More than 11m documents from the files of Panama law firm Mossback Fonseca, the world's fourth biggest offshore law firm, reveal the details of hundreds of thousands of clients using tax havens, including close associates of Vladimir Putin, president of the Russian Federation and members of the government of Iceland including Sigmundur Gunnlaugsson, prime minister, and his wife.

 

The records, which were obtained from an anonymous source by German newspaper "Süddeutsche Zeitung," cover a period of almost 40 years, from 1977 until last December. They are alleged to show that some companies domiciled in tax havens were used for suspected money laundering, arms and drug deals, and tax avoidance.

Deutsche Welle (DW) says that Georg Mascolo led the research for the "Süddeutsche Zeitung" and two German broadcasters on the basis of the data from the law firm's files. They shared the information with the International Consortium of Investigative Journalists (ICIJ), the international arm of the Center for Public Integrity, and a hundred other international news organizations. More than 370 journalists from 76 countries have spent a year going through the material.

Gerard Ryle, ICIJ director said:

I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents.

DW says the reports list 12 current and former national leaders — from Argentina, Georgia, Iceland, Iraq, Jordan, Qatar, Russian Federation, Saudi Arabia, Sudan, United Arab Emirate and Ukraine — among 143 politicians, their families and close associates known to use tax havens.

ICIJ says Lionel Messi, the world’s best soccer player, is also found in the documents. The records show Messi and his father were owners of a Panama company: Mega Star Enterprises Inc. This adds a new name to the list of shell companies known to be linked to Messi. His offshore dealings are currently the target of a tax evasion case in Spain.

Russian president Vladimir Putin's friend from childhood, the cellist Sergei Roldugin, was named as a key individual in a scheme to hide money from Russian state banks offshore — the Russian network.

Mauricio Macri, the new president of Argentina, Nawaz Sharif, Pakistan's prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine, are among the politicians named.

The BBC says that the prime minister of Iceland has been accused of hiding millions of dollars of investments in his country's banks behind a secretive offshore company.

Leaked documents show that Sigmundur Gunnlaugsson and his wife bought offshore company Wintris in 2007.

He did not declare an interest in the company when entering parliament in 2009. He sold his 50% of Wintris to his wife for US$1, eight months later.

He says no rules were broken and his wife did not benefit financially.

The offshore company was used to invest millions of dollars of inherited money, according to a document signed by Gunnlaugsson's wife Anna Sigurlaug Palsdottir in 2015.

Finfacts, Sept 2015: US$7.6tn hidden in tax havens - almost half annual US GDP

The ICIJ says:

Most of the services the offshore industry provides can be used for legal purpose and are by law-abiding customers. But the documents show that banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption. The files show that these fixers and middlemen protect themselves and their clients by concealing suspect transactions. In some instances, they work to head off official investigations by backdating and destroying documents.
The Panama Papers make it clear that major banks are big drivers behind the creation of hard-to-trace companies in the British Virgin Islands, Panama and other offshore havens. The files list more than 15,600 paper companies that banks set up for clients who wanted to keep their finances under wraps, including hundreds created by international giants UBS and HSBC.

Panama tax haven fraud, papers