The Panama Papers: The 8 Things You Need To Know
The Debrief: You’ll probably have heard of the Panama Papers by now. What exactly are they? Who’s involved and why does it matter?
You’ll probably have heard of the Panama Papers by now. What exactly are they? Who’s involved and why does it matter?
What Are the Panama Papers?
They are leaked files from Panama-based law firm Mossack Fonesca which reveal how the world’s wealthiest and most powerful people exploit offshore tax regimes to hide their money. 11 million documents have been leaked showing how money is moved around the world to offshore tax havens in places like Switzerland, Cyprus and the British Virgin Islands and even Guernsey, Jersey and the Isle of Man.
Who’s Involved in the Panama Papers?
72 current or former heads of state are linked to companies named in the documents, including Russian President Vladimir Putin and David Cameron’s late father, Ian Cameron.
Other national leaders who are implicated include Pakistan’s Prime Minister, Ayad Allawi, the former Prime Minister and Vice-President of Iraq, President of the Ukraine and the Prime Minister of Iceland, Sigmundur Davio Gunnlaugsson, who you might have seen looking rather uncomfortable as he stormed out of a TV interview today when asked about his involvement.
Who or what was the leak?
The law firm was set up by German-born Juergen Mossack and is reportedly one of the world’s biggest creators of ‘shell companies’ – these are basically companies which don’t actually function that people can use to move money about.
They have been exposed because of joint efforts by several media sources including the International Consortium of investigative Journalism (ICIJ) and the German newspaper Suddeutsche Zeitung who shared their information with international outlets including the Guardian and the BBC.
How are the Panama Papers bigger than WikiLeaks?
The Guardian, who broke the story in the UK, say ‘the leak is one of the biggest ever – larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013.’
Why should we care?
This is being referred to as ‘the biggest leak in history’ and shows how political leader have potentially moved millions of dollars around using tax havens while the rest of us play by the rules.
It’s not actually illegal though is it?
No, technically it’s not. The ICIJ said there was no suggestions that the individuals named in the Panama papers had done anything illegal. Using offshore facilities is completely legal and there can be legitimate reasons for doing so. However, in a speech last year David Cameron said ‘corrupt criminals and money launderers’ use offshore systems and anonymous companies to take advantage and dodge tax. The government are trying to set up a central register in this country which will show who the owners of such offshore companies are.
How does everybody feel about this?
People are, understandably, not impressed. Natalie Bennett, pointed out on Twitter:
Can understand young people asking why they should pay back student loans, given corruption exposed #panamapapers. 1% hasn't played by rules— Natalie Bennett (@natalieben) April 3, 2016
Will the Panama Papers change anything?
David Cameron is due to host a major summit to discuss the issue of offshore tax havens in May. More than half of the 300,000 firms listed as Mossack Fonseca clients were registered in British-administered tax havens.
Shadow Chancellor John McDonnell told the Mirror: 'The Panama papers revelations are extremely serious. Cameron promised and has failed to end tax secrecy and crack down on ‘morally unacceptable’ offshore schemes, real action is now needed.'
You might also be interested in:
Follow Vicky on Twitter @Victoria_Spratt
At work? With your gran?
You might want to think about the fact you're about to read something that wouldn't exactly get a PG rating