Panama Leaks

  • By Aminah Hafiz


The largest financial leak of the modern era


The Panama leaks aka the Panama papers are an unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ subsiquently shared them with a large network of international partners such as The International Press and Media Group.

What exactly do the Panama leaks reveal?

The documents revealed the myriad of ways in which the world’s super wealthy can and do, exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens, including the family of the current UK Prime Minister, David Cameron.

Among national leaders with hidden offshore assets are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson.

Davíð Gunnlaugsson was forced to resign as a result of the leaks. 

In the UK, six members of the House of Lords, three former Conservative MPs and dozens of donors to British political parties have had offshore assets. David Cameron became the target of heated protests to force his resignation after giving four, highly inconsistent explanations as to his family’s involvement.

A substantial percentage of London’s corporate and luxury infrastructure and real estate is owned by Royal Families of other nations via the use of offshore companies. Whilst this was initially done to preserve the privacy of the owners so it was not easily known to the public which buildings exactly that owned for security reasons, this system has since become highly abused.

What is Mossack Fonseca?

Mossack Fonseca is a Panama based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management. The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries.

Mossack Fonseca has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies of Guernsey, Jersey and the Isle of Man which are, separately not part of the UK but benefit from uniquely close economic relationships.

It emerged that the countries with the most and largest beneficiaries of  these somewhat questionable fiscal proceeds were; UK, China and Russia.

The way in which the markets and people in these nations react is yet to be seen in it’s full extent. However Iceland has forced it’s PM out already and the UK public are protesting in the streets calling for a general election after yet another scandal involving David Cameron has gained international media attention.

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