Discuss about the Law for International Consortium of Investigative Journalists.
The panama papers are those documents which are recognized as an unpredictable leak of 11.5m files from the database of Mossack Fonseca, which is the 4th largest law firm of the world. These records were received by the German newspaper Süddeutsche Zeitungfrom an anonymous source, and this newspaper shared the records with the International Consortium of Investigative Journalists (ICIJ). Then these records were shared by ICIJ with large number international partners, which also include the Guardian and the BBC. This leak shows how the rich and powerful people use the tax havens to hide their wealth, and these documents are reliable because they are related to the database of the world’s most secretive companies that is a Panamanian law firm.
In this report, firstly we state about the panama papers and other topics related to these papers. Subsequently this report is concluded with brief conclusion.
As stated above, panama papers are the biggest leak of the 11.5m files, and these files show how clients of Mossack Fonseca are laundering the money, dodge sanctions, and avoid tax. There is one case in which company offered fake records of ownership related to American millionaire for the purpose of hiding money from their authorities. This case is a direct breach of an international regulation which was designed to stop money laundering and hide money.
This leak is the biggest leak of the history, and data related to this leak was released in 2010 by the Wikileaks organisation. Amount released by Wikileaks related to this data is equal to the population of San Francisco, and amount related to data of panama papers is equal to the population of India (BBC News, 2016).
This leak shows how the rich and powerful people hide their wealth and money by using tax havens. The leak was of eleven billion documents from the company which is considered as world’s most secretive companies which shows how this law firm helps their client’s in money laundering, dodge sanctions and also in tax evasions.
Mossack fonseca is the law firm based on panama and this firm mainly provided the services of incorporation of companies in offshore jurisdictions such as the British Virgin Islands. They receive yearly fee for administering the offshore firms, and also provide services related to wealth management. This firm is based in panama but it conducts its operation in all over world. Website of this company includes global network of 600 peoples who are working in 42 countries, and this company also have various franchisees around the world where affiliates which are separately owned by someone is set up create new customers and they have exclusive right to use the brand name. This company conducts its operations in varius tax havens such as Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.
As per the company, they are conducting these activities from last 40 years and they have never being charged for criminal offence. Company further stated that offshore companies are used for the purpose of legitimate transactions through due diligence and company also regrets on misuse of its services (BBC, 2016). Tax revenue was increased by the president of French, Francois Hollande for those who commit fraud.
These documents reveal the name of 12 current or former state heads, and also name of sixty peoples who are related with the current or former leaders of the world such as Prime Minister of Icelandic, Sigmundur David Gunnlaugson, who had interest related to wealth of his wife and such interest is not declared.
Papers also include the name of brother-in-law of China’s President Xi Jinping, and president of Ukraine President Petro Poroshenko, president of Argentina Mauricio Macri, the late father of UK Prime Minister David Cameron, and also the three children’s of Prime Minister of Pakistan that is Nawaz Sharif. These documents also reveal the case of million dollar money laundering which was closely related to President of Vladimir Putin.
According to the director of the International Consortium of Investigative Journalists (ICIJ), Gerard Ryle, these documents covered the day to day working of Mossack Fonseca from last forty years, and he also stated that this leak probably will be the biggest leak of the world because of the extent of the documents (Bilton, 2016).
Some parts of the documents shows that some important members of committee of Fifa’s Ethics, Uruguayan lawyer Juan Pedro Damiani and his firm legally assist the seven offshore companies which are related to the former vice president of Fifa. These documents also contain information that almost more than 500 banks which also include their subsidiaries and branches, registered almost 15600 shell companies with Mossack Fonseca.
Allegations were denied by lenders that they are helping their clients in any way for the purpose of tax evasions by using the offshore arrangements in complicated manner.
These documents shows the various ways in which rich people are able to use the offshore secretive tax regimes for exploiting resources, and these papers also reveal the name of 12 national leaders, 143 politicians, their families and close associations in the world.
Allegation on Mossack Fonseca were not ended yet, and as per the legal papers filed in U.S. District Court in Las Vegas claimed that this law firm had incorporated 123 shell companies in Nevada for the purpose of stealing the million dollars from government contract by former president of Argentina, and as per the demand raised by subpoena, law firm must provide the details related to money flow through Nevada companies, but Mossack fronseca denied to provide his information because of the confidentiality of their clients (OCCRP, n.d.).
There are number of ways to use the tax havens, and these ways are used for hiding the true owners of money, origin from which such money is generated and paying tax on money. The main allegations are related o the creation of shell companies, which shows outwards that they have legitimate business but from inside they are empty as shells. These companies are incorporated only for the purpose of managing money or hiding the true owners of the money.
The panama papers which are leaked from the law firm uncover number of cases related to suspected money laundering which are run by the close associates of Vladimir Putin. However, there are number of uses of tax havens for the purpose of money laundering and avoiding tax. For example-methods for avoiding tax re similar for all whether they are the wealthy businessman who decide to avoid tax or any dealer of drugs at international level or for the head of the brutal regime. As per the statement given by the Mossack Fonseca, they are always complied with the protocols stated at international level and ensure that companies incorporated must not use for tax evasions, money laundering, and terrorist finances and other illicit purposes (Bloom, 2016; Moneyterms, n.d.).
On 26th November 1983, six robbers robbed at the Brink’s-Mat warehouse at London’s Heathrow Airport. Robbers tied the security guards and pour gasoline on them, lit a matchstick and threatened them to set fire unless they opened the vault of warehouse. Thieves robbed almost 7000 gold bars, diamonds, and cash. At the time of departure, one of the thieves said “Thanks ever so much for your help. Have a nice Christmas,”. According to the media of British stated this crime as the crime of the century. A huge amount from loot was never recovered which includes cash reaped by melting gold and selling it. Where such money went was the biggest mystery. After the leak of documents it was revealed that law firm and its co founder Jürgen Mossack, help the thieves to hide the money by tied the company to Gordon parry, a dealer of London who commits the offence of money laundering for the Brink’s-Mat plotters. As per the records, after the sixteen months of robbery, the law firm incorporates a panama shell company named as Feberion Inc., and Jürgen Mossack was also the nominee director. Nominee director is the person who has control over the company on the paper but they do not conduct the activities of the company. In 1986, Mossack write an internal memo which shows that he was aware that this company managing the money received from famous theft of Brink’s-Mat in London. This company does not directly used for illegal purpose but company invested its money through those bank accounts and properties which was sourced as illegitimate. Records also shows that law firm does not help the authorities to gain access on Feberion’s assets, but it took steps which prevent the U.K. Police to gain access over the assets of the company.
Leaked records also show that when two certificates are obtained by police which controlled the ownership of the company, Mossack Fonseca took steps for issuing 98 new shares by feberion because of which control of the company wrested from investigators. Mossack does not ended its business relationship with feberion till the period of 1995 that is after the 3 years parry was sentenced to imprisonment for his role in Gold Caper. Mossack Fonseca said that all the allegations related to robbery of Brink’s-Mat are false, and founder of Jürgen Mossack never had any dealings with parry, and he never contracted the police for any matter related to this case (ICIJ, 2016).
Pulitzer Prize was won by the International Consortium of Investigative Journalists (ICIJ), for the investigation conducted related to panama papers because these papers reveal the offshore shell companies and tax havens. These papers are leaked from the Panamanian law firm Mossack Fonseca. This investigation also includes the strong network of 108 news organizations (The Indian Express, 2017).
This prize was announced by Columbia University, for investigating the panama scandal and provides explanatory reporting on this matter. The Board of Pulitzer prize awarded the investigation which was conducted for year by using the collaboration of 300 reporters on six continents for uncovering the offshore shell companies of tax havens (ICIJ, 2017).
Conclusion:
After considering all the facts of this report it is clear that Panama paper are those unpredictable leas which include almost 11.5 million papers and uncovered the faces of rich and powerful people of the world. These papers show how rich and powerful people hide their wealth through the offshore shell companies in tax havens for the purpose of avoiding the tax. These papers not only reveal the cases related to avoiding tax but also include number of cases which involve money received from criminal activities such as Brink’s-Mat robbery.
The papers are leaked from the database of panama based law firm that is Mossack Fonseca. These papers include the names of wealthy businessman as well as leaders of different countries and their family members such as brother-in-law of China’s President Xi Jinping, and president of Ukraine President Petro Poroshenko, president of Argentina Mauricio Macri, the late father of UK Prime Minister David Cameron, etc. therefore, this leak is considered as most shocking and biggest leak of the history.
References:
BBC News, (2016). Panama Papers Q&A: What is the scandal about. Available at: https://www.bbc.com/news/world-35954224. Accessed on 24th April 2016.
Bilton, R. (2016). Panama Papers: Mossack Fonseca leak reveals elite’s tax havens. Available at: https://www.bbc.com/news/world-35918844. Accessed on 24th April 2016.
BBC, (2016). Panama Papers: What the documents reveal. Available at: https://www.bbc.com/news/world-35956055. Accessed on 24th April 2016.
Bloom, J. (2016). Panama Papers: How assets are hidden and taxes dodged. Available at: https://www.bbc.com/news/business-35943740. Accessed on 24th April 2016.
Moneyterms. Shell company. Available at: https://moneyterms.co.uk/shell-company/. Accessed on 24th April 2016.
The guardian, (2016). What are the Panama Papers? A guide to history’s biggest data leak. Available at: https://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers. Accessed on 24th April 2016.
ICIJ. Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption. Available at: https://panamapapers.icij.org/20160403-panama-papers-global-overview.html. Accessed on 24th April 2016.
ICIJ, (2017). Panama Papers Wins Pulitzer Prize. Available at: https://panamapapers.icij.org/20170410-pulitzer-prize.html. Accessed on 24th April 2016.
The Indian express, (2017). Pulitzer Prize for Panama Papers investigation. Available at: https://indianexpress.com/article/india/pulitzer-prize-for-panama-papers-investigation-indian-express-4609712/. Accessed on 24th April 2016.
OCCRP. Panamanian Law Firm Is Gatekeeper To Vast Flow of Murky Offshore Secrets. Available at: https://www.occrp.org/en/panamapapers/mossack-fonseca/. Accessed on 24th April 2016.
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