Police raided the headquarters of the Panama law firm whose leaked documents have unleashed a global scandal over how the world's elite use offshore companies to hide their wealth.
Organized crime police surrounded Mossack Fonseca's headquarters in Panama City as the offices were being searched, along with several other branches.
Prosecutors said the raids had taken place "with no incident or interference," but gave no details on the results of the searches.
The fallout from the so-called Panama Papers, which law firm Mossack Fonseca claims were stolen when hackers from abroad breached its system, has spread around the world.
A year-long probe by a consortium of investigative journalists examined the papers, which come from around 214,000 offshore entities and cover almost 40 years.
The world's business, political and even sports elite have been thrown onto the defensive.
Iceland's prime minister was forced to resign after it emerged he owned shares in the country's banks through an offshore company during the financial crisis.
Leaders in Britain and Ukraine have faced questions over their taxes, while Russian President Vladimir Putin has sought to divert attention from his entourage by claiming it is all a US plot against him.
China has been censoring online forums and media to stifle discussion of the papers, which showed relatives of eight of its political top brass also owned offshore companies.
And wealthy citizens in Australia, France, India, Mexico, Peru, Spain and elsewhere face probes over suspected tax avoidance after their names figured in some of the 11.5 leaked million documents.
The bigger picture'
Panama has hit back at the apparent blemish on its image as an important financial crossroads.
It warned France earlier Tuesday, before the raid on the law firm, of unspecified diplomatic measures if France does not remove it from a blacklist of tax havens.
Paris put Panama back on its national list of uncooperative jurisdictions, after removing it in 2012, in the wake of the leaks.
France is also urging the European Union and all member states of the Organization for Economic Cooperation and Development to follow suit.
Such an international designation would deal a heavy blow to Panama's vital financial services sector, which the government has been trying to make more transparent.
Australia's tax commissioner has also said he intends to propose a plan to pool international data to hunt tax dodgers at an upcoming meeting of global tax officials in Paris.
Chris Jordan told a local financial newspaper the probe would be based on a six-country collaboration he set up in 2012 to investigate the world's largest e-commerce companies.
"We're basically trying to get the bigger picture," he told the Australian Financial Review. "It's never been tried on this scale before."
The European Union unveiled plans Tuesday to force the world's biggest multinationals to faithfully report earnings and pay their fair share of taxes, saying the Panama Papers scandal added to the need for change.
Its executive arm said that under the new rules, big companies operating in Europe would have to make public what they earn in each member state of the 28-nation bloc.
Country-by-country reporting has been a major demand of tax activists who accuse big corporations of secretly shifting profits to low tax jurisdictions, often using shell companies such as those exposed in the Panama Papers leaks.