The logo of Mossack Fonseca law firm

The Financial Conduct Authority (FCA) has sent a letter to banks and financial institutions in the UK ordering them to check whether they have done business with the law firm Mossack Fonseca, which is at the centre of the Panama Papers scandal.

The leak of financial papers and emails, which were obtained by the German daily newspaper Süddeutsche Zeitung and passed on to International Consortium of Investigative Journalists, was the biggest in history with more than 11.5 million individual files released.

The FCA letter, which was sent to around 20 businesses, instructed institutions to carry out their own investigations into their links to the Panama Papers and report back by next week.

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“Beyond April 15 we will require updates on any significant issues or relationships identified and a full response, detailing findings, when your investigation is concluded,” the letter reads.

It also reminded recipients that any subsidiaries or branches located outside of Britain are still subject to UK rules and regulations when it comes to monitoring client accounts and researching customers.

The leak is said to indicate that more the 500 banks across the world have worked with Mossack Fonseca to set up nearly 15,600 shell companies, which could allow clients to avoid tax by hiding their money abroad.

Earlier this week HSBC, Credit Suisse and the Royal Bank of Scotland-owned Coutts Trustees all publicly denied they were using complex offshore structures to help their customers commit tax avoidance.

Commenting on the letter, which was written on Tuesday but acquired by the Financial Times on Thursday, the FCA said in a statement that it is working closely with ‘a number of agencies’ to ensure that no wrongdoing has taken place.

“As part of our responsibility to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime,” it said.

“We have also today [Tuesday] published our annual Business Plan which identifies financial crime and anti-money laundering activity as one of our priorities for the year.”

The news comes as it is revealed Prime Minister David Cameron wrote a letter of his own to European Council President Herman van Rompuy in 2013, urging him to differentiate between companies and trusts when drafting anti-money laundering rules.

This is despite warnings that the distinction could create a loophole allowing tax dodgers to continue evading their bills.