The European Parliament plans to spend its afternoon session on April 12 discussing the Panama Papers. Here is a link to live TV coverage.
The New York Times today continues the topic of what the Panama Papers tell us about how the fine-art market works.
The International Consortium of Investigative Journalists, citing the documents, reported last week that the Russian billionaire collector Dmitry E. Rybolovlev used an offshore holding entity, created by Mossack Fonseca, to move his collection out of his wife’s reach during divorce proceedings.
Mr. Rybolovlev’s lawyers denied that the divorce had anything to do with his decision to transfer ownership of his art to the entity, Xitrans Finance Ltd., which he had established in the British Virgin Islands in 2002.
Mr. Rybolovlev’s wife, Elena, filed for divorce in 2008. According to the article, during the legal battle that ensued, correspondence sent to Mossack Fonseca stated that Mr. Rybolovlev used Xitrans to move his collection out of Switzerland to Singapore and London.
In a statement last week, the Rybolovlev family trust’s lawyer said the offshore arrangements “were set up completely legitimately for the purposes of asset protection and estate planning” and had been publicly disclosed in numerous publications worldwide.
Mr. Rybolovlev has spent more than $2 billion on museum-quality works byLeonardo da Vinci and other masters. He bought them with the help of Yves Bouvier, a Swiss art dealer and businessman who runs a storage facility at the Geneva Freeport, a warehouse complex. Mr. Rybolovlev has accused Mr. Bouvier of defrauding him in the purchases, a charge that Mr. Bouvier has denied.
Here's a big and very readable interview with Mar Cabra, editor of the Data and Research Unit of the International Consortium of Investigative Journalists (ICIJ), about the challenges of working with so much data.
Working with this data has been challenging for many different reasons. The first reason is, it’s huge—we’re talking about 2.6TB. The second reason is that it didn’t all come at the same time; we didn’t receive a 2.6TB hard drive. We had to deal with incremental information, and we also had to deal with a lot of images. The majority of the files are emails and database files. There are also a lot of PDFs and TIFFs, so we have to do a lot of OCR-ing for millions of documents.
So first, most of the leak was unstructured data. Second, it was not easy working with the structureddata. The Mossack Fonseca internal database didn’t come to us in the raw, original format, unfortunately. We had to do reverse-engineering to reconstruct the database, and connect the dots based on codes that the documents had.
We’ve had to do that with every leak we’ve received: We had to do it with Offshore Leaks in 2013, we had to do it with Swiss Leaks last year, and we had to do it again this year. Our programmer, Rigoberto Carvajal, is a true magician, because he has become an expert in reverse-engineering databases. He and Miguel Fiandor reverse-engineered the database, reconstructed the Mossack Fonseca internal files, and put it into a graphed-database format. And that’s the base of what we’re going to be doing in the new Offshore Leaks database—the improved version.
Suedeutsche Zeitung is reporting that the CIA and other secret services made "wide use" of the services of Panamanian law firm Mossack Fonseca.
The Munich-based newspaper said Mossack Fonseca’s clients included “several players” in the 1980s Iran-Contra scandal, which saw senior US officials facilitate secret arms sales to Iran in a bid to secure the release of American hostages and fund Nicaragua’s Contra rebels.
The Panama Papers also reveal that “current or former high-ranking officials of the secret services of at least three countries... Saudi Arabia, Colombia and Rwanda” are listed amongst the company’s clients, the Sueddeutsche said.
Christine Lagarde, head of the International Monetary Fund, says it is time to "think outside the box" when it comes to tax policy. She expressed interest in an idea put forward by the charity Oxfam last year to create a "UN global tax body" that would give both wealthy and developing countries an equal voice in combating tax loopholes and tax havens.
She warned, however, that nation states would be unwilling to surrender their tax powers to the UN.
“We need to be aware of the massive hurdles and obstacles along the way because taxation for the last century or so has been defined, conceptualised, designed, implemented on a purely territorial sovereign basis. And if anything, levying taxation is considered as an attribute of sovereignty, and anything that takes away from that is going to be very strongly opposed by many countries in the world, many forces.”
Good morning! RFE/RL resumes its Panama Papers Live Blog coverage with this OCCRP piece on what the leak tells us about the Czech Republic.
The small Czech Republic looms large on the global scale of offshore business schemes. More than a quarter-million documents in the Mossack Fonseca trove have a Czech connection, while nearly 300 Czech clients and shareholders appear in the Panama Papers.
Among them are people prosecuted and sentenced for financial crimes, lobbyists, diamond traders or people linked to the biggest privatization and corruption scandals of the past two decades.
Money laundering requires a cooperative bank. Agents at Mossack Fonseca liked using a Czech bank called eBanka, now closed, on its list of banks who do not take the anti-money laundering resolutions too seriously. Such banks are willing to be flexible about rules and open bank accounts for murky companies from notorious tax-haven destinations such as the Pacific islands of Niue or Vanuatu. The list includes not only small regional or obscure banks, but also big international and respected banking houses.
In this respect, eBanka was one of the least discerning banks in the country. In one Mossack Fonseca email, an agent spelled it all out:
“Please understand that there is practically no bank in the World anymore, which still opens bank accounts in the name of offshore companies without the knowledge about the real ‘ultimate beneficial owner’ (UBO). Not even Panamanian banks do this, let alone Hong Kong. A major part of my work revolves around finding banks which have fairly relaxed conditions, but I have only come across one bank in the Czech Republic which opens accounts without info regarding the UBO (…) The only bank where we ever managed to open an account without naming the UBO at all was eBanka (Czech Republic).”U.K. Chancellor George Osborne has made public his 2014-15 tax return, in response to the Panama Papers scandal.
Mr Osborne said he had decided to publish his tax return this year in an unprecedented show of transparency, after David Cameron released details of his financial affairs back to 2010 after it was disclosed his father had run an offshore trust.
The Prime Minister's decision to release the information put increasing pressure on Mr Osborne to give details of his own affairs.
Earlier on Monday, a Downing Street spokeswoman said Mr Cameron was of the view that the Chancellor should also release his tax returns.
She said: "Those in charge of the nation's finances should show transparency too."
Labour Party leader Jeremy Corbyn also released his tax return this afternoon.
The address in the U.S. state of Delaware that is the official home address of more than 285,000 shell companies.
Anti-secrecy advocates say the building is prime evidence that Delaware has become a corporate haven that’s comparable to more well-known, offshore locales.
“If you imagined a building with 1,000 corporations in it, you’d imagine a building like the Empire State building,” said Richard Phillips, a senior policy analyst with Citizens for Tax Justice. “But apparently 285,000 companies claim [1209 North Orange Street] is their address.”
“What this shows is this is not really the address of companies that are doing real business. This is the address of a lot of companies that are just shell companies,” he added. “In this case, it doesn’t even look like they have mailboxes. They just claim that address as the places they’re doing business, even though they’re not doing business there.”
British journalist Peter Kellner writes for Prospect that we need to stop using the term "tax avoidance."
Let us ban the term “tax avoidance.” Instead, decide which of two terms to apply. We should say “tax planning” when describing activities in keeping with the spirit of the law, and “tax dodging” to describe activities that are technically legal but designed to circumvent the spirit of the law. “Tax planning” includes opening an ISA account, putting money into a pension fund—and giving your son £200,000 more than seven years before you die. “Tax dodging” is the kind of thing the comedian Jimmy Carr, among others, confessed to a few years ago. The scheme used by Carr was called K2, which sees earners “quit” their jobs and sign employment contracts with offshore shell companies. These companies then pay them lower salaries but “loan” them money in addition. These loans can be written down as tax liabilities.