Pandora Papers is a leakage of documents and files uncovering the hidden fortune and transactions of world leaders including politicians and billionaires.
More than 600 journalists from 117 countries have peeked at the mysterious wealth of some of the most influential people on earth.
BBC Panorama and the Guardian have conducted investigation in the UK.
International Consortium of Investigative Journalists amassed the data in Washington DC that emerged to be one of the gigantic ever global investigations.
It unearths records including, tax avoidance and, in some instances, money laundering by some of the world’s wealthiest and powerful.
The Pandora Papers entails 6.4 million documents, virtually three million images, more than a million emails and nearly half-a-million spreadsheets.
Reports uncovered so far:
•The holders of more than 1,500 UK properties purchased using offshore firms, including individuals accused of corruption
the Qatari ruling family who avoided £18.5m tax on a London super-mansion.
•Sir Philip and Lady Green went on a property rampage after off-loading the BHS retail chain which went on to crumble the prominent Tory donor who was pertained to one of Europe’s biggest corruption scandals
The King of Jordan’s £70m spending escapade on properties in the UK and US through secretly-owned organizations.
•Azerbaijan’s dominating family’s hidden involvement in property deals in the UK worth more than £400m.
•The Czech prime minister’s failure to proclaim an offshore investment company used to purchase two French villas for £12m.
•Kenyan president Uhuru Kenyatta’s discreetly occupied network of offshore companies existing for decades.
The files expose how some of the most powerful people in the world – including more than 330 politicians from 90 countries – use secret offshore companies to conceal their fortune.
According to Lakshmi Kumar from US think-tank Global Financial Integrity, these people “are able to funnel and siphon money away and hide it,” sometimes through the use of nameless companies.
The Pandora Papers uncover complex networks of companies that are established across borders, often arising to hidden ownership of money and assets.
For instance, someone may have a property in the UK, but own it via a chain of companies established in other countries, or “offshore”.
It’s simple to set up companies
there are laws that make it tough to identify owners of companies.
There is low or no corporation tax. The destinations are often labeled tax havens or secrecy jurisdictions.
There is no explicit list of tax havens, however, the most well known destinations include British Overseas Territories such as the Cayman Islands and the British Virgin Islands, as well as countries such as Switzerland and Singapore.
Gaps in the law enable people to lawfully avert paying some taxes by shifting their money or putting up companies in tax havens, but it is frequently seen as unethical.
According to the UK government, tax avoidance “involves operating within the letter, but not the spirit, of the law”.
Also, there are a number of legal reasons people may want to hold money and assets in varied countries, such as safety from criminal attacks or guarding against unstable governments.
Though, having secret offshore properties is not illicit, using a complex network of secret companies to move around money and assets is the perfect way to hide the proceeds of criminality.
There have been repeated calls for politicians to make it difficult to avoid tax or hide assets, particularly following previous leaks such as the Panama Papers.
However, the Pandora Papers signify that “the people that could terminate the secrecy offshore… are themselves profiting from it. So there’s no reason for them to end it”.
All one require to do is organize a shell company in one of the countries or jurisdictions with high levels of privacy. This is a company that exists in word only, with no staff or office.
Although, it costs a lot of money. Specialist firms are hired to set up and run shell companies. These firms can provide an address and names of paid directors, thus leaving no trail of who is ultimately behind the business.
According to the ICIJ, it is difficult to say how much is hidden, but estimates have varied from $5.6 trillion to $32 trillion.
The International Monetary Fund has proclaimed that the use of tax havens costs governments worldwide up to $600bn in lost taxes each year.
According to Ms Kumar, it is destructive to the rest of society: “The ability to hide money has a direct impact on your life… it affects your child’s access to education, access to health, access to a home.”
The UK has been condemned for permitting property to be possessed by unidentified companies overseas.
In 2018, the government circulated draft legislation that would need the ultimate owners of UK properties to be announced. However, it is still waiting to be presented to MPs.
According to a 2019 parliamentary report, the UK system entices people “such as money launderers, who may wish to use property to conceal illicit funds”.
It explained that criminal investigations are frequently “hindered” because police cannot see who ultimately holds properties.
Recently, the government boosted the risk of money laundering through property from “medium” to “high”.
According to the government, it’s cracking down on money laundering with rigorous laws and enforcement, and that it will initiate a register of offshore companies occupying UK property when parliamentary time warrants.