The Panama Papers detailing how the rich and powerful used offshore corporations to hide money and potentially evade taxes, were leaked to the media in 2016.

"So far, it appears that none of the 11 banks which were involved in such dealings have substantially breached money laundering rules," Bafin president Felix Hufeld said at an event in Frankfurt on Wednesday.

"Due to lack of a mandate, we could not verify if taxes were evaded," he said. "What you make of the fact that banks let themselves be used to avoid taxes - even though in a legal way - that is a completely different matter."

Bafin is tasked with making sure German banks are not involved in activities such as money laundering or are involved in funding illegal organisations, while fiscal authorities are in charge of making sure they adhere to tax laws.

While tax evasion refers to illegal ways to avoid paying taxes, tax avoidance refers to often legal methods of paying the least amount of tax possible.

Hufeld said he remained sceptical about how the 11 banks with ties to Panamanian law firm Mossack Fonseca - which was at the heart of the global scandal - were able to monitor whether anti-money-laundering standards were applied in the offshore businesses.

The banks include Deutsche Bank (>> Deutsche Bank), Commerzbank (>> Commerzbank), Berenberg and BayernLB [BAYLB.UL], which have all said that they adhered to the rules.

Some 11.5 million documents from Mossack Fonseca were leaked to a German newspaper in 2016 and Germany's Federal Crime Office(BKA) said last year that it had obtained a copy of the Panama Papers.

In the wake of this and multiple other reports about tax avoidance by the rich and the powerful, European Union finance ministers in December adopted a blacklist of 17 jurisdictions, including Panama, deemed as tax havens.

European tax commissioner Pierre Moscovici late last year likened tax professionals that help evasion to "vampires that fear the light," and against which only transparency can work as a deterrent.

However, in a potential blow to the campaign against tax avoidance, this week European Union officials proposed removing Panama from the blacklist of tax havens.

(Reporting by Arno Schuetze; Editing by Elaine Hardcastle)

Stocks treated in this article : Deutsche Bank, Commerzbank