The Pandora Papers, a leak of more than 11.9 million files from offshore service providers, reveal the widespread involvement of Swiss advisory firms in the set up of shell companies in tax havens.
The recent Pandora Papers contain far more information than the Panama Papers, which were leaked in 2016 and resulted in the fall of prime ministers in Iceland and Pakistan.
The Panama Papers came from a single source, the Panamanian law firm Mossack Fonseca. The Pandora Papers come from 14 sources and reveal the real owners of more than 29,000 offshore companies, including 35 current and former world leaders and more than 336 politicians in 91 countries and territories. Gerard Ryle, from The International Consortium of Investigative Journalists (ICCJ), described the leak as the Panama Papers on steroids. The ICCJ says it has shared the documents with 150 media partners.
In most countries, it’s not illegal to own assets or companies offshore. They can be used in legal ways to structure global business and navigate complex and sometimes conflicting global tax rules. However, they also allow profit shifting and can be used to launder and hide money from crime and illegal deals or to hide the proceeds of legitimate activities that should be known to the public or reported to tax authorities.
According to ICCJ, the leaked documents include information on more than 90 Swiss advisers, which include legal, notary and consulting firms.
From 2005 to 2016, at least 26 Swiss firms that appear in the documents provided services to clients whose offshore companies were later investigated by authorities looking for evidence of money laundering and other financial crimes, wrote Scilla Alecci, a journalist for the ICCJ. In most of the cases, the firms played the role of introducer, connecting clients to offshore service providers, she wrote.
One Swiss advisor in particular, the Fidinam Group, is highlighted by the ICCJ, which says the group has exploited gaps in the country’s regulatory system to help people hide money from tax authorities and courts. Since the early 2000s, Fidinam has worked with Alcogal, a Panamanian law firm, to create more than 7,000 shell companies for its international clientele, according to Alecci.
In a statement to ICIJ, Fidinam, which has branches in Lugano, Zurich and Geneva, said its “Swiss subsidiaries comply and have been complying diligently with the legal and regulatory provisions in force in Switzerland and with the applicable international regulations.”
The Pandora Papers reveal offshore deals across the globe. According to Gerard Ryle, “These documents for the very first time are actually showing the US as a tax haven…”
ICCIJ article (in English)