Paradise Papers expose tax haven secrets of ultra-wealthy

 06 Nov 2017 - 12:25

Paradise Papers expose tax haven secrets of ultra-wealthy
A file photo of British Prime Minister Theresa May. Reuters.

IANS

London, A huge new leak of financial documents has revealed how the powerful and ultra-wealthy, including Britain's Queen Elizabeth II's private estate, secretly invest vast amounts of cash in offshore tax havens, media reports said on Monday.

The details come from a leak of 13.4 million files on Sunday that expose the global environments in which tax abuses can thrive - and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ) with 100 other media organisations including the Guardian, the BBC and The New York Times.

Some of the revelations in the Paradise Papers include millions of pounds from Queen Elizabeth II's private estate that has been invested in a Cayman Islands fund and some of her money that went to a retailer accused of exploiting poor families and vulnerable people.

It details extensive offshore dealings by US President Donald Trump's cabinet members, advisers and donors, including substantial payments from a firm co-owned by Russian President Vladimir Putin's son-in-law to the shipping group of the US Commerce Secretary, Wilbur Ross.

The leak shows how social media giants Twitter and Facebook received millions in investments that can be traced back to Russian state financial institutions along with ggressive tax avoidance by multinational corporations, including Nike and Apple.

It also includes information about a tax-avoiding Cayman Islands trust managed by the Canadian Prime Minister Justin Trudeau's chief wealth manager.

The leak also includes how some of the biggest names in the film and TV industries protect their wealth with an array of offshore schemes and the complex offshore webs used by two Russian billionaires to buy stakes in Arsenal and Everton football clubs.

The disclosures will put pressure on world leaders, including Trump and British Prime Minister Theresa May, who have both pledged to curb aggressive tax avoidance schemes.

The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality.

Offshore finance is about a place outside of one's own nation's regulations to which companies or individuals can reroute money, assets or profits to take advantage of lower taxes, reports the BBC.

These jurisdictions are known as tax havens to the layman, or the more stately offshore financial centres (OFCs) to the industry. They are generally stable, secretive and reliable, often small islands but not exclusively so, and can vary on how rigorously they carry out checks on wrongdoing.