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Paradise Papers: What we know about the leak

  • Published at 06:47 pm November 6th, 2017
Paradise Papers: What we know about the leak

Massive leak of secret documents shared with news organisations shows how world’s biggest businesses and leading politicians have sheltered their wealth in tax havens. Here's what we know so far about the Paradise Papers leak.

What are the Paradise Papers?

The Paradise Papers are a huge leak of financial documents that throw light on the top end of the world of offshore finance.

A number of stories are appearing in a week-long expose of how politicians, multinationals, celebrities and high-net-worth individuals use complex structures to protect their cash from higher taxes.

As with last year's Panama Papers leak, the documents were obtained by the German newspaper Suddeutsche Zeitung, which called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation.

The Paradise Papers name was chosen because of the idyllic profiles of many of the offshore jurisdictions whose workings are unveiled, including Bermuda, the headquarters of the main company involved, Appleby. It also dovetails nicely with the French term for a tax haven - paradis fiscal. Then again, the Isle of Man plays a big part.

Who is being exposed?

The offshore financial affairs of hundreds of politicians, multinationals, celebrities and high-net-worth individuals, some of them household names, have been revealed. The papers also throw light on the legal firms, financial institutions and accountants working in the sector and on the jurisdictions that adopt offshore tax rules to attract money. The top stories so far include:

British Queen's private estate invested about £10m offshore including a small amount in the company behind BrightHouse, a chain accused of irresponsible lending.

One of US President Donald Trump's top administration officials kept a financial stake in a firm whose major partners include a Russian company part-owned by Russian President Vladimir Putin's son-in-law.

A key aide of Canada's PM has been linked to offshore schemes that may have cost the nation millions of dollars in taxes, threatening to embarrass Justin Trudeau, who has campaigned to shut tax havens.

Lord Ashcroft, a former Conservative party deputy chairman and a significant donor, may have broken the rules around how his offshore investments were managed. Other papers suggest he retained his non-dom tax status while in the House of Lords, despite claiming to have become resident in the UK.

How questions were raised about who is controlling Everton FC.

An oligarch with close links to the Kremlin may have secretly taken ownership of a company responsible for anti-money laundering checks on Russian cash.

This is by no means everything - far more will be coming out over the next few days, much of it with strong UK links.

Where do the Paradise Papers come from?

There are more than 1,400GB of data, containing about 13.4 million documents. Some 6.8 million come from the offshore legal service provider Appleby and corporate services provider Estera. The two operated together under the Appleby name until Estera became independent in 2016. Another six million documents come from corporate registries in some 19 jurisdictions, mostly in the Caribbean. A smaller amount comes from the Singapore-based international trust and corporate services provider, Asiaciti Trust. The leaked data covers seven decades, from 1950 to 2016.

What is Appleby?

A law firm that helps corporations, financial institutions and high-net-worth individuals set up and register companies in offshore jurisdictions.

With its headquarters in Bermuda and a history dating back to the 1890s, it has become one of the largest and best known of about 10 major companies involved in the specialist arena. The leak shows the US dominates Appleby's client register, with more than 31,000 US addresses for clients. There were more than 14,000 UK addresses and 12,000 in Bermuda.

Who leaked the Paradise Papers?

As with 2016's Panama Papers, German newspaper Suddeutsche Zeitung obtained the original material and was the stepping off point for this investigation. In the case of the Panama Papers, the originator of the leaks, named only as John Doe, issued a manifesto a month after the publication date. A simple statement this time says: "For their protection, Suddeutsche Zeitung does as a general policy not comment on its sources!"

What exactly is a tax haven?

It's hard to pin down an exact definition. Tax haven is the term usually used in the media and public, whereas the industry would prefer the term offshore financial centre (OFC). It is essentially a financial jurisdiction outside the regulations of your own nation used by companies and individuals to lower their taxes on profits or assets. They are usually secretive and stable. They are also often small islands, many of them UK Crown Dependencies or Overseas Territories, but not exclusively so. Nations such as Switzerland, Ireland and the Netherlands have similar tax reducing mechanisms, while the UK and the US are leading nations providing services that facilitate the use of OFCs.

Sources: BBC, Guardian, AFP, Reuters, NBC