be creating a new "tax haven blacklist", to be released by mid 2016. Liberia is likely to be a strong contender for inclusion on this list. Since the late 1940s, the small West African country has been running a tax haven with laws more secretive than Panama's.
Secret companies have been used to hide ill-gotten money from drugs, corruption, and terrorism
According to the current EU website, Liberia is listed as a tax haven by Bulgaria, Greece, Croatia, Latvia, Lithuania, Poland, Portugal, Slovenia and Spain. And while the EU collects information on how its member states view other jurisdictions, it does not engage in any collective action against tax havens.
But now the world's largest trading bloc is threatening sanctions against countries that appear on its list when it is published. The "tax haven blacklist" is the EU's response to the "Panama Papers".
The Panama Papers is a massive leak of documents from Mossack Fonseca, a Panamanian law firm. The leaks, which were published by the International Consortium of Investigative Journalists, showed how the law firm set up secret companies allowing sanctions breakers, senior politicians and others to hide their identities while moving money and accumulating wealth.
The story has been bad news for Panama, dominating global headlines and prompting the head of the Organisation for Economic Co-operation and Development (OECD), Angel Gurria, to say there would be "consequences" for Panama if it did not clean up its act.
Liberia's secret offshore companies made an appearance in the Panama Papers, when a secret Liberian company connected to the family of Pakistan Prime Minister Nawaz Sharif was used to move funds. In that case, however, there was no evidence of any wrongdoing on the part of Sharif's family.
While Panama is found near the top of international rankings of financial secrecy, Liberia is one of a handful of countries that ranks even higher. Under the Tax Justice Network's Financial Secrecy Index, Liberia had a secrecy score of 83 out of a maximum of 100. Panama scores 72.
Liberia is also one of the few countries in the world that has not made it past the first phase of the OECD's Global Forum for Tax and Transparency peer review process. This OECD-led initiative examines the legal systems of each member country and assesses them against international tax and transparency standards.
For a few hundred dollars, and in a matter of hours online, anyone in the world can set up a tax-free Liberian company that offers total anonymity to its owner. Such anonymity allows individuals to hide their assets from tax and law enforcement agencies.
"Secret companies have been used to hide ill-gotten money from drugs, corruption, and terrorism," Jonathan Gant, a campaigner for Global Witness, a leading global anti-corruption group with a long history in Liberia, said. "It would be very damaging to Liberia's hard-won reputation for transparency if it was shown the country is harboring secret companies."
Binyah C. Kesselly spoke to us in February, before the release of revelations over the Panama Papers. At the time, he was the commissioner of the Liberian Maritime Authority, which has oversight of Liberia's offshore corporate registry.
He said he expected Liberia to be removed from the current European list once the country had ratified its tax information exchange treaty with Poland, which it signed in 2013. Kesselley added the Liberian government was taking active steps to improve compliance ahead of a review by the OECD later this year.
"Liberia currently has draft amendments in the Legislature in support of the recommendations made in its peer review report ... These amendments are expected to improve compliance with regards to ownership information and fully comply with recommendations for accounting records. The amendments are expected to pass into law early next year," he said.
Liberian President Ellen Johnson Sirleaf has sought to make improvements in governance and transparency a hallmark of her presidency. However, as the world begins to take a closer look at the activities of tax havens, Liberia and Sirleaf face some potentially serious reputational issues if the country is black-listed by the EU later this year.
*Liberian journalist's identity is concealed to protect his publication from reprisals. This story was produced in collaboration with the Thomson Reuters Foundation, Finance Uncovered and New Narratives. It is part of the Foundation's pan-African scheme Wealth of Nations.