Panama Papers reveal Hong Kong's murky financial underbelly

Yahoo – AFP, Caroline Henshaw, April 14, 2016

The Panama Papers have exposed the key role played by Hong Kong and
Singapore in funnelling wealth into tax havens (AFP Photo/Anthony Wallace)

Hong Kong (AFP) - Jasmine Li was still a student when she opened her first offshore bank account through Mossack Fonseca Hong Kong, but the shady world she entered that day had been part of the city's underbelly for decades.

The granddaughter of China's then fourth-ranked politician was among dozens named in a vast cache of documents leaked from the Panama law firm that have given a glimpse into how the rich and powerful hide their money.

But the so-called Panama Papers, released by the International Consortium of Investigative Journalists this month, have also exposed the key role played by Hong Kong and Singapore in funnelling that wealth into tax havens.

More than 16,300 of Panamanian law 

firm Mossack Fonseca's active shell 

companies were incorporated through its

 Hong Kong and China offices (AFP

Photo/Johannes Eisele)

Mossack Fonseca's Hong Kong offices were their busiest in the world, the ICIJ analysis showed, setting up thousands of shell companies including some linked to China's top political brass, the city's richest man, Li Ka-shing, and movie star Jackie Chan.

Experts say the Asian financial hubs have already channelled billions into tax havens, and the Boston Consulting Group predicts they will be the world's fastest-growing offshore centres over the next five years.

"Hong Kong is set up to make it easy for people to do business, and it is very easy to do business here," said Douglas Clark, a barrister with one of Hong Kong's largest chambers.

"But when it's easy to do business then it's easy to do any type of business, legal or illegal."

Offshore companies are not necessarily illegal, but they operate on the fringes of what is allowed and their opaque structures make it easy to conceal ill-gotten or politically inconvenient wealth.

They have proved a boon for Hong Kong and Singapore, which are known not only for their financial expertise but also light-touch regulation, discretion and non-cooperation with foreign tax authorities.

Both are already on regulators' radars -- the EU briefly added Hong Kong to its tax blacklist last year -- but experts say they are unlikely to do anything to jeopardise the lucrative offshore business.

'Turning a blind eye'

Domiciling offshore has a long history in the region. In 1984, then trading house Jardine, Matheson & Co, one of the most powerful companies in Hong Kong's colonial history, relocated to Bermuda citing concerns about the city's handover to China.

"Hong Kong's history as a financial centre that specialises in turning a blind eye to things that would be investigated elsewhere goes right back to the 1960s," said financial commentator Tom Holland.

A company name plate is displayed next to the entrance of Mossack 

Fonseca & Co. (Asia) Limited in Hong Kong, China April 5, 2016. Reuters/Bobby Yip

Today, Chinese investors use offshore companies legally in Hong Kong to bypass red tape, take advantage of tax breaks for foreign investors and circumvent strict capital controls.

Hong Kong University law professor Douglas Arner said it has become "perfectly normal" for companies to park money from overseas operations offshore, as the city does not tax profits made elsewhere.

But their widespread use has earned Hong Kong and Singapore reputations for murky dealings, and the Tax Justice Network ranked them among the least transparent places in the world in last year's financial secrecy index.

In Singapore, seen as more rigorous in policing its financial sector, the TJN said a culture has evolved of enforcing the law domestically but tolerating the illicit money that flows in from crimes committed overseas.

"Singapore is not only a secrecy jurisdiction... but also a tax haven, providing numerous tax avoidance and evasion opportunities," the group said in its profile of the city state.

'They'll find snakes'

Clark said criminals, drug dealers, email scammers and corrupt Chinese officials have turned to Hong Kong to try to hide their money offshore.

But even when used legally, offshore companies can make it harder to sniff out crime.

Local shareholder activist David Webb said three-quarters of companies listed in Hong Kong are incorporated in the Cayman Islands or Bermuda.

More than 500 banks, their subsidiaries and branches have worked with Mossack

 Fonseca since the 1970s to help clients manage offshore companies (AFP Photo/

Niklas Halle'n)

Webb also noted that stock exchange rules do not require listed companies to say who owns any British Virgin Islands companies they make acquisitions from, thereby fostering fraud and corruption.

"I don't think there is any appetite in the stock exchange to look under that particular rock, because they'll find snakes if they do," he said. "They see tighter regulation as a problem."

An exchange spokesman said all companies have to comply with the law and exchange rules, and those incorporated in China and Hong Kong count for more than half of the exchange's market capitalisation.

Despite the controversy, few expect authorities in Hong Kong or Singapore to change their regulations surrounding offshore dealings any time soon given how lucrative the industry is.

And, because the cities' own laws haven't been broken, experts say even international efforts to stop tax cheats are unlikely to make any difference.

"If anything, this is going to make people even more careful when they set up offshore holdings," said Clark.

"People will make sure investments are structured in such a way that if they are ever revealed, you won't be in trouble."

Hong Kong authorities said they were aware of the Panama Papers allegations. Singapore's monetary authority said it was investigating and "will not hesitate to take firm action" against wrongdoers.

#NEWSGRAPHIC #PanamaPapers highlight Hong Kong's extensive offshore banking connections pic.twitter.com/aftCv6twN1

— AFP news agency (@AFP) April 14, 2016

The Tax Justice Network's Financial Secrecy Index (AFP Photo/Alain

Bommenel, Jean Michel Cornu)

Related Articles:

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Switzerland, Singapore join clampdown on bank secrecy (Update)

Myanmar court frees student activists after Suu Kyi pledge

Yahoo – AFP, Hla-Hla Htay,April 8, 2016

Newly-released political student protesters and family members reunite in Myanmar
on April 8, 2016 after a court freed dozens of activists (AFP Photo/Ye Aung Thu)

A Myanmar court on Friday freed dozens of jailed students, in the first wave of detainee releases after Aung San Suu Kyi pledged to make freeing activists and political prisoners a priority of her new government.

There were jubilant scenes at the sweltering central Myanmar courthouse in Tharrawaddy, as a judge told the young activists they could go home more than a year after they were arrested over an education protest that was violently crushed by police in March 2015.

Tearful parents gripped their children in emotional scenes before hurrying to the nearby prison to collect the detainees' belongings.

National League for Democracy (NLD) 

party leader Aung San Suu Kyi arrives

 at the Union Parliament in Naypyitaw, 

Myanmar March 15, 2016. REUTERS/

Soe Zeya Tun

"Our release showed that we didn't commit any crime," Ei Thinzar Maung, 20, told AFP after her release.

"We suffered in prison for more than one year. We are happy but we want the new government to release all political prisoners immediately."

Cases were cancelled against some 70 student protesters, although three remain in jail pending other charges.

A further dozen students will have to wait until their next scheduled hearing to find out whether they will be freed.

Myanmar has scores of political prisoners languishing in its jails and hundreds of detained activists awaiting trial, despite reforms in recent years as the military loosened its grip on power following half a century of repressive rule.

Suu Kyi had on Thursday said she would prioritise releasing activists -- an issue laden with significance for herself and scores of MPs in her party once jailed for democracy activism during the junta era.

Late Friday, she released a second statement seeking to reassure that the remaining student cases would be resolved after Myanmar’s nearly two-week New Year holiday which starts on Monday.

It added that political prisoners and jailed activists would also be freed, but that “necessary scrutinisation” would need to be completed before they could be released.

Routine jailing

Court officials said they began preparing to release the students shortly after Suu Kyi's statement, which said her government would try to free detainees still on trial by asking the state prosecutor to drop the charges.

Myanmar student protest leader Min Thawe Thit (centre) is greeted by relatives

as he arrives for his trial in Tharrawaddy, on April 8, 2016 (AFP Photo/Ye Aung Thu)

Those gathered in Tharrawaddy's dusty courtroom erupted into cheers and song after the judge delivered his statement, while dozens of police looked on.

Some students stopped at a cemetery to pay their respects to the graves of other activists who died in the country's decades-long democracy struggle.

No other political prisoners were confirmed as released on Friday, though scores of other detainees were freed from prisons around the country because their sentences were due to end during the upcoming Buddhist new year holiday.

Human Rights Watch welcomed the students' release, but urged Suu Kyi and her National League for Democracy (NLD) party to amend the laws used to imprison peaceful protesters.

"They have to release political prisoners but they also have to do away with these rights-abusing laws. The NLD has an absolute majority in both houses of the national assembly. They can do this," said Phil Robertson, HRW's deputy Asia director.

The routine jailing of dissidents was one of the former junta's most egregious acts, sparking international outcry and support for Suu Kyi's pro-democracy movement.

Relatives check lists of prisoners due for release at Insein prison in Yangon

on April 8, 2016 (AFP Photo/Romeo Gacad)

Suu Kyi herself spent about 15 years under house arrest and more than 100 current National League for Democracy lawmakers served time in the country's notorious prisons.

The quasi-civilian government that replaced the junta in 2011 freed hundreds of political detainees, but it also oversaw the detention of scores more, particularly those involved in land and education protests.

Prior to Friday there were about 121 political prisoners held in Myanmar's jails and a further 414 awaiting trial, according to the Assistance Association for Political Prisoners.

The majority were arrested before last November's landmark elections, which Suu Kyi's NLD won in a landslide.

Suu Kyi made the prisoner release announcement in her broadly defined new position of state counsellor, which she was given despite vehement opposition from the still-powerful military whose charter bars her from the presidency.

Why few Americans appear in the Panama Papers

Yahoo –AFP, Jeremy Tordjman, April 8, 2016

Issues of the German daily "Sueddeutsche Zeitung" featuring the "Panama Papers"
 with illustrations by German artist Peter M Hoffmann depicting heads of state
(AFP Photo/Christof Stache)

Washington (AFP) - From Russia to China, and Britain to Iceland, the revelations of the "Panama Papers" have tarnished officials and the wealthy over the implication that they hide riches offshore.

But one group is not there: prominent Americans. US tycoons and politicians are notably absent in the leaked files of the Panama law offices of Mossack Fonseca, which created thousands of shell companies worldwide to hide the identities of their ultimate owners, some of whom may have been evading taxes.

There is Hollywood mogul David Geffen, the Asylum Records and Dreamworks SKG co-founder. But there are no Americans comparable to Iceland's prime minister, or henchmen of the Russian president -- all in the Panama records -- at least in what has been disclosed so far.

"There are a lot of Americans, but they are more like private citizens," said Marina Walker Guevara, deputy director of the International Consortium of Investigative Journalists which coordinated the investigation and release of the Panama Papers.

However, that hardly means Americans have fully embraced financial transparency, she told AFP.

"It doesn't show that the US is outside of the offshore system; the US is actually a big player."

The Tax Justice Network's Financial Secrecy Index (AFP Photo/Alain

Bommenel, Jean Michel Cornu)

Other options

One possible reason for their small presence in the Panama documents is that US citizens hoping to hide funds and activities offshore were not drawn to Spanish-speaking Panama as a haven, when there are options like the British Virgin islands and the Cayman Islands.

"Americans have so many tax havens to choose from," said Nicholas Shaxson, author of "Treasure Islands: Tax Havens and the Men who Stole the World," a 2011 book on secretive centers for hiding money.

Indeed, Americans do not have to go abroad to hide funds and activities behind anonymous corporations: they can create them at home.

States like Delaware and Wyoming allow the creation of such companies, for just a few hundred dollars, that conceal their ultimate financial beneficiary.

And while US banks are normally required to "know their customers," they can bypass that rule and open accounts for shell companies, ensuring total discretion for someone who wants to move money around quietly.

The US Treasury is moving to stop the practice, which can be used by arms and drug traffickers to launder funds and lands the United States in third in the Tax Justice Network's ranking of the world's least transparent countries, well above Panama.

"We're in the last stages of drafting the final rule," a Treasury official told AFP.

The most popular tax havens (AFP Photo/Laurence Saubadu, Jonathan Jacobsen)

'Very frightened'

But there is another possible reason that Americans are not so visible in the Panama Papers.

Spurred by the need to halt huge, blatant tax evasion by Americans using foreign banks, Washington in recent years has cracked down with lawsuits, arrests and tighter laws that have targeted both the banks offering safe haven and those hiding money in them.

Swiss banks were hit in particular. UBS and Credit Suisse, respectively, had to pay fines of $780 million and $2.6 billion for having helped US citizens hide money.

The result, Shaxson said, is that now "there are a few tax havens around the world that are very frightened of American clients, because they know that the US can hit them."

Nevertheless, the seeming absence of Americans from the Panama Papers has fed conspiracy theories, such as claims the leak of the files was orchestrated by the CIA to destabilize Russia and other countries.

But Walker Guevara said there is still a lot to be examined in the trove of 11.5 million documents that make up the Panama Papers, and there could be more about Americans in there.

"It's a huge trove of documents and maybe there's something hiding there that we haven't found yet. It's a work in progress."

"@USTreasury has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes" —@POTUS

— The White House (@WhiteHouse) April 5, 2016

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New prime minister rounds out Vietnam's leadership trio

Vietnam's National Assembly has confirmed a new prime minister. Nguyen Xuan Phuc vowed to improve the investment environment, fight corruption and protect the communist nation's sovereignty.

Deutsche Welle, 7 April 2016

Nguyen Xuan Phuc took over as Vietnam's prime minister after being confirmed to the post by lawmakers on Thursday. The only candidate nominated for the job, he won 90 percent of votes in the National Assembly.

"I will do my best to serve the country and people," the 61-year-old said after the vote, according to state-run VTV.

Vietnam is run by the Communist Party and officially led by the trio of party secretary general, president and prime minister. Key policy decisions are made by the country's 19-member politburo.

Nguyen Phu Trong was re-elected as secretary general in January, and Tran Dai Quang, a former police general, won lawmakers' approval to take over the president's office on Saturday.

Former Prime Minister Nguyen Tan Dung, a charismatic reformist seen to have pushed a pro-business agenda, stepped down on Wednesday after losing an internal party election. Critics blamed him for corruption and inefficiency in the state-run sector.

Experts expect more of the same

Phuc, who served as the deputy prime minister since 2011, said Vietnam would maintain its "socialist-orientated" economy. Few expect the new prime minister to institute any major policy changes during his five-year term.

"Phuc certainly will be lower key than the hard-charging Dung," said Murray Hiebert, a Southeast Asia specialist at Washington's Center for Strategic and International Studies, told Reuters news agency. "We should expect him to operate within the consensus of the ruling politburo."

In a televised speech, Phuc vowed to continue with reforms and fight corruption and promised to "firmly defend the country's independence, sovereignty and territorial integrity."

Complicated international ties

Vietnam is currently struggling with public debt, a serious budget deficit, China's territorial claims in the South China Sea and drought and salt intrusion in the country's main rice-growing region of the southern Mekong Delta.

"[Phuc] will have to overcome major challenges to reform the state-owned sector and banking system, improve the country's fiscal position, and strengthen the private sector to make the economy less dependent on foreign investments," Le Hong Hiep, a visiting fellow at Singapore's Institute of Southeast Asian Studies, told The Associated Press.

Human rights groups and the United States have often criticized Vietnam's vague national security laws for jailing people who peacefully express their views. Hanoi has said only criminals are punished.

The sentencing of seven bloggers and activists in March for "abusing democratic freedoms" and "spreading anti-state propaganda" drew strong opposition from Washington and international rights groups.

sms/msh (AP, dpa, Reuters, AFP)

China restricts North Korea exports

Yahoo - AFP News, April 5, 2016

Existing UN sanctions ban North Korea from conducting any ballistic missile tests

China on Tuesday imposed restrictions on imports of North Korean coal and iron, Beijing's commerce ministry said, in line with United Nations sanctions on the country following its nuclear and missile tests.

The coal trade between the neighbours was worth $1 billion last year, Chinese Customs figures show, but the announcement allowed for trade to continue if the proceeds were for livelihood purposes.

The move also put in place bans on the import of gold, titanium and rare earth metals from the North, as well as some sales of aviation fuel to it, in line with the UN Security Council measures.

China accounts for more than 90 percent of 

North Korea's $7.61 billion in total trade, 

with the Sino-Korean Friendship Bridge 

serving as one of the main border

crossings between the two countries

The council approved the measures in March, in the wake of a fourth atomic test by Pyongyang, and Beijing pledged strictly to implement them.

But the resolution's language -- concluded after seven weeks of hard negotiations between Washington and Beijing -- left significant loopholes for Pyongyang's key economic supporter to continue business as usual.

China is the North's main provider of trade and aid and the text allowed for commerce in certain goods, including coal and iron, to carry on as long as the proceeds did not support Pyongyang's nuclear ambitions.

The UN did not set criteria for making that determination, leaving each country to make its own decision.

The exceptions were mirrored in the text of the statement by China's commerce ministry, which also provided a letter for companies to sign "solemnly" pledging that their imports of the products were "not related to North Korea's nuclear programme or ballistic missile programme".

Aviation fuel sales could also be permitted for humanitarian and some civil aviation purposes.

Trade with China is crucial for the isolated and impoverished North, which has suffered regular food shortages and an outright famine in the mid-1990s.

North Korea exported a $1 billion 

worth of coal to China in 2015

In 2014 China accounted for more than 90 percent of North Korea's $7.61 billion in total trade, according to the latest available figures from South Korea’s state-run Korea Trade-Investment Promotion Agency.

Washington has long held that changing North Korea's behaviour depends on China's willingness to use its economic leverage.

But Beijing has resisted targeting Pyongyang's fragile economy for fear of provoking the regime's collapse, potentially leading to a flood of cross-border refugees and ultimately the prospect of US troops stationed on its border in a reunified Korea.

That stance has become harder and harder to maintain, as Pyongyang has continued to defy both the international community and Beijing's efforts to restrain it.

In recent weeks North Korea has repeatedly fired projectiles into the East Sea.

The latest fit of pique followed a meeting last week between US President Barack Obama and his Chinese counterpart Xi Jinping, where they agreed to fully implement sanctions against Pyongyang.

US President Barack Obama (L) speaks during a bilateral meeting with China's 

President Xi Jinping on the sidelines of the Nuclear Security Summit in Washington, DC

The leader was in Washington for a two-day nuclear security summit being hosted by Obama, at which the American president also discussed North Korea's nuclear threat with Japan and South Korea.

Related Article:

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Pakistan PM's family hit back after Panama Papers leak

Yahoo - AFP, April 4, 2016

Pakistani Prime Minister Nawaz Sharif has been in power since 2013 (AFP Photo)

The family of Pakistani Prime Minister Nawaz Sharif Monday defended their ownership of offshore companies after they were named in the Panama Papers, one of the biggest media leaks in history.

Revenue generation is particularly sensitive for Pakistan's government, which is receiving a $6.6 billion bailout package from the IMF and has a tax-to-GDP ratio of 11 percent, among the lowest in the world.

The daughter of Pakistan's Prime 

Minister Nawaz Sharif, Maryam Nawaz (R), 

pictured with her mother Kulsoom Nawaz 

in 2013, is reported to own London real 

estate through offshore companies

 (AFP Photo/Arif Ali)

The leak, comprising 11.5 million documents from Panama-based law firm Mossack Fonseca, shows how some of the world's most powerful people have secreted their money offshore.

Among those named are three of Sharif's four children -- daughter Maryam, who has been tipped to be his political successor, and sons Hasan and Hussain -- with the records showing they owned London real estate through offshore companies administered by the firm.

"Nawaz Sharif does not own any company but having companies in the name of his children also raises questions," Umar Cheema of the Center for Investigative Reporting in Pakistan, told AFP.

The centre is partnered with the Investigative Consortium of Independent Journalists, which spent months poring over the documents before Sunday's online release.

"There are more than 200 Pakistanis which our report has identified, and they include lawyers, lawmakers and some people from the judiciary," Cheema said.

Opposition leader Imran Khan called for action against Sharif.

"Our stance vindicated again as Sharif's wealth stashed abroad exposed," he tweeted, adding the country's accountability watchdog, tax authorities and election commission must take action.

But Sharif's son Hussain told the country's largest private broadcaster Geo his family had done "nothing wrong".

"Those apartments are ours and those offshore companies are also ours," he said.

"There is nothing wrong with it and I have never concealed them, nor do I need to do that.

"It is according to British law and laws of other countries that it is a legal way to avoid unnecessary tax via offshore companies."

Hussain said he left Pakistan in 1992 and therefore is not resident, adding Pakistani tax law "says that if you are not staying in Pakistan for more than 138 days, then you are not required to declare your assets".

"We voluntarily present ourselves before it or any other judicial and investigative institution in Pakistan," he said in response to Khan's call for the National Accountability Bureau to investigate.

Several world leaders, including Saudi King Salman bin Abdulaziz, the prime 

minister of Pakistan and the children of the president of Azerbaijan, also control

 offshore companies (AFP Photo)

Low tax collection

A spokesman for Sharif family late Monday responded to the media reports, saying "Panama leaks and ICIJ have made no allegations of wrongdoing against Sharif family,".

"None of the corporations mentioned are owned or run by Mr Nawaz Sharif, the prime minister of Pakistan," the spokesman said in a statement, which was shared by Maryam on her Twitter account.

The statement said Maryam Nawaz "is merely a trustee of one of the corporations owned by Mr Hussain Nawaz, which would only entitle her to distribute the assets to Mr Hussain Nawaz's family if required".

As prime minister, Sharif has invited investment in Pakistan. But the latest revelations could raise uncomfortable questions about why his family has kept their wealth abroad.

A report commissioned by Britain's Department for International Development last year said Pakistan's economy was facing an "existential crisis" stemming from its woeful tax collection rates and inability to finance itself.

Ali Nadir, a financial analyst, said the use of offshore companies was in some cases legitimate.

But he added: "I believe political and business leaders will be hard-pressed to take the privacy defence given the worldwide move towards a better track of money, tax evasion, laundering and corruption.

"This may also start more locally focused probes as there are likely to be disclosure issues."

The Panama Papers have whipped up a storm of controversy over offshore wealth, ensnaring political leaders, sports figures and underworld members across the globe in the scandal.

'Panama Papers' law firm under the media's lenses https://t.co/m8gCZ9ZGz5 pic.twitter.com/2wNv9zcKuz

— AFP news agency (@AFP) April 4, 2016

The Panama Papers: key facts on the huge journalists' investigation into tax 

evasion (AFP Photo/Thomas Saint-Cricq, Philippe Mouche)

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All child asylum seekers freed from mainland Australian detention

The last child has been removed from immigration detention on the mainland, Australian authorities announced. However, others are still being held on a remote Pacific island.

Deutsche Welle, 3 April 2016

The government made the announcement on Sunday, saying the children have been moved to what's called "community detention," where processed refugees can live freely among the community.

"It's always been a goal of the immigration minister ... to get kids out of detention," Prime Minister Malcolm Turnbull told Sky News.

Turnbull also said that since the change from the Labor government in 2013, the arrival of asylum-seekers in Australia has significantly declined.

Child refugees on the Pacific
island of Nauru

Fierce criticism

Australia's migration policies have drawn sharp criticism from activists, with much of the attention focusing on the detention center on the Pacific island nation of Nauru, which is known for its harsh conditions.

Under Canberra's immigration policy, refugees who try to reach Australia by sea are turned back or sent to Pacific camps in Nauru or Papua New Guinea, where they are held indefinitely while waiting for their asylum applications to be processed. The government action announced Sunday did not impact the dozens of child asylum seekers purportedly still living on Nauru.

Rikki Lambert, a political adviser and current state senate candidate for the Family First Party, told DW in an email that he approved the move to release the children.

"Family First is very pleased with the release of the last child from detention," Lambert wrote. "We have been calling for it for two years. Our first priority was secure borders, as insecure borders saw thousands of children in detention under Labor. Now there are none."

In February, the 1-year-old child of an asylum-seeker became a focal point of activists when a hospital refused to discharge her in order to prevent her return to Nauru. The government has said it would not immediately send the child to the island.

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Australia doctors demand children be freed from immigration detention

Australia doctors demand children be freed from #immigration detention http://t.co/oSHkZyvn5V pic.twitter.com/s9yLBKHA2Z

— AFP news agency (@AFP) October 12, 2015

Nauru opens gates at refugee detention center




Migrant crisis will make Germany stronger: refugee coordinator
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UN Security Council approves EU anti-trafficking mission


"The New Human P1" - Sep 19-20, 2015 (Kryon Channelling by Lee Carroll)
"Return of the Masters" - Apr 11-12, 2015 (Kryon Channelling by Lee Carroll)

Vietnam names first chairwoman of National Assembly

Yahoo – AFP, March 31, 2016

Vietnam's newly elected National Assembly's Chairwoman Nguyen Thi Kim Ngan,
61, is sworn in during a ceremony at the parliament house in Hanoi, on March 31,
2016 (AFP Photo)

Communist Vietnam named a woman for the first time to the influential role of chairperson in its rubber stamp National Assembly Thursday -- the country's fourth most powerful position -- state media said.

Veteran lawmaker and senior Communist Party official Nguyen Thi Kim Ngan was elected with 95.5 percent of votes after a poll in the country's 500-strong legislative body early Thursday, state-run VTV said.

"I would like to thank the National Assembly for electing me," Ngan said after the ballot, which was broadcast on VTV.

Nguyen Thi Kim Ngan, new chairperson

 of Vietnam's rubber stamp National 

Assembly, is the highest ranking female

party official (AFP Photo/Minh Hoang)

"I vow my resolute loyalty to the nation, the people, and the constitution," Ngan, who is from southern Ben Tre province, added.

Ngan, 61, was selected for the National Assembly chair position in January during the five-yearly Communist Party Congress, which was this year overshadowed by factional fighting.

No other candidates were on the ballot paper and some 472 out of the 484 lawmakers present on voted in her favour, VTV said.

Her appointment means she is the highest ranking female party official.

The majority of Communist Party officials are men, but women are reasonably well represented in the ranks, with around 25 percent of National Assembly delegates being female.

Vietnam is in the midst of a leadership handover after the country's top communist leader, Nguyen Phu Trong, was reelected as party secretary general in January in a victory for the party's old guard.

Reformist Prime Minister Nguyen Tan Dung lost out in internal party elections and is due to step down next week, when the National Assembly will vote on his replacement.

This is expected to be Nguyen Xuan Phuc, currently a deputy prime minister, state media said.

On Saturday, the National Assembly will also elect a new president, expected to be Tran Dai Quang, a police general who rose through the ranks within the country's powerful Ministry of Public Security.

Political analyst Pham Chi Dung told AFP that Ngan's election as National Assembly chair was a strategic choice by the party to ensure a power balance between the country's key regions.

"It's no breakthrough," for gender equality, he said. "Ngan is from (Vietnam's) south and has support from (party secretary) Trong and (Prime Minister) Dung," he said.

Only a handful of the 19-member politburo, including Ngan, are from the country's south, analyst Dung said.

Vietnam fought a bitter decades long war pitting the communist north over the US-backed southern regime, which ended with a communist victory and reunification in 1975.

The ruling Communist Party strives to ensure a power balance between the key northern, central, and southern regions, often dividing top political appointments along geographical lines.

In the past, the leadership handover is decided in at the party congress and takes up to six months to be confirmed by the National Assembly.

Analysts say this year things have moved more quickly, partly because several top leaders are retiring from politics, and also because of an upcoming visit by US President Barack Obama in May.