For the better part of the last few decades, palm tree-laden tax havens and reticent Swiss Bankers were the subjects of Hollywood movies and novels involving spies, secret agents, and thousand year old mysteries. They were an open secret, flourishing as the curators of the money of the top 1%. That all began to change with the 2008 Crash of Wall Street when governments around the world began looking for funds as their tax collections began to dry out. Just as the United States and many other countries began pressuring countries like Switzerland to share information with them, many bankers, hackers, activists, and journalists in the past decade have been leaking information about said havens and their patrons. The Pandora Papers is the latest and the biggest such leak to date.
The Pandora Papers is a leak of 11.9 million documents that reveal hidden wealth, tax evasions, and, in some cases, money laundering schemes by some of the world’s rich and powerful people. More than 600 journalists in 117 countries have been combing through the files from 14 financial services for the past few months, finding many stories that are being published this week. These documents reveal offshore deals and assets of more than 100 billionaires, 30 world leaders, and 300 public officials. Some of the big examples here include –
Ex-United Kingdom Prime Minister Tony Blair and his wife had saved £312,000 in Stamp duty when they bought a London office through an offshore firm that owned the building for them.
The Russian President Vladimir Putin’s secret assets in Monaco, officially owned by an offshore company in the British Virgin Isles.
Key members of Pakistani Prime Minister Imran Khan’s inner circle, including cabinet ministers, their families, and major financial backers having secretly owned an array of companies and trusts holding millions of dollars of hidden assets.
The data was obtained by the International Consortium of Investigative Journalists in Washington DC and has led to one of the biggest ever global investigations.
Source: International Consortium of Investigative Journalists
The main question at hand is, how do individuals transfer money to these offshore firms?
All you need to do is set up a shell company in one of the countries or jurisdictions with high levels of secrecy. This is a company that exists in name only, with no staff or office. Some of the countries with high secrecy for these kinds of business transactions are Samoa, Belize, and the Cook Islands, alongside larger and more well-known tax havens like the British Virgin Islands, Switzerland, the Channel Islands, and many island nations in the Caribbean. A trust can then be bought with the help of offshore investment advisors. In most of the tax havens, these properties can be approved in as little as three days. Then a “nominee” will be appointed to run the shell company, who appears to be running the company but doesn’t do anything in reality. Then a bank account will be opened in a place different from where the company is located to avoid being cost and to transfer money around.