Leaked documents on tax evasion and wealth corruption have been made available to journalists. The data was obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC, which has been working with more than 140 media organisations on its biggest ever global investigation.
What has been revealed?
The Pandora Papers leak includes 6.4 million documents, almost three million images, more than a million emails and almost half-a-million spreadsheets.
Stories revealed so far include:
- the prominent Tory donor who was involved in one of Europe’s biggest corruption scandals
- the King of Jordan’s £70m spending spree on properties in the UK and US through secretly-owned companies
- Azerbaijan’s leading family’s hidden involvement in property deals in the UK worth more than £400m
- the Czech prime minister’s failure to declare an offshore investment company used to purchase two French villas for £12m
- how the family of Kenyan president Uhuru Kenyatta’s secretly owned a network of offshore companies for decades
The files expose how some of the most powerful people in the world – including more than 330 politicians from 90 countries – use secret offshore companies to hide their wealth.
Lakshmi Kumar from US think-tank Global Financial Integrity explained that these people “are able to funnel and siphon money away and hide it,” often through the use of anonymous companies.
Offshore countries or territories are where:
- it’s easy to set up companies
- there are laws that make it difficult to identify owners of companies
- there is low or no corporation tax
The destinations are often called tax havens or secrecy jurisdictions. There is no definitive list of tax havens, but the most well known destinations include British Overseas Territories such as the Cayman Islands and the British Virgin Islands, as well as countries such as Switzerland and Singapore.
How easy is it to hide money offshore?
All you need to do is set up a shell company in one of the countries or jurisdictions with high levels of secrecy. This is a company that exists in name only, with no staff or office.
It costs money though. Specialist firms are paid to set up and run shell companies on your behalf. These firms can provide an address and names of paid directors, therefore leaving no trail of who is ultimately behind the business.
How much money is hidden offshore?
It is impossible to say for sure, but estimates have ranged from $5.6 trillion to $32 trillion, according to the ICIJ. The International Monetary Fund has said the use of tax havens costs governments worldwide up to $600bn in lost taxes each year.
What is the UK doing about it?
The UK has been criticised for allowing property to be owned by anonymous companies overseas.
The government published draft legislation in 2018 that would require the ultimate owners of UK properties to be declared. But it is still waiting to be presented to MPs.
A 2019 parliamentary report said the UK system attracts people “such as money launderers, who may wish to use property to conceal illicit funds”.
It said criminal investigations are often “hindered” because police cannot see who ultimately owns properties.
The government recently raised the risk of money laundering through property from “medium” to “high”.
It says it’s cracking down on money laundering with tougher laws and enforcement, and that it will introduce a register of offshore companies owning UK property when parliamentary time allows.
It’s a case of the rich getting richer. Undoubtedly, nothing will happen and the world will continue as is. What a crazy warped world we live in…
The Pandora Papers is a leak of almost 12 million documents and files exposing the secret wealth and dealings of world leaders, politicians and billionaires. The data was obtained by the International Consortium of Investigative Journalists in Washington DC and has led to one of the biggest ever global investigations. More than 600 journalists from 117 countries have looked at the hidden fortunes of some of the most powerful people on the planet. BBC Panorama and the Guardian have led the investigation in the UK.