An investigation published by an international coalition of more than 100 media outlets, based on 11.5 million records of offshore holdings, details how politicians, celebrities and other famous people use banks, law firms and offshore shell companies to hide their assets.
The International Consortium of Investigative Journalists, a nonprofit organisation based in Washington, said an anonymous source provided internal documents from the Panama-based law firm Mossack Fonseca, one of the world's biggest creators of shell companies. Ramon Fonseca, a co-founder of Mossack Fonseca, said the documents were obtained illegally by hacking but confirmed that many of them were real. He denied his firm has engaged in any wrongdoing.
Six peers, three Tory ex-MPs and “dozens” of UK political party donors - whose names have not yet been released - are reported to be among scores of global politicians including national leaders identified as holders of offshore assets.
Among the countries with past or present political figures named in the reports are Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina.
This is a look at offshore accounts and how they are used:
1. WHAT ARE OFFSHORE ACCOUNTS?
Offshore bank accounts and other financial dealings in another country can be used to evade regulatory oversight or tax obligations. Companies or individuals often use shell companies, initially incorporated without significant assets or operations, to disguise ownership or other information about the funds involved.
2. WHERE ARE MOST OFFSHORE ACCOUNTS?
Panama, the Cayman Islands and Bermuda are among more than a dozen small, low-tax locations that specialize in handling business services and investments of non-resident companies.
3. LEGITIMATE USES FOR OFFSHORE ACCOUNTS:
Companies or trusts can be set up in offshore locations for legitimate uses such as business finance, mergers and acquisitions and estate or tax planning, according to the global money laundering watchdog, the Financial Action Task Force.
4. ILLICIT USES OF OFFSHORE ACCOUNTS:
Shell companies and other entities can be misused by terrorists and others involved in international and financial crimes to conceal sources of funds and ownership. The ICIJ says the files from Mossack Fonseca include information on 214,488 offshore entities linked to 14,153 clients in 200 countries and territories.
5. EFFORTS TO CRACK DOWN ON FINANCIAL HAVENS:
The Financial Action Task Force and other regulatory agencies publish assessments identifying weaknesses in enforcement of anti-money laundering and counter-terrorism financing efforts of specific countries and territories. Financial and legal professionals get training on how to spot potential violations, since in some cases lawyers and bankers are unaware they are handling illicit transactions. The EU has stepped up efforts to crack down on tax avoidance by multinational corporations.
6. PAST SCANDALS OVER OFFSHORE ACCOUNTS:
Banking secrecy laws can obscure offshore financial dealings. But the disclosure of other leaked documents by the ICIJ and other organisations in late 2014 drew attention to sweet tax deals offered by the tiny European country of Luxembourg to multinational companies and ultra-wealthy individuals. In the 1980s, the Bank of Credit and Commerce International, an international bank founded by a Pakistani financier, was implicated in wide-scale money laundering and other illegal financial dealings.
7. WHO'S IMPLICATED IN THE PANAMA PAPERS?
Johnny Green/PA Archive
David Cameron's late father, Ian, is reportedly named as a client of the firm. It is understood he used the firm at the centre of the scandal, Mossack Fonseca, to protect his investment fund, Blairmore Holdings, from UK taxes as he built up a significant legacy, part of which was inherited by the Prime Minister.The Guardian has reported the offshore fund avoided ever paying tax in the UK
by hiring residents of the Bahamas to sign its paperwork.
"Cameron promised and has failed to end tax secrecy and crack down on 'morally unacceptable' offshore schemes; real action is now needed," shadow chancellor John McDonnell said.
Ian Cameron passed away in 2010.
David Cameron did not respond to a request for comment.
US author and business guru, Marianna Olszewski, enlisted the help of Mossack Fonseca
in order to access some of her personal fortune invested in an offshore account.
The bank that held the funds would not release the money unless they knew the identity of the person behind the company and Olszewski wished to remain anonymous.
Mossack Fonseca arranged for the company to be listed under the name of someone else - a 90-year-old British millionaire - in return for thousands of pounds a year in fees.
Andrew Mitchell QC told the BBC: "Anybody looking at all these documents will believe that it is entirely legitimately owned by this person.
"Mossack Fonseca are prepared to go to that length in order to assist their client. Basically creating a real, live human being to look to the world as if they own the assets, when in fact and in truth, they know, as their client knows, that that person is a sham."
Johnny Green/PA Archive
Baroness Pamela Sharples is named as having links to Mossack Fonseca through Nunswell Investments Limited of which she became sole shareholder in 1995. In 2013 she is alleged to have discussed if it "made sense to defer a distribution from her Nunswell account, if she didn't need the funds, to postpone paying taxes on it".
The law firm currently handling her affairs said she had "no remuneration...nor any income or capital from that company".
Chris Young/PA Archive
Michael Mates has been linked to Mossack Fonseca though his position as chairman of Haylandale Limited which invested in property development in the Caribbean archipelago.
Mates denied any wrongdoing claiming he had not and would not receive any remuneration "unless and until the development took place, nor were the shares of any value". He also claims the company "never really had any value".
HM Revenue and Customs has approached the International Consortium of Investigative Journalists (ICIJ) for access to the data and said it would "act on it swiftly and appropriately".
Lionel Messi and his father, Jorge Horacio,
were the ultimate beneficial owners of the Mossack Fonseca-registered Mega Star Enterprises. Although there is nothing illegal in owning an offshore company, both men are currently on trial for tax evasion.
ChinaFotoPress via Getty Images
Martial arts movie star Jackie Chan
is reported as having having at least six offshore companies managed through Mossack Fonseca
As yet there is no suggestion his accounts were used for the purpose of tax avoidance.
Andres Stapff / Reuters
Juan Pedro Damiani, a Uruguayan lawyer, is a member of Fifa's ethics committee - the same group currently charged with reforming the organisation after recent corruption scandals.
Damiani is not accused of doing anything illegal, but a spokesman for Fifa told the BBC
: "We confirm that on 19 March the investigatory chamber of the independent ethics committee was informed by the chairman of the adjudicatory chamber, Hans-Joachim Eckert, about becoming recently aware of a business relationship between the member of the adjudicatory chamber Juan Pedro Damiani, and Eugenio Figueredo Aguerre."After receiving the information Dr Cornel Borbely, chairman of the investigatory chamber of the ethics committee, has immediately opened a preliminary investigation to review the allegations in question. Dr Borbely is currently looking into said allegations in order to determine if there is a breach against the Fifa code of ethics and decide any further measures."
Icelandic Prime Minister Sigmundur Davio Gunnlaugsson is accused to having undeclared interests in one of the banks bailed out during the country's devastating financial crash that began in 2008. He and his wife are alleged to have bought an offshore company, Wintris, in 2007 which was used to invest millions of dollars of inherited money. Since becoming PM in 2013, he has been involved in talks which could have affected the value of Wintris shares.
In March, Gunnlaugsson was asked if he had ever owned an offshore company. He said: “Myself? No. Well, the Icelandic companies I have worked with had connections with offshore companies, even the — what's it called? The worker's unions. So it would have been through such arrangements, but I have always given all of my assets and that of my family up for taxes."
Among the countries with past or present political figures named in the reports are Ukraine, Pakistan, Saudi Arabia, Russia and Argentina.
Gunnlaugsson did not respond to questions in light of the revelations.
Mikhail Svetlov via Getty Images
Sergey Roldugin, a close friend of Vladimir Putin, is a world-renowned musician and the Artistic Director of the St. Petersburg House of Music.
He was also an owner of three offshore companies.
Roldugin did not respond to questions.
Putin's spokesman claimed that the Russian president was the "main target" of the investigation, which he suggested was the result of "Putinophobia" and aimed at smearing the country in a parliamentary election year. The ICIJ has links to the US government, Dmitry Peskov suggested."I don't consider it possible to go into the details" of allegations that Putin's friends ran an offshore scheme, Peskov told reporters, "mainly because there is nothing concrete and nothing new about Putin, and a lack of details." He added that Rodulgin was a friend of Putin's but that the president "has very many friends."
Peskov, who had last week foreshadowed the disclosure of the documents by warning of an upcoming "information attack" on Putin, said Monday he expected more reports to follow.
(A detailed list of all those implicated so far can be found at The International Consortium of Investigative Journalists and an explainer for offshore accounts follows this list.)