Tax haven (paradis fiscal) investment of around $10 trillion
|Description||A set of 13.4 million confidential electronic documents about use of tax havens to house around $10 trillion. The highly skewed nature of the exposure (very little from the US) suggest it was a modified hangout|
The Paradise Papers is a set of 13.4 million confidential electronic documents relating to offshore investment that were released into the public domain on 5 November 2017. As with the leak of the Panama Papers in 2016, the documents were obtained by the German newspaper Süddeutsche Zeitung, which called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation. BBC Panorama and The Guardian are among the nearly 100 media groups investigating the papers.
Paradise Papers was the name chosen because of the idyllic profiles of many of the offshore jurisdictions whose workings are unveiled, including Bermuda, the HQ of the main company involved, Appleby. It also dovetails nicely with the French term for a tax haven - paradis fiscal.
The Paradise Papers, comprising 1.4TB of data, contain the names of more than 120,000 people and companies. Among those whose financial affairs are mentioned are Queen Elizabeth II, the President of Colombia, Juan Manuel Santos, and the US Secretary of Commerce, Wilbur Ross. According to the Boston Consulting Group, the amount of money involved is around $10 trillion.
Lack of media coverage
On 7 November 2017, James O'Brien gave a simple explanation for the lack of media coverage of the tax avoidance allegations - "The avoiders own the newspapers." Speaking on LBC, O’Brien launched a scathing attack on Telegraph owners David and Frederick Barclay, Daily Mail owner Jonathan Harmsworth and The Sun and The Times owner Rupert Murdoch for gagging the damning financial data leak.
The Paradise Papers investigation showed how the powerful and ultra-wealthy secretly invest vast amounts of cash in offshore tax havens, but it has been largely swept under the carpet by the mainstream media.
The Telegraph accused Labour leader Jeremy Corbyn of hypocrisy for calling on the Queen to apologise for her estate’s investment in offshore funds, ignoring the scandal of millions of pounds being hid oversees away from the tax man.
Barclay brothers Sir and Sir Frederick, who are estimated to be worth over £7 billion, own their own Channel Island (Brecqhou, off the coast of Sark) and have frequently been accused of tax avoidance.
In 2013 Private Eye reported that Jonathan Harmsworth falsely claims non-dom status, in order to avoid paying tax on his stately home, Ferne House. This move saves him several millions of pounds in tax annually.
13.4 million documents
There are more than 1,400GB of data, containing about 13.4 million documents of which 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.
Later that month, the International Consortium of Investigative Journalists (ICIJ) approached the offshore law firm Appleby with allegations of wrongdoing. Appleby said that some of its data had been stolen in a cyber attack the previous year, and denied ICIJ's allegations. After the documents were published, the company stated that there was "no evidence of wrongdoing", they "...are a law firm which advises clients on legitimate and lawful ways to conduct their business", and "We do not tolerate illegal behaviour".
Paradise in November
The Paradise Papers data comprising some 13.4 million documents and totalling about 1.4TB come from two offshore service providers, Appleby and Asiaciti Trust, and from the company registers of 19 tax havens. In contrast to the Panama Papers, which involved only a single country but nearly double the amount of data (2.6TB), many countries were involved in this data leak. Süddeutsche Zeitung journalists contacted the ICIJ, which has been investigating the documents with 100 media partners. The consortium made the data available to said partners on a platform created specifically for the project, allowing journalists across the globe to do collaborative investigative work. The documents were released by the consortium on 5 November 2017.
According to the papers, Facebook, Apple, Uber, Nike, Walmart, Allianz, Siemens, McDonald's, and Yahoo! are among the corporations that own offshore companies, as well as Allergan, the manufacturer of Botox. According to The Express Tribune, "Apple, Nike, and Facebook avoided billions of dollars in tax using offshore companies."
A Kremlin-owned firm, VTB Bank, put $191 million into DST Global, an investment firm founded by Russian billionaire Yuri Milner, which used it to buy a large share of Twitter in 2011. A subsidiary of the Kremlin-controlled Gazprom funded an investment company that partnered with DST Global to buy shares in Facebook, reaping millions when the social media giant went public in 2012. Twitter similarly went public in 2013. The US government sanctioned VTB Bank in 2014 because of the Russian invasion of Crimea, but DST Global had sold its stake in Twitter by then. Four days after the Facebook stock market launch, a DST Global subsidiary sold more than 27 million shares of Facebook for roughly $1 billion.
The Australian branch of Swiss commodities giant Glencore has been demonstrated to have carried out some $25 billion in cross-currency interest rate swaps, complex financial instruments the Australian Taxation Office suspects of being used to avoid paying taxes in Australia.
Clamping down on tax avoidance
In calling for an 'emergency Budget', Shadow Chancellor John McDonnell said Labour had already calculated £6.5bn could be raised from clamping down on tax avoidance, but he believed that could be significantly higher after the leaking of the Paradise Papers.
|Document:Appleby launches legal action against ICIJ’s UK partners||Article||18 December 2017||Gerard Ryle||"This is a potentially dangerous moment for free expression in Britain" – Gerard Ryle|
|Document:Jeremy Corbyn's speech to the United Nations in full||Speech||8 December 2017||Jeremy Corbyn||Jeremy Corbyn at the United Nations in Geneva upstages Theresa May at the European Union in Brussels|
|Document:The Paradise Papers and HSBC. Who||Article||14 November 2017||Nicholas Wilson||The corruption surrounding Theresa May's seduction of Saudi Aramco to hold its stock market launch (IPO) at the London Stock Exchange next year has involved bribes, lobbying for HSBC and changing the rules by the FCA|
|Document:Was EU Tax Evasion Regulation The Reason For The Brexit Referendum||Blog post||26 September 2017||Josh Hamilton||The EU's new anti-abuse measures coming into force in 2019 would tighten up restrictions on UK-based intermediaries that take part in off-shoring and tax avoidance, of which Britain is a global leader|
- "Paradise Papers: Your guide to four years of offshore revelations". BBC News. 5 November 2017.
- "The avoiders own the newspapers"
- "This is why there’s been so little media coverage of the Paradise Papers"
- "'Paradise papers' expose tax evasion schemes of the global elite" Deutsche Welle. 5 November 2017.
- "So lief die SZ-Recherche". Süddeutsche Zeitung. 5 November 2017.
- "Labour's John McDonnell demands 'emergency Budget'"