from the database of the world’s fourth biggest offshore law firm,
Mossack Fonseca. The records were obtained from an
anonymous source by the German newspaper Süddeutsche
Zeitung, which shared them with the International Consortium of
Investigative Journalists (ICIJ). The ICIJ then shared them with a
large network of international partners, including the Guardian and
the BBC.
What do they reveal?
The documents show the myriad ways in which the rich can
exploit secretive offshore tax regimes. Twelve national leaders are
among 143 politicians, their families and close associates from
around the world known to have been using offshore tax havens.
A $2bn trail leads all the way to Vladimir Putin. The Russian
president’s best friend – a cellist called Sergei Roldugin – is at
the centre of a scheme in which money from Russian state banks
is hidden offshore. Some of it ends up in a ski resort where in
2013 Putin’s daughter Katerina got married.
Among national leaders with offshore wealth are Nawaz Sharif,
Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister
and former vice-president of Iraq; Petro Poroshenko, president of
Ukraine; Alaa Mubarak, son of Egypt’s former president; and the
prime minister of Iceland, Sigmundur Davíð Gunnlaugsson .
An offshore investment fund run by the father of British prime
minister David Cameron avoided ever having to pay tax in Britain
by hiring a small army of Bahamas residents to sign its
paperwork. The fund has been registered with HM Revenue and
Customs since its inception and has filed detailed tax returns
every year.
A lengthier overview of the revelations can be found here .
What is Mossack Fonseca?
It is a Panama-based law firm whose services include
incorporating companies in offshore jurisdictions such as the
British Virgin Islands. It administers offshore firms for a yearly
fee. Other services include wealth management.
Where is it based?
The firm is Panamanian but runs a worldwide operation. Its
website boasts of a global network with 600 people working in
42 countries. It has franchises around the world, where separately
owned affiliates sign up new customers and have exclusive rights
to use its brand. Mossack Fonseca operates in tax havens
including Switzerland, Cyprus and the British Virgin Islands, and in
the British crown dependencies Guernsey, Jersey and the Isle of
Man.
How big is it?
Mossack Fonseca is the world’s fourth biggest provider of
offshore services. It has acted for more than 300,000
companies. There is a strong UK connection. More than half of
the companies are registered in British-administered tax havens,
as well as in the UK itself.
How much data has been leaked?
A lot. The leak is one of the biggest ever – larger than the US
diplomatic cables released by WikiLeaks in 2010 , and the secret
intelligence documents given to journalists by Edward Snowden in
2013. There are 11.5m documents and 2.6 terabytes of
information drawn from Mossack Fonseca’s internal database.
Are all people who use offshore structures crooks?
No. Using offshore structures is entirely legal. There are many
legitimate reasons for doing so. Business people in countries
such as Russia and Ukraine typically put their assets offshore to
defend them from “raids” by criminals, and to get around hard
currency restrictions. Others use offshore for reasons of
inheritance and estate planning.
Are some people who use offshore structures crooks?
Yes. In a speech last year in Singapore, David Cameron said “the
corrupt, criminals and money launderers” take advantage of
anonymous company structures. The government is trying to do
something about this. It wants to set up a central register that
will reveal the beneficial owners of offshore companies . From
June, UK companies will have to reveal their “significant” owners
for the first time.
What does Mossack Fonseca say about the leak?
The firm won’t discuss specific cases of alleged wrongdoing,
citing client confidentiality. But it robustly defends its conduct .
Mossack Fonseca says it complies with anti-money-laundering
laws and carries out thorough due diligence on all its clients. It
says it regrets any misuse of its services and tries actively to
prevent it. The firm says it cannot be blamed for failings by
intermediaries, who include banks, law firms and accountants.
Panama Papers reporting team: Juliette Garside, Luke Harding,
Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen
Gibson and Nick Hopkins
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