The ‘Paradise Papers’ — what you need to know

Already dubbed the “Paradise Papers,” this trove of 13.4 million leaked documents details the lengths that some of the world’s richest and most powerful have gone to in order to avoid taxes. The files reach into 2016 and stretch all the way back to 1950 and include emails, business agreements and bank statements.

Nearly half of the files — around 6.8 million — are from one “offshore law firm” called Appleby. The company, founded in 1898 in Bermuda, operates today in nine other locations — the British Virgin Islands, the Cayman Islands, Guernsey, Hong Kong, the Isle of Man, Jersey, Mauritius, the Seychelles and Shanghai. The company’s website is in English, Russian and Chinese.

The cache of documents also includes company registries from 19 countries and half a million records from Asiaciti Trust, a corporate service provider headquartered in Singapore.

Where did these files come from?

Appleby admitted in October that in 2016 hackers had breached its system and that client data may have possibly been compromised.

The Germany daily Süddeutsche Zeitung was the first media outlet to obtain the leaked documents. The newspaper, which was also the first press outlet to get the leaked Panama Papers last year, again turned to the American-based International Consortium of Investigative Journalists (ICIJ) for coordination help.

This time the ICIJ led a group of 96 media partners around the world to filter all the data before going public. According to the Guardian, which worked on both cases, in all 381 journalists from 67 countries were involved in the Paradise Papers investigation.

Who’s involved?

A lot of names have been tossed around already but the most prominent to date is Britain’s Queen Elizabeth II.

Queen Elizebeth II has money in the Caymen Islands and Bermuda

Yet the ICIJ promises that the names of more than 120 politicians in around 50 countries appear in the documents. So far US Secretary of State Rex Tillerson and a close advisor to Canadian Prime Minister Justin Trudeau have been brought into focus.

The ICIJ say that “in all, the offshore ties of more than a dozen Trump advisers, cabinet members and major donors appear in the leaked data.”

Multinationals like Nike, Apple, Uber and Facebook have also been named as companies that constantly use loopholes to sidestep local tax obligations.

What has actually been revealed?

So far, not too much.

In the Queen’s case the documents revealed that around £10 million ($13 million, 11.3 million euros) of her private money was placed in funds held in the Cayman Islands and Bermuda. Though there is no suggestion of illegal activity or a failure to pay any taxes due, the case leaves a bad aftertaste, especially since it involves the head of a sovereign state.

US Commerce Secretary Wilbur Ross named in the documents

In the US, the document leak may prove more explosive since close business links have already been shown between American Commerce Secretary Wilbur Ross and the inner circle of the Russian president.

But according to the BBC, Sunday’s revelations are only a fragment of the coming week-full of disclosures, during which more of the world’s most powerful politicians and conglomerates along with the super rich will be exposed for using trusts, foundations and faceless shell companies to hide money.

What does this all mean?

Tax havens are legal even thought they help keep funds beyond the reach of tax authorities, regulators and criminal investigations. The Guardian has nevertheless hinted that some of these popular loopholes have been used illegally to get around sanctions and hide relationships.

According to the ICIJ, “While having an offshore entity is often legal, the built-in secrecy attracts money launderers, drug traffickers, kleptocrats and others who want to operate in the shadows. Offshore companies, often ‘shells’ with no employees or office space, are also used in complex tax-avoidance structures that drain billions from national treasuries.”

Even after the shock of the Panama Papers’ disclosure last year, the global offshore financial system is much more complex and much bigger than anyone imagined. Creative book-keeping and secrecy have allowed businesses and individuals to avoid taxes at an astonishing rate, making themselves richer with little thought of consequences.

For anyone with offshore dealings, the next week will be one full of apprehension. But if these revelations will change anything in the long run is another question altogether. History is usually on the side of the rich.

Article source: http://www.dw.com/en/the-paradise-papers-what-you-need-to-know/a-41248449?maca=en-rss-en-bus-2091-xml-atom