Panama Papers – Frequently Asked Questions

Termed as the biggest leak in the history, Panama Papers reveals the set of 11.5 million documents and 2.6 terabytes of information.  The documents link at least 12 current and former heads of State and 143 other politicians to illicit financial transactions.

Jul 28, 2017 17:13 IST
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Panama Papers Frequently Aksed Questions All You need to Know =On 28 July 2017, Nawaz Sharif became the second head of a government to step down from the office amidst the political fallout of the Panama Papers revelations. In April 2016, Iceland Prime Minister Sigmundur Gunnlaugsson had to quit the Prime Ministership just two-days after his name appeared in the Papers that showed that Gunnlaugsson had an undeclared interest linked to his wife's wealth.

As the Panama Papers are expected to dominate the public scene for some more time to come, we are providing all the details related to the documents called Panama Papers.

What are the Panama Papers?

It is a massive leak of 11.5 million documents of a Panamanian law firm - Mossack Fonseca. The documents, in April 2016, revealed how the clients of Mossack Fonseca were able to launder money, dodge sanctions and avoid tax.

Why the leak created a buzz across the world?

The leak has sent shock waves across the world as it contained names of some of the world’s richest people, politicians and celebrities and their kith and kin.

The documents link at least 12 current and former heads of State and 143 other politicians to illicit financial transactions.

Apart from relatives of Sharif and Sigmundur Gunnlaugsson, other prominent names figured in the leak are - aides to Russian President Vladimir Putin, Malaysian Prime Minister Najib Razak's son Nazifuddin, family of Chinese President Xi Jinping, former Chinese Premier Li Peng's daughter Li Xiaolin, the President of Ukraine and celebrities including Barcelona forward Lionel Messi.

The scandal also touched football's world governing body, FIFA. The leak has also revealed that more than 500 banks, including their subsidiaries and branches, registered nearly 15,600 shell companies with Mossack Fonseca.

India Connection

As per an estimate, around 2000 Indian names figured in the leaked documents. Some of the prominent names that are said to be included in the list are – Amitabh Bachchan, Aishwarya Rai & Family, KP Singh & Family (DLF) and Sameer Gehlaut (Indiabulls). However, they denied the link with Mossack Fonseca.

How the papers got leaked?

The leak came in news on 3 April 2016 after a German newspaper Suddeutsche Zeitung published a report on the same. It said that Mossack Fonseca, one of the world's most secretive offshore law firms, operated with impunity for decades in its efforts to help clients launder money and avoid tax.

The newspaper said over a year ago, an anonymous source contacted it and submitted encrypted internal documents from Mossack Fonseca that sells anonymous offshore companies around the world.

The newspaper shared the documents with Washington-based International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners. In total, some 107 media outlets in 78 countries investigated the data.

How large is the data?

Termed as the biggest leak in the history, Panama Papers reveals the set of 11.5 million documents and 2.6 terabytes of information. It provides detailed information (identities of shareholders and directors of the companies) about more than 214000 offshore companies listed in corporate service provider Mossack Fonseca. The leak is larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. The leaked data covered nearly 40 years, from 1977 through the end of 2015

Impact of the leak

The leak had a huge impact across the world. Few of the instances are -

• Indian Prime Minister Narendra Modi ordered an inquiry, and subsequently the government announced that it constituted a special multi-agency group comprising officers from the investigative unit of the Central Board of Direct Taxes and its Foreign Tax and Tax Research division, the Financial Intelligence Unit and the Reserve Bank of India.

• Two days after the initial media coverage of the scandal, the Prime Minister of Iceland, Sigmundur Gunnlaugsson, resigned from his office.

• Many countries, including Colombia and France, declared Panama as a tax haven for individuals and businesses. The declaration helps the governments in curbing tax evasion and in pressurizing the Central American country to sign a financial information-sharing agreement.

• The president of the Chilean branch of Transparency International, Gonzalo Delaveau, resigned after documents from a Panamanian law firm showed he was linked to at least five offshore companies.

More about Mossack Fonseca

• Mossack Fonseca & Co. is a Panamanian law firm and corporate service provider with more than 40 offices worldwide.

• The firm, which was founded in 1977, is a leading global company which provides comprehensive legal and trust services.

• It specializes in commercial law, trust services, investor advisory and international structures. It also offers intellectual property protection and maritime law services.

• It operates in tax havens, including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.

About ICIJ

• The International Consortium of Investigative Journalists (ICIJ) is a global network of more than 200 investigative journalists in 70 countries who collaborate on in-depth investigative stories.

• Founded in 1997 by the respected American journalist Chuck Lewis, ICIJ was launched as a project of the Center for Public Integrity, focusing on issues that do not stop at national frontiers: cross-border crime, corruption, and the accountability of power.

• In addition to ICIJ’s in-depth reporting, the consortium plays a key role in bringing together investigative journalists from around the world.

• In April 2017, the ICIJ  was conferred with the prestigious Pulitzer Prize for exposing the malpractices in offshore tax havens in Panama Papers.

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