Paradise Papers - Short story
“Paradise Papers” is the name given to the almost 9-month secret investigation conducted after an epic leak of more than 13.4 million of files containing information about offshore secret investments involving many politicians, celebrities, renowned business men and big multinational companies worldwide, as well as some abuses and tax engineering strategies executed to hide huge assets and avoid taxes. This work was led and carried out by the ICIJ (International Consortium of Investigative Journalists), a global network of more than 200 investigative journalists in 70 countries; in collaboration with other journalists and important newspapers, among which we can mention The New York Times, BBC Panorama and The Guardian.
Where do the leaked files come from and how were these obtained?
The leak consist in millions of confidential files, mainly from the big law firm Appleby, which specially offers offshore legal services and is based in Bermuda, besides of having other 9 offices located in different islands, as well as offices in Shanghai and Hong Kong; and also comprises other files from the corporate records of 19 jurisdictions: Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, the Cayman Islands, the Cook Islands, Dominica, Grenada, Labuan, Lebanon, Malta, the Marshall Islands, St Kitts and Nevis, St Lucia, St Vincent, Samoa, Trinidad and Tobago, and Vanuatu.
The files cover a period of almost 70 years (from 1950 to 2016) and include a huge set of documents of diverse nature, not only such as emails, memorandums and presentations, but also trusts deeds, investment records, agreements, corporate registries, financial statements, transactions support documents, among others.
These files were obtained by the German newspaper Süddeutsche Zeitung, who then shared it with the ICIJ in order to conduct the investigation, as was the case with the Panama Papers. However, the source of the leak remains unknown, since Süddeutsche Zeitung issued a manifest saying that for protection and safety reasons, as a general policy they will not reveal any information of it sources.
Why is this investigation so relevant or why all the fuss about it?
On November 5th, 2017; the ICIJ let the world know about the executed investigation and publicly released the content of many documents that were reviewed on it, information that the media quickly spread worldwide, thus awakening social concern and controversy after exposing many renowned politicians, big multinational companies and famous public figures, as holders of huge investments in territories that are considered tax havens; bringing into question, in some of the cases, the source of the wealth or the business reason of some of the identified investments, as well as the motives to keep these in this kind of jurisdictions, which are known for being usually chosen to hide assets and/or reduce tax loads.
By means of the Paradise Papers official website (https://www.icij.org/investigations/paradise-papers/), as more advances are being achieved towards the organization and structuration of the millions of leaked files, during the latest weeks, the ICIJ has been continuously publishing more and more information, news, documents and other data as part of the investigation and its outcomes.
Likewise, the aforementioned website also provides access to a large database named “Offshore Leaks Database”, through which the ICIJ has compiled and connected all the information found not only in Paradise Papers, but also in Panama Papers, and in other similar leaks, such as the Offshore Leaks and the Bahamas Leaks, hence allowing any person to search and review who are the people behind more than 520,000 offshore companies, foundations and trusts identified as a result of said investigations and leaks, as well as the Appleby files that made up the Paradise Papers. Additionally, the website has included as part of its database, a special section named “Paradise Papers Power Players”, which let the users explore the profiles of the many politicians and leaders exposed through the files reviewed during the investigation, as well as to find precise details of their connections and links, or of their relatives’ or associates’ links, to the offshore companies and investments, and to other politicians and companies somehow involved in those leaks.
What have been the effects or consequences following the public release of Paradise Papers?
As it might have been expected, the release of Paradise Papers and the databases integrating said investigation, have caused that the governments and tax authorities all over the world are starting audits and taking several measures as a reaction to the possible unlawful practices that could be entailed by the actions and omissions detected after this massive leak.
Among the main reactions recorded so far as a result of Paradise Papers release, we can mention the following:
- In Europe, the Tax Minister of Netherlands appointed that the government will re-examine 4,000 tax rulings reached between the Dutch government and various foreign companies, considering that, based on the findings of the investigation, it appears that some of those companies did not comply with the applicable regulations and conditions.
On the other hand, members of the European Parliament have declared that the EU member states shall take actions to address and eradicate the implementation of tax avoidance strategies.
- In the United States, a group of senators requested two official investigations regarding the participation of the Commerce Secretary, Wilbur Ross, in the shipping company Navigator Holdings; and the possible conflicts of interests therein involved.
- In Colombia, the president Juan Manuel Santos publicly released his personal financial statements of years 2015 and 2016, after having been linked to two offshore companies in Barbados.
- In Argentina, arrest warrants were issued against four officers of Tucuman University, who were apparently involved in money laundering schemes related to the mining company La Alumbrera, which was linked to offshore companies of the Swiss company Glencore that were used as vehicles to reduce taxes applicable to mineral resources extracted from Argentina.
- In Chile, the Ministry of Transport and Telecommunications informed that he has contacted the tax authorities to collaborate in an audit that is still in process with respect to Alsacia – Express, the big company operating in the field of public transport, which have held businesses in Bermuda.
- In Singapore, the M.A.S. (Monetary Authority of Singapore), who performs as central bank and financial regulator, has informed that it will conduct a deep review of the Paradise Papers files and take the required measures against any individual or entity who has breached the laws of the country.
- In Mexico, the Tax Administration Service has publicly released a statement informing that audits will be conducted over those individuals and entities who are involved in Paradise Papers and are also subject to tax obligations in Mexico, in order to assess if there are elements indicating tax evasion acts and, where applicable, proceed with the execution of its law faculties upon the matter. Likewise, this authority informed that, for the aforementioned purposes, it will also rely on the information exchange agreements that have been concluded with diverse countries.
In order to know more details about the Paradise Papers findings and the public figures that has been exposed therein, as well as the background of this journalistic investigation; besides visiting the Paradise Papers ICIJ’s official website, we recommend you to watch the video “The true story behind the secret 9-month Paradise Papers investigation” presented by VICE News Tonight on HBO, by accessing through the following link:
By Alejandra Rivas Silva
Bc2.mx - Editorial coordinator and analyst
November 27, 2017.