DUMMIES’ GUIDE TO THE PAR­ADISE PAPERS

Financial Mail - - COVER STORY -

Where did this leak come from?

It was ob­tained by Ger­many’s largest daily news­pa­per, Süd­deutsche Zeitung. The data in­cludes 13.4m doc­u­ments (1.4 ter­abytes) from two off­shore ser­vice providers, Ap­pleby and Asiac­iti Trust, and from the com­pany reg­is­ters of 19 tax havens.

Where does the name Par­adise Papers come from?

From the fact that all the places in­volved are so-called tax havens or “tax par­adises”.

Who leaked it?

Be­cause of the need to pro­tect its sources, the news­pa­per is un­able to pro­vide in­for­ma­tion about who supplied the papers.

But the law firm Ap­pleby says it was hacked. Is that true?

The Süd­deutsche Zeitung can’t ver­ify this claim. The pa­per re­ceived the data through le­gal chan­nels and eval­u­ated them jour­nal­is­ti­cally.

What’s dif­fer­ent be­tween these and the Panama Papers?

In con­trast with the Panama Papers, these papers con­tain de­tails of multi­na­tional cor­po­ra­tions that use the off­shore sys­tem. Among Ap­pleby’s clients are com­pa­nies like Nike, Ap­ple, Face­book, Wal­mart, Al­lianz, Siemens, Mcdon­ald’s and Ya­hoo.

How did the me­dia col­lab­o­ra­tion work?

The Süd­deutsche Zeitung shared the data with the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists in Washington so other out­lets could par­tic­i­pate in the re­port­ing — in­clud­ing am­ab­hun­gane and the Fi­nan­cial Mail in SA.

Are all of the peo­ple and com­pa­nies in the Par­adise Papers en­gaged in crim­i­nal ac­tiv­i­ties?

No. Much of the ac­tiv­ity is le­gal — such as when multi­na­tion­als use sub­sidiaries in tax havens to re­duce the amount of profit they re­port. Pri­vate peo­ple who set up an off­shore com­pany, re­port it to the au­thor­i­ties and pay tax on their prof­its don’t usu­ally run into prob­lems. But if shell com­pa­nies are broadly le­gal, why is this such a big deal?

Just be­cause some­thing is le­gal doesn’t mean it’s le­git­i­mate or moral. The fact that al­most ev­ery coun­try loses out on bil­lions each year through le­gal tax avoid­ance is a pub­lic in­ter­est is­sue. It is money that could be used for hos­pi­tals, schools and roads.

Have pre­vi­ous leaks had any ef­fect?

Ear­lier rev­e­la­tions such as Luxleaks (2014), Swiss Leaks (2015) and the Panama Papers (2016) trig­gered dis­cus­sions about the dan­gers associated with tax havens. The Panama Papers changed a lot: two prime min­is­ters were forced to re­sign (in Ice­land and Pak­istan) and there was an EU in­ves­tiga­tive com­mit­tee and tighter laws in sev­eral coun­tries.

Will all the names be pub­lished?

No. The Süd­deutsche Zeitung will not pub­lish all of the names in the Par­adise Papers. This is be­cause in the case of many of the com­pa­nies and pri­vate in­di­vid­u­als that ap­pear there is no ob­vi­ous pub­lic in­ter­est.

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