By Pauline Kamiri

Pandora papers are the latest and largest of a series of major leaks of financial data that have convulsed the offshore world since 2013. The cache includes 11.9 million files from companies hired by wealthy clients to create offshore structures and trusts I tax havens such as Panama, Dubai, Monaco, Switzerland and Cayman Islands. Previous offshore leaks including Panama papers in 2016 and Paradise papers in 2017.

The report released on October 3rd 2021, by the International Consortium of Investigative Journalists which involved 600 journalists from 150 media outlets in 117 countries across the globe much to the shock of many across the globe. The findings shed light on previously hidden dealings of the elite and corrupt and how they have used offshore accounts to shield assets collectively worth trillions of dollars majorly to evade tax and conceal the assets for other shady reasons.

More than 100 billionaires including 35 current and former world leaders, celebrities, rock stars and business leaders feature in the leaked data. Most of these people use shell companies to hold luxurious items that include multi-million-dollar properties, companies, yachts, investments in stocks and shares as well as incognito bank accounts.

 Politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former U.K. Prime Minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and former associates of both Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin.

In the leak, 14 offshore service providers provide corporate services to individuals or companies seeking to do business offshore .Their clients are always seeking to set up companies or trusts discretely in lightly or regulated tax havens such as British Virgin Islands, Panama, the Cook Islands and the US states of South Dakota and Florida.

Benefiting from these offshore entities is not illegal in most parts of the world and in most cases people have legitimate reasons such as security and investment for doing so. The secrecy offered by tax havens has however proven attractive to tax evaders, fraudsters and money launderers:  some of whom are exposed in the files.

Most of these offshore jurisdictions have no income or corporation taxes which makes them potentially attractive to wealthy individuals and companies who don’t want to pay taxes in their home countries.  These offshore systems also tend to be highly secretive and publish little or no information about the companies or trusts incorporated there. However, this is dangerous since it can be useful to criminals such as tax evaders and money launderers who constantly have the need to hide from tax and law enforcement authorities. 

Individuals in corrupt and unstable countries choose to use offshore providers to put their assets beyond the reach of repressive governments or criminal adversaries who may want to seize them. Reasons such as inheritance and estate planning are also part and parcel of why individuals like to use offshore jurisdictions.

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