History has a habit of repeating itself, be it in any sphere, the same stories come up again and again like bubbles because it’s not over till it’s over. Beginning from The Panama Papers when the International Consortium of Investigative Journalists had exposed the rogue offshore finance industry with a massive leak of more than 11.5 million financial as well as legal records of a system that permits crime, wrongdoings especially corruption by concealed offshore companies. Just a year later a more intense paper leak had taken place named Paradise Papers, which were a compilation of roughly 13.4 million non-public electronic records regarding offshore investments that were leaked to German reporters. And now after almost 4 years, there has been a revaluation of The Pandora Papers, which are nearly 12 million documents and files that were leaked revealing the secret wealth and dealings of world leaders, politicians, and multi-millionaires. The data again was obtained by the International Consortium of Investigative Journalists in Washington DC, and it has resulted in one of the most extensive global investigations ever conducted. More than 600 Journalists from 117 countries investigated the top-secret fortunes of some of the world’s most powerful people.
The documents reveal how some of the world’s notable and dignitary public figures, including over 330 politicians from about 90 countries, clandestinely used offshore companies to conceal their filthy wealth.
But what are offshore companies and how are the connections made?
Offshore companies are those companies that are incorporated in a country overseas, especially a far-off jurisdiction. Here the papers have disclosed the complex networks of those companies which are set up across borders, which have emanated in secret ownership of illegal money and assets. And the reason why it is so untroubled to set up assets in offshore territories is that first of all it is simple to establish a business. Secondly, there are laws that make it arduous to identify the owners of businesses, and there is little or no corporate tax. Such destinations are called none other than “Tax Havens” or “Secrecy Jurisdictions”. These territories cannot be claimed or defined exactly but there are some very prominent jurisdictions like British Overseas Territories such as the Cayman Islands and the British Virgin Islands, together with Singapore and Switzerland. In most nations, it is kosher to have assets offshore or to use shell companies ( an inactive corporation used as a vehicle for various financial maneuvers) to carry on dealings across the national jurisdiction. Such places are mostly used by politicians so that they can keep politically unseen or even interdicted activities away from the audience. These particular involvements often amount to shifting profits from high tax countries, where they are earned, to companies that exist only on paper in low tax territories.
Many of the power players who could help put a termination to the offshore system instead exploiting them for gains, stashing assets in covert companies and trusts while their governments do minimalistic to slow down a global flow of illegitimate money that enriches criminals and impoverished nations, according to leaked documents.
The Pandora papers investigation unravels the filthy owners of offshore companies, private jets, mansions, yachts including artworks by Picasso.
The news unraveled a related person with the secret document none other than India’s cricket superstar Sachin Tendulkar, pop music diva Shakira and many more. These papers have also leaked details about a shell company that is registered in the United Kingdom, stating that Raffael Amato used to buy land in Spain. More prominent figures include the Czech Republic’s populist Prime Minister, a multi-millionaire who has censured against the malpractices of economic and political elites, owns a $22, million Chateau in the French Riviera- replete with a cinema and two swimming pools which was acquired through shell companies.
The secret records all the dealings of the King of Jordan, Presidents of Ecuador, Ukraine, and Kenya also including former British Prime Minister Tony Blair. The leak has not left the financial activities of Vladimir Putin’s “ unofficial minister of propaganda” and more than 130 billionaires from Russia, Turkey, and The U.S, secretive anymore.
But how is it easy to accumulate tons of money offshore? For this, all a person has to do is form a shell company in one of the jurisdictions with the utmost level of confidentiality, with its existing name only, if there is no staff or not even an office. Such firms can cater an address and names of paid directors, hence leaving no trace of who actually is behind this illegitimate business.
The legal loopholes allow people to legally avoid paying some taxes by moving their money or establishing companies in Tax Havens, but this is often regarded as unethical. So, according to the UK government, tax evasion “involves operating within the letter, but not the spirit, of the law”.
The UK has been criticized heavily for letting anonymous people own property through unknown companies overseas.
The records were taken from 14 offshore service firms around the globe that set up shell companies and various other offshore nooks for clients wanting to keep their financial activities as concealed as possible. The secret documents contain information on nearly three times as many current and former country leaders’ dealings as any previous leak of documents from offshore Havens.
But what can we infer from Pandora Paper?
The Pandora Papers investigation provides a different view on how money and power operate in the twenty-first century. It also shows how the rule of law has been bent and broken around the globe by a system of financial Secrecy enabled by the United States and many other wealthy nations.