Pandora Papers: Wealth transferred 'within a few clicks' tax expert tells RFI

·3-min read

The Pandora Papers – the biggest leak of offshore data in history – continues to shake up the political and economic world amid revelations that 30 world leaders, 300 public officials and 100 billionaires have amassed huge secret wealth. One expert told RFI that digital technology made it possible to create a company and move funds anywhere in the world in just a few clicks.

The new investigation by the International Consortium of Investigative Journalists (ICIJ) and its partners, including the investigative unit of Radio France, shows that many wealthy personalities are still escaping taxes by using tax havens.

Some of the bigger names include Kenyan President Uhuru Kenyatta, King Abdullah II of Jordan, Czech Prime Minister Andrej Babis, former British prime minister Tony Blair and close aides of Russian President Vladimir Putin.

The cache includes some 11.9 million documents from 14 financial services companies hired by wealthy clients to create offshore structures in tax havens such as Panama, Dubai, Monaco, Switzerland and the Cayman Islands.

They show that Babis placed $22 million in shell companies that were used to finance the purchase of two mansions in the south of France.

Panama papers 'on steroids'

“This leak is really Panama Papers on steroids,” said ICIJ Director Gerard Rye in a video clip tweeted Sunday referring to the 2016 leak from a Panama law firm and corporate service provider.

“These documents, for the very first time, are actually showing the US as a tax haven itself.”

The Pandora Papers show that five years after the Panama Papers, the page has yet to be turned on tax corruption and that offshore fraud mechanisms are unchanged, Paris-based tax lawyer Alfred Lortat-Jacob told RFI.

"There is a real competition in these offshore centres to attract as much capital as possible. Dubai, Singapore, Hong Kong ... They all have the capacity to attract capital by way of tax evasion – which is prohibited – but also by tax optimisation, which is not prohibited,” Lortat-Jacob said.

Digital technology had made it possible to create a company anywhere in the world in just a few clicks, and to transfer funds, Lortat-Jacob added. “That's the novelty we are witnessing today."

Meanwhile Quentin Parrinello, head of tax justice at Oxfam France, told France Info radio: “This is shocking, especially … considering we are emerging from a huge health crisis.”

US emerges as new tax haven

RFI’s New York correspondent, Carrie Nooten, said that despite launching a “witch hunt” against offshore funds between 2007 and 2010, the United States itself had become one of the preferred destinations for those who want to hide their money.

Delaware, Nevada, Wyoming and South Dakota were among the biggest offshore financial centres on the planet, Nooten reported.

All had liberal laws in place allowing funds to accept billions of dollars in assets, and were registering a thriving business of "trusts" that guarantee anonymity and allow the wealthy to evade taxes.

The revelations are being reported as a double standard given US President Joe Biden’s earlier promises to lead international efforts to make the global financial system more transparent.

“All these companies can only operate with the permission, tacit or explicit, of the world's economic powers, including the United States,” Alex Cobham, executive director of the British-based Tax Justice Network told RFI.

“US President Joe Biden, his Treasury Secretary Janet Yelen and other members of his administration have made it clear that they want to put an end to foreign tax havens and their opaque system.

“They have to prove that they were serious.”

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