Panama Papers: The transparency imperative
The world needs to get to grips with the offshore sanctuaries
“The world is only going to become more and more transparent as we move forward.” – Jim Yong Kim, president of World Bank.
The International Consortium of Investigative Journalists (ICIJ), which includes The Irish Times and 370 journalists from 80 states, published a database last night revealing more than 360,000 names of people and companies behind secret offshore structures established through the Panama-based law firm Mossack Fonseca (MF). It is a landmark moment for journalism and global economic transparency.
The release over the last month of details of the largest haul of data on offshore companies has already had a major impact, lifting the veil on practices that facilitate widespread tax evasion and sap at the ability of exchequers to pay for public services, and have provided cover for politicians, arms and drug dealers, and fraudsters to conceal massive wealth. Twelve world leaders have been shown to have salted away millions offshore.
There is nothing in itself illegal in putting money into offshore accounts and businesses. We are not suggesting that any of those Irish business figures or companies named by us and the ICIJ as having connections with MF have acted illegally or improperly. Among those named, however, some may complain that we are intruding into their private affairs. But there is a clear public interest in these revelations.
Last year, the Revenue made almost half a million compliance and audit interventions, yielding some €642 million in tax, interest and penalties, and in the 2016 budget, it received extra funding for such activities. This may be used, as its chairman Niall Cody has suggested, to help “shine a light on individuals and businesses that have used offshore facilities”.
The release of the Panama Papers has already borne fruit in resetting the international agenda on an intermittent debate on the need for public registries of information on the ultimate beneficial ownership of companies. The US government has announced that it will legislate to create a centralised federal registry of the real owners of newly created companies. The UK has made disclosure of beneficial ownership mandatory and public, and, crucially, its overseas territories have agreed to share that information in some circumstances. Australia and Germany will follow suit.
This week in London British prime minister David Cameron hosts an important international anti-corruption conference. The Panama Papers will be at the centre of its discussions and it will hear an appeal from 300 world-renowned economists to get to grips with the offshore sanctuaries. “Territories allowing assets to be hidden in shell companies or which encourage profits to be booked by companies that do no business there are distorting the working of the global economy,” they warn.They should be heeded.