The Paradise Papers

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Estimated reading time: 4:30 minutes.

The Paradise Papers are breaking news this week on several mayor newspapers and news media around the world. They consist of documents showing the financial movements of many corporations and wealthy and influential individuals with the goal of avoiding taxes.

Where did they come from?
The documents leaked were sent to the German newspaper Süddeutsche Zeitung, the same paper that handled the Panama Papers leak last year. In volume, the Paradise Papers are the second largest document leak in history.

The German newspaper, instead of keeping the exclusive on this leak, chose to contact the

This is a case of investigative
reporting on a global scale.

International Consortium of Investigative Journalists for help. The Consortium got many media outlets and newspapers from around the world involved in the analysis of the documents before making them public. In total, 380 journalists from all over the world, 94 news outlets and 67 newspapers helped sort through the documents. With so many people working together, they were able to sort through all the documents before going public.

Why are they called ‘Paradise’ Papers? Where’s Paradise?
The difference between this document leak and previous ones is that the older ones referred to accounts located within one single company or country (like the Panama Papers), is that the Paradise Papers refer to funds routed through or saved in many different lax fiscal jurisdictions; hence the name Paradise. The countries in question are: Antigua and Barbuda, Bahamas, Barbados, the Cook Islands, the Cayman Islands, Dominica, Lebanon,

Many different tax havens
are mentioned.

Marshal Islands, Labuan, St. Kitts and Nevis, St. Lucia, Vanuatu, Samoa, Trinidad and Tobago, St. Vincent and Grenada. The documents leaked all have in common that they belong to the company Appleby, which is the one that created the tax evasion schemes for its clients.

What exactly do the Paradise papers contain?
They detail the many companies created by corporations and wealthy individuals to move money to different places across the globe with the purpose of not paying taxes in their own countries or jurisdictions. They’re similar to the Panama Papers but in one aspect. The Panama Papers detailed financial activity of questionable morality, yet perfectly legal in nature. The Paradise papers show many instances of fraudulent and illegal tax evasion, as well as numerous counts of money laundering by individuals and corporations.

Who is mentioned?
It splatters everywhere. There are politicians, actors, sports figures, aristocrats, companies and corporations. It’s a huge list with over 120,000 different names. But to mention a few:

• The names that irk me, personally the most: Citigroup, Bank of America, Wells Fargo (!), HSBC and Credit Suisse. But that’s not all: also moving money to avoid paying taxes are three of the Big Four; the Big Four are the world’s largest financial counseling, accounting and auditing firms. The three in question are Price Waterhouse Cooper (PWC), KPMG, and Ernst & Young.
• Bono, singer of U2

  

  Bono, singer of U2.

• Apple
• Nike
• Uber
• Madonna
• Elizabeth II, queen of England (speechless)
• Juan Manuel Santos, the current president of Colombia
• Lewis Hamilton, the many times Formula 1 world champion
• Several members of the current US administration
• The then campaign manager of Justin Trudeau, Prime Minister of Canada
• Facebook.

How much money are we talking about?
They cannot say exactly how much was evaded in taxes, because it depends on the tax system of each jurisdiction where they money should have been paid. But there is an estimated amount of money that was moved on behalf of these corporations:

$10,000,000,000,000 which is 10 trillion dollars.

Enough to fix world hunger in a completely sustainable way, climate change, and many other of the world’s greatest problems. That’s how I view it.

What will happen now?

The documents mention personalities
and corporations from all over the
world. They all had the same  financial
management firm.

Several things. The tax offices of the people and companies involved are already looking at the documents. Whether the people responsible go or don’t go to jail in the end, their reputations have suffered a big blow this week. It’s to be expected that the politicians caught will have to resign, and might end up in prison.

The ministers of the European Union met this Tuesday to discuss the legislative changes that must take place to provide more protection for the tax jurisdictions of the EU. By the end of this year it’s expected that they will vote on a series of measures against nations that are tax havens, including some nations within the European Union itself. Their intention is to start with public declarations against those nations that harbor accounts with the purpose of evading taxation, in order to use damage to their reputation as a dissuading factor; that would be the first step. If those prove fruitless, economic sanctions will be placed.

In conclusion
I understand that many of the nations that become tax havens do so because they’re poor, and by providing lower tax brackets as incentive they’re able to help their own economies. However, in many of those cases it isn’t the national economies that benefit, as much as the pockets of the politicians that govern those nations. Not just that, in today’s digital era, it is the new online world, open data, that is forcing the rest of the planet into transparency –as seen not just with this document leak but all the leaks that have taken place to date-; and, the opacity of tax havens, their money laundering activity, and tax evasion by people and companies won’t last much longer. I just hope that we see some changes sooner rather than later.

Remember! You have until tomorrow (Saturday the 11th at midnight EST) to like the OAS FCU Facebook page and participate in the raffle of one of 6 Gifts with a Purpose from the PADF Opportunity Shop! The winners will be announced on World Kindness Day.