Paradise Papers: Huge offshore data leak reveals financial secrets of global elites

It’s called the Paradise Papers: the latest in a series of leaks made public by the International Consortium of Investigative Journalists shedding light on the trillions of dollars that move through offshore tax havens. The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year old company that caters to blue chip corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars. The New York Times is part of the group of more than 380 journalists from over 90 media organizations in 67 countries that have spent months examining the latest set of documents.

#ParadisePapers - 13.4 million documents, 94 media partners, more than 120 politicians and world leaders. https://t.co/lHHyt9eLTS pic.twitter.com/mecTosLSxD

— ICIJ (@ICIJorg) November 5, 2017

There are two prominent names from Pakistan in the documents: Former prime minister of Pakistan Shaukat Aziz and Former National Insurance Corporation Limited chairperson Ayaz Khan Niazi. Shaukat Aziz was found linked with Antarctic Trust.set up by him whose beneficiaries include Aziz’s wife, their children and granddaughter. Aziz had set up the trust in Delaware (USA) before becoming finance minister. Interestingly, the trust was neither declared during his stint as finance minister nor as prime minister. Ayaz Khan Niazi has also been identified in the records in connection with four offshore holdings in British Virgin Islands. One of them was a trust, Andalusian Discretionary Trust, while the other three were set up as companies: Andalusian Establishment Limited, Andalusian Enterprises Limited and Andalusian Holdings Limited. All the three companies were set up in 2010 when Niazi was the chairperson of National Insurance Corporation Limited. In the record, however, Niazi’s two brothers, Hussain Khan Niazi and Muhammad Ali Khan Niazi, were shown as the beneficial owners, whereas Ayaz along with his father Abdul Razaq Khan and mother Fauzia Razzaq acted as directors. As with the Panama Papers, the Paradise Papers leak came through a duo of reporters at the German newspaper Süddeutsche Zeitung and was then shared with I.C.I.J., a Washington-based group that won the Pulitzer Prize for reporting on the millions of records of a Panamanian law firm. The release of that trove of documents led to the resignation of one prime minister last year and to the unmasking of the wealth of people close to President Vladimir V. Putin of Russia. The predominantly elite clients of Appleby contrast with those of Mossack Fonseca — the company whose leaked records became the Panama Papers — which appeared to be less discriminating in the business it took on. Much of the material makes for dull reading: Spreadsheets, prospectuses and billing statements abound. But amid these are documents that help reveal how multinational companies avoid taxes and how the superrich hide their wealth. The records date back to 1950 and up to 2016. Appleby has offices in tax havens around the world. In addition to is Bermudan headquarters, it works out of places the British Virgin Islands and the Cayman Islands in the Caribbean; the Isle of Man, Jersey and Guernsey off Britain; Mauritius and the Seychelles in the Indian Ocean; and Hong Kong and Shanghai. Americans — companies and people — dominate the list of clients. Past disclosures, such as the 2013 “Offshore Leaks” from two offshore incorporators in Singapore and the British Virgin Islands, the 2015 “Swiss Leaks” from a private Swiss bank owned by the British bank HSBC and another leak in 2016 from the Bahamas were dominated by clients not from the United States. The documents come not only from Appleby, but also from the Singaporean company Asiaciti Trust and official business registries in places such as Bermuda, the Cayman Islands, Lebanon and Malta. Setting up companies offshore is generally legal, and corporations routinely do so to facilitate cross-border transactions such as mergers and acquisitions. Appleby, in a public statement on Oct. 24, after inquiries from I.C.I.J., said that it was “subject to frequent regulatory checks” in “highly regulated jurisdictions.” “Appleby has thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients,” the company said. But with this latest leak, some wealthy individuals and multinational corporations may think twice about using offshore ownership structures, said Jack Blum, a lawyer who worked for decades on congressional committees investigating money transfers overseas. “The danger of being found out has increased exponentially,” Blum said in an interview. “If I were a rich guy looking to hide money offshore so that the tax man won’t get me, my nightmare would be to put it in the hands of somebody whose documents leak.” - [www.nytimes.com]