On Sunday night news broke of a massive leak of documents that shone light on the unknown world of offshore. We take a look at some of the details of the 11 million documents and some of the resources giving more details.
What are the Panama Papers?
The Panama Papers is an unprecedented leak of around 11 million documents, 2.6tb of data, from Mossack Fonseca, the world’s fourth largest offshore law firm. The files were given to the German newspaper, Süddeutsche Zeitung, and were then passed on to the International Consortium of Investigative Journalists (ICIJ) who have then been working with journalists from 80 countries to review the files.
What do the documents reveal?
The documents reveal details of how the rich have used tax havens to hide billions and avoid tax. 143 politicians have been linked to the papers including 12 world leaders such as Russian President Vladimir Putin and Pakistan’s prime minister Nawaz Sharif. Some activities of Mossack Fonseca are potentially in breach of money laundering laws, encouraging the covering up on true owners.
Some papers have linked the proceeds of the Brinks-MAT robbery, worth £26 million, in 1983 to a shell company incorporated by Mossack Fonseca, who had knowledge of the crime. The Icelandic Prime Minister, Sigmundur Gunnlaugson, had an undeclared interest linked to his wife’s wealth and is now facing calls for his resignation.
What is Mossack Fonseca?
It is a law firm based in panama that offers services which include incorporating companies in tax havens such as the British Virgin Islands. For a small fee they will then manage the company, allowing the beneficial owner to keep a safe distance and stay hidden.
Do these revelations change anything?
These revelations have provoked strong words from world leaders such as David Cameron who pledged to crackdown on offshore schemes four years ago. In May, Cameron will host a summit about offshore issues and the Panama Papers will more than likely feature in those talks. The papers will also encourage public calls for reform.
In June the UK will implement a central register which will require the beneficial or ‘significant’ owner of a UK company will have to be named. But a government consultation paper published in March leaves open the possibility that a central register might be kept in the country in which a firm is incorporated, in effect allowing offshore secrecy to carry on. We will have to wait and see if any changes are effective but with 11 million documents the revelations are unlikely to go away until something is done.
Have Mossack Fonseca responded to the leaks?
Yes. They responded to all the accusations saying that many parties that have been mentioned are not clients of the firm. They also state that their compliance has a strong record and have not been involved in wrongdoing. A more detailed statement can be found here.
For 40 years Mossack Fonseca has operated beyond reproach in our home country and in other jurisdictions where we have operations. Our firm has never been accused or charged in connection with criminal wrongdoing.
Where do I find more information?
If the story of the Panama Papers interests you then there is a myriad of different websites that offer more detailed information on the biggest leak in history.
ICIJ – The ICIJ have a dedicated website that offers a lot of information including graphs of data and a powerful introduction video. They also have an interesting read on the firm’s involvement when the super rich divorce.
Fusion– Fusion have an excellent dedicated website with very colourful pictures and entertaining explanations from a wrestler and a porn star.
Süddeutsche Zeitung – The newspaper who first received the leak also have a dedicated website mostly in German but with a number of English articles. A very interesting article, along with a video, is about how the leak occurred and how the investigation then followed.
The Guardian – The Guardian appear to be one of the leading news outlets on this investigation, also pushing the link between Vladimir Putin and $2 billion hidden offshore. They have produced a number of articles but do have an article giving context to the leak here.
BBC – The BBC are airing their Panorama programme tonight at 1930 on BBC1 taking focus on the investigation into the panama papers.