Countries implicated in the Panama Papers

The Panama Papers ( es, Papeles de Panamá) are 11.5 million leaked documents (or 2.6 terabytes of data) that were published beginning on April 3, 2016. The papers detail financial and attorney–client information for more than 214,488 offshore entities. The documents, some dating back to the 1970s, were created by, and taken from, former Panamanian offshore law firm and corporate service provider

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider. The documents contain personal financial information about wealthy individuals and public officials that had previously been kept private. The publication of these documents made it possible to establish the prosecution of

Jan Marsalek Jan Marsalek (also Maršálek, born 15 March 1980 in Vienna) is an Austrian alleged white-collar criminal and former manager, known for his position as board member and chief operating officer of the German payment processing firm Wirecard. He ...

, who is still a

person of interest "Person of interest" is a term used by law enforcement in the United States, Canada, and other countries when identifying someone possibly involved in a criminal investigation who has not been arrested or formally accused of a crime. It has no le ...

to a number of European governments due to his revealed links with Russian intelligence, and international financial fraudsters David and Josh Baazov. While offshore business entities are legal (see

Offshore Magic Circle The offshore magic circle is the set of the largest multi-jurisdictional law firms who specialise in offshore financial centres, especially the laws of the British Overseas Territories of Bermuda, Cayman Islands, and British Virgin Islands, and ...

), reporters found that some of the Mossack Fonseca

shell corporations A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or s ...

were used for illegal purposes, including

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

, tax evasion, and evading

international sanctions International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect i ...

. "

John Doe John Doe (male) and Jane Doe (female) are multiple-use placeholder names that are used when the true name of a person is unknown or is being intentionally concealed. In the context of law enforcement in the United States, such names are ofte ...

", the whistleblower who leaked the documents to German journalist

Bastian Obermayer Bastian Obermayer (born 10 December 1977) is a Pulitzer Prize-winning German investigative journalist with the Munich-based newspaper ''Süddeutsche Zeitung'' (SZ) and the reporter who received the Panama Papers from an anonymous source as well ...

from the newspaper '' Süddeutsche Zeitung'' (''SZ''), remains anonymous, even to the journalists who worked on the investigation. "My life is in danger", the whistleblower told them. In a May 6, 2016 document, John Doe cited income inequality as the reason for the action and said the documents were leaked "simply because I understood enough about their contents to realize the scale of the injustices they described". Doe had never worked for any government or

intelligence agency An intelligence agency is a government agency responsible for the collection, analysis, and exploitation of information in support of law enforcement, national security, military, public safety, and foreign policy objectives. Means of inf ...

and expressed willingness to help prosecutors if granted

immunity Immunity may refer to: Medicine * Immunity (medical), resistance of an organism to infection or disease * ''Immunity'' (journal), a scientific journal published by Cell Press Biology * Immune system Engineering * Radiofrequence immunity de ...

from prosecution. After ''SZ'' verified that the statement did in fact come from the source for the Panama Papers, the International Consortium of Investigative Journalists (ICIJ) posted the full document on its website. ''SZ'' asked the ICIJ for help because of the amount of data involved. Journalists from 107 media organizations in 80 countries analyzed documents detailing the operations of the law firm. After more than a year of analysis, the first news stories were published on April 3, 2016, along with 150 of the documents themselves. The project represents an important milestone in the use of

data journalism Data journalism or data-driven journalism (DDJ) is a journalistic process based on analyzing and filtering large data sets for the purpose of creating or elevating a news story. Data journalism is a type of journalism reflecting the increased ...

software tools and mobile collaboration. The documents were dubbed the Panama Papers because of the country they were leaked from, but the Panamanian government expressed strong objections to the name over concerns that it would tarnish the government's and country's image worldwide, as did other entities in Panama and elsewhere. Some media outlets covering the story have used the name "Mossack Fonseca papers". In October 2020, German authorities issued an international arrest warrant for the two founders of the law firm at the core of the tax evasion scandal exposed by the Panama Papers. Cologne prosecutors are seeking German-born Jürgen Mossack and Panamanian Ramón Fonseca on charges of accessory to tax evasion and forming a criminal organization.

Disclosures

In addition to the much-covered business dealings of British prime minister David Cameron and Icelandic prime minister Sigmundur Davíð Gunnlaugsson, the leaked documents also contain identity information about the shareholders and directors of 214,000 shell companies set up by

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider.tax avoidance Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdi ...

in very poor countries by very wealthy entities and individuals for example – led to questions on moral grounds. For example, the shell company Octea is registered to

Beny Steinmetz Beny Steinmetz ( he, בני שטיינמץ; born 2 April 1956) is an Israeli businessman and entrepreneur, with a focus in the mining and energy sectors, while being also active in the real estate and diamond-mining industries. Beny Steinmetz is ...

and owes more than US$700,000 in property taxes to the city of Koidu in

Sierra Leone Sierra Leone,)]. officially the Republic of Sierra Leone, is a country on the southwest coast of West Africa. It is bordered by Liberia to the southeast and Guinea surrounds the northern half of the nation. Covering a total area of , Sierr ...

, and is $150 million in debt, even though its

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...

s were more than twice that in an average month in the 2012–2015 period. Steinmetz himself has a personal worth of $6 billion. Other offshore shell company transactions described in the documents do seem to have broken exchange laws, violated trade sanctions or stemmed from political corruption, according to ICIJ reporters. For example: * Uruguay has arrested five people and charged them with money-laundering through Mossack Fonseca shell companies for a Mexican drug cartel. * ''Ouestaf'', an ICIJ partner in the investigation, reported that it had discovered new evidence that Karim Wade received payments from DP World (DP). He and a long-time friend were convicted of this in a trial that the

United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmoni ...

and

Amnesty International Amnesty International (also referred to as Amnesty or AI) is an international non-governmental organization focused on human rights, with its headquarters in the United Kingdom. The organization says it has more than ten million members and s ...

said was unfair and violated the defendants' rights. The ''Ouestaf'' article does not address the conduct of the trial, but does say that ''Ouestaf'' journalists found Mossack Fonseca documents showing payments to Wade via a DP subsidiary and a shell company registered to the friend. * Swiss lawyer Dieter Neupert has been accused of mishandling client funds and helping both oligarchs and the Qatari royal family to hide money. Named in the leak were 12 current or former world leaders; 128 other public officials and politicians; and hundreds of celebrities, businessmen, and other wealthy individuals of over 200 countries.

Tax havens

Individuals and entities may open offshore accounts for any number of reasons, some of which are legal. A Canadian lawyer based in Dubai noted, for example, that businesses might wish to avoid falling under

Islamic inheritance jurisprudence Islamic Inheritance jurisprudence is a field of Islamic jurisprudence ( ar, فقه) that deals with inheritance, a topic that is prominently dealt with in the Qur'an. It is often called ''Mīrāth'', and its branch of Islamic law is technical ...

if an owner dies. Businesses in some countries may wish to hold some of their funds in dollars also, said a Brazilian lawyer.

Estate planning Estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life, in the event the person becomes incapacitated and after death. The planning inc ...

is another example of legal

tax avoidance Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdi ...

. American film-maker

Stanley Kubrick Stanley Kubrick (; July 26, 1928 – March 7, 1999) was an American film director, producer, screenwriter, and photographer. Widely considered one of the greatest filmmakers of all time, his films, almost all of which are adaptations of nove ...

had an estimated personal worth of $20 million when he died in 1999, much of it invested in an 18th-century English manor he bought in 1978. He lived in that manor for the rest of his life, filming scenes from '' The Shining'', '' Full Metal Jacket,'' and ''

Eyes Wide Shut ''Eyes Wide Shut'' is a 1999 erotic mystery psychological drama film directed, produced, and co-written by Stanley Kubrick. It is based on the 1926 novella '' Traumnovelle'' (''Dream Story'') by Arthur Schnitzler, transferring the story's set ...

'' there as well. Three holding companies set up by Mossack Fonseca now own the property, and are in turn held by trusts set up for his children and grandchildren. Since Kubrick was an American living in Britain, without the trust his estate would have had to pay transfer taxes to both governments and possibly have been forced to sell the property to obtain the liquid assets to pay them. Kubrick is buried on the grounds along with one of his daughters, and the rest of his family still lives there. HMRC offshore evasion poster February 2014

HMRC offshore evasion poster February 2014

Other uses are more ambiguous. Chinese companies may incorporate offshore in order to raise foreign capital, normally against the law in China. In some of the world's hereditary dictatorships, the law may be on the side of the elite who use offshore companies to award oil contracts to themselves, or gold concessions to their children, however such dealings are sometimes prosecuted under international law. While no standard official definition exists, ''

The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Eco ...

'' and the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...

describe an offshore financial center, or tax haven, as a jurisdiction whose banking infrastructure primarily provides services to people or businesses who do not live there, requires little or no disclosure of information when doing business, and offers low taxes. "The most obvious use of offshore financial centers is to avoid taxes", ''The Economist'' added. Oxfam blamed tax havens in its 2016 annual report on income inequality for much of the widening gap between rich and poor. "Tax havens are at the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share," said Raymond C. Offenheiser, president of Oxfam America, "depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality."

(IMF) researchers estimated in July 2015 that profit shifting by multinational companies costs

developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...

around US$213 billion a year, almost two percent of their national income. Igor Angelini, head of Europol's Financial Intelligence Group, said that

shell companies A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or ...

"play an important role in large-scale money laundering activities" and that they are often a means to "transfer bribe money". Tax Justice Network concluded in a 2012 report that "designing commercial tax abuse schemes and turning a blind eye upon suspicious transactions have become an inherent part of the work of bankers and accountants". Money-laundering affects the first world as well, since a favored

shell company A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or s ...

investment is

real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

in Europe and North America. London, Miami, New York, Paris, Vancouver and San Francisco have all been affected. The practice of parking

asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that c ...

s in luxury real estate has been frequently cited as fueling skyrocketing housing prices in Miami, where the Miami Association of Realtors said that cash sales accounted for 90% of new home sales in 2015. "There is a huge amount of dirty money flowing into Miami that's disguised as investment," according to former congressional investigator

Jack Blum Jack Blum is a Canadian writer, producer, director, story editor, actor, educator and communications consultant based in Toronto, Ontario, Canada. With his longtime partner Sharon Corder, he has written and produced more than fifty hours of tele ...

. In Miami, 76% of condo owners pay cash, a practice considered a red flag for money-laundering. Real estate in London, where housing prices increased 50% from 2007 to 2016, also is frequently purchased by overseas investors. Donald Toon, head of Britain's National Crime Agency, said in 2015 that "the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK". Three quarters of Londoners under 35 cannot afford to buy a home. Andy Yan, an urban planning researcher and adjunct professor at the

University of British Columbia The University of British Columbia (UBC) is a public research university with campuses near Vancouver and in Kelowna, British Columbia. Established in 1908, it is British Columbia's oldest university. The university ranks among the top thr ...

, studied real estate sales in Vancouver—also thought to be affected by foreign purchasers—found that 18% of the transactions in Vancouver's most expensive neighborhoods were cash purchases, and 66% of the owners appeared to be Chinese nationals or recent arrivals from China. Calls for more data on foreign investors have been rejected by the provincial government. Chinese nationals accounted for 70% of 2014 Vancouver home sales for more than CA$3 million. On June 24, 2016 China CITIC Bank Corp filed suit in Canada against a Chinese citizen who borrowed CN¥50 million for his lumber business in China, but then withdrew roughly CA$7.5 million from the line of credit and left the country. He bought three houses in Vancouver and Surrey, British Columbia together valued at CA$7.3 million during a three-month period in June 2014.

International banking

"This issue will surely be raised at the G20 summit," predicted Tomasz Kozlowski, Ambassador of the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

(EU) to India. "We need to strengthen international cooperation for exchange of tax information between tax authorities". Panama,

Vanuatu Vanuatu ( or ; ), officially the Republic of Vanuatu (french: link=no, République de Vanuatu; bi, Ripablik blong Vanuatu), is an island country located in the South Pacific Ocean. The archipelago, which is of volcanic origin, is east of ...

and Lebanon may find themselves on a list of uncooperative tax havens that the

Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

(OECD) re-activated in July 2016 at the request of G20 nations, warned ''

Le Monde ''Le Monde'' (; ) is a French daily afternoon newspaper. It is the main publication of Le Monde Group and reported an average circulation of 323,039 copies per issue in 2009, about 40,000 of which were sold abroad. It has had its own website si ...

'', a French newspaper that participated in the investigation. Those three countries followed none of the OECD's three broad guidelines for international banking cooperation: * information exchange on request * a signed multilateral agreement on information standards * a commitment to implement automated information exchange in 2017 or 2018 The

OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

, the G20, or the

could also institute another list for countries that are inadequate in more than one area. Countries meeting none of these criteria, such as Panama, Vanuatu and Lebanon, would go on the blacklist. Countries that meet only one criterion would go on the greylist. In April 2016, if this greylist had been in place it would have included nine countries: Antigua and Barbuda,

Bahrain Bahrain ( ; ; ar, البحرين, al-Bahrayn, locally ), officially the Kingdom of Bahrain, ' is an island country in Western Asia. It is situated on the Persian Gulf, and comprises a small archipelago made up of 50 natural islands and a ...

Brunei Brunei ( , ), formally Brunei Darussalam ( ms, Negara Brunei Darussalam, Jawi: , ), is a country located on the north coast of the island of Borneo in Southeast Asia. Apart from its South China Sea coast, it is completely surrounded by th ...

Dominica Dominica ( or ; Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It is geographical ...

Liberia Liberia (), officially the Republic of Liberia, is a country on the West African coast. It is bordered by Sierra Leone to Liberia–Sierra Leone border, its northwest, Guinea to Guinea–Liberia border, its north, Ivory Coast to Ivory Coast� ...

, Nauru,

Samoa Samoa, officially the Independent State of Samoa; sm, Sāmoa, and until 1997 known as Western Samoa, is a Polynesian island country consisting of two main islands ( Savai'i and Upolu); two smaller, inhabited islands ( Manono and Apolima); ...

Tobago Tobago () is an island and ward within the Republic of Trinidad and Tobago. It is located northeast of the larger island of Trinidad and about off the northeastern coast of Venezuela. It also lies to the southeast of Grenada. The offic ...

and the

United Arab Emirates The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (Middle East, The Middle East). It is ...

Newsroom logistics

The ICIJ helped organize the research and document review once ''Süddeutsche Zeitung'' (SZ) realized the scale of the work required to validate the authenticity of 2.6 terabytes of leaked data. They enlisted reporters and resources from ''

The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers '' The Observer'' and '' The Guardian Weekly'', ''The Guardian'' is part of the ...

'', the BBC, ''

'', '' SonntagsZeitung,'' '' Falter'', ''

La Nación ''La Nación'' () is an Argentine daily newspaper. As the country's leading conservative newspaper, ''La Nación''s main competitor is the more liberal '' Clarín''. It is regarded as a newspaper of record for Argentina. Its motto is: "''La N ...

'', German broadcasters NDR and WDR, and Austrian broadcaster ORF, and eventually many others. Ultimately, "reporters at 100 news media outlets working in 25 languages had used the documents" to investigate individuals and organizations associated with Mossack Fonseca. Security factored into a number of project management considerations. Saying "My life is in danger", John Doe insisted that reporters communicate over encrypted channels only and agree that they would never meet face-to-face. SZ also had concerns about security, not only for their source, the leaked documents, and their data, but also for the safety of some of their partners in the investigation living under corrupt regimes who might not want their money-handling practices made public. They stored the data in a room with limited physical access on air gapped computers that were never connected to the Internet. ''The Guardian'' also limited access to its journalists' project work area. To make it even harder to sabotage the computers or steal their drives, SZ journalists made them more tamper-evident by painting the screws holding the drives in place with glitter nail polish. Reporters sorted the documents into a huge file structure containing a folder for each shell company, which held the associated emails, contracts, transcripts, and scanned documents Mossack Fonseca had generated while doing business with the company or administering it on a client's behalf. Some 4.8 million leaked files were emails, 3 million were database entries, 2.2 million PDFs, 1.2 million images, 320,000 text files, and 2242 files in other formats. Journalists indexed the documents using

open software Open-source software (OSS) is computer software that is released under a license in which the copyright holder grants users the rights to use, study, change, and distribute the software and its source code to anyone and for any purpose. O ...

packages Apache Solr and

Apache Tika Apache Tika is a content detection and analysis framework, written in Java, stewarded at the Apache Software Foundation. It detects and extracts metadata and text from over a thousand different file types, and as well as providing a Java libra ...

, and accessed them by means of a custom interface built on top of Blacklight. ''Süddeutsche Zeitung'' reporters also used Nuix for this, which is

proprietary software Proprietary software is software that is deemed within the free and open-source software to be non-free because its creator, publisher, or other rightsholder or rightsholder partner exercises a legal monopoly afforded by modern copyright and i ...

donated by an Australian company also named Nuix. Using Nuix, ''Süddeutsche Zeitung'' reporters performed

optical character recognition Optical character recognition or optical character reader (OCR) is the electronic or mechanical conversion of images of typed, handwritten or printed text into machine-encoded text, whether from a scanned document, a photo of a document, a sc ...

(OCR) processing on the millions of scanned documents, converting the data they contained to searchable and machine-readable text. Most project reporters then used

Neo4J Neo4j is a graph database management system developed by Neo4j, Inc. Described by its developers as an ACID-compliant transactional database with native graph storage and processing, Neo4j is available in a non-open-source "community edition" ...

and Linkurious to extract individual and corporate names from the documents for analysis, but some who had access to Nuix used it for this as well. Reporters cross-referenced the compiled lists of people against the processed documents, then analyzed the information, trying to connect people, roles, monetary flow, and structure legality. US banking and SEC expert

David P. Weber David Paul Weber is an American criminalist, and the former Assistant Inspector General for Investigations at the U.S. Securities and Exchange Commission (SEC). He is the Principal Investigator of a $2.6 million grant by the U.S. Department of ...

assisted journalists in reviewing information from the Panama Papers. Additional stories were released based on this data, and the full list of companies was released in early May 2016. The ICIJ later announced the release on May 9, 2016 of a searchable database containing information on over 200,000 offshore entities implicated in the Panama Papers investigation and more than 100,000 additional companies implicated in the 2013 Offshore Leaks investigation. Mossack Fonseca asked the ICIJ not to publish the leaked documents from its database. "We have sent a cease and desist letter," the company said in a statement. The sheer quantity of leaked data greatly exceeds the WikiLeaks Cablegate leak in 2010 (1.7 GB), Offshore Leaks in 2013 (260 GB), the 2014 Lux Leaks (4 GB), and the 3.3 GB

Swiss Leaks Swiss Leaks (or SwissLeaks) is the name of a journalistic investigation, released in February 2015, of a giant tax evasion scheme allegedly operated with the knowledge and encouragement of the British multinational bank HSBC via its Swiss subsi ...

of 2015. For comparison, the 2.6 TB of the Panama Papers equals approximately 2,660 GB.

Data security

Mossack Fonseca notified its clients on April 1, 2016, that it had sustained an email hack. Mossack Fonseca also told news sources that the company had been hacked and always operated within the law. Data security experts noted, however, that the company had not been encrypting its emails and furthermore seemed to have been running a three-year-old version of Drupal with several known

vulnerabilities Vulnerability refers to "the quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally." A window of vulnerability (WOV) is a time frame within which defensive measures are diminished, com ...

. According to James Sanders of ''

TechRepublic TechRepublic is an online trade publication and social community for IT professionals, providing advice on best practices and tools for the needs of IT decision-makers. It was founded in 1997 in Louisville, Kentucky, by Tom Cottingham and Kim S ...

'', Drupal ran on the Apache 2.2.15 version from March 6, 2010, and worse, the Oracle fork of Apache, which by default allows users to view

directory Directory may refer to: * Directory (computing), or folder, a file system structure in which to store computer files * Directory (OpenVMS command) * Directory service, a software application for organizing information about a computer network' ...

structure. The network architecture was also inherently insecure; the email and web servers were not segmented from the client database in any way. Some reports also suggest that some parts of the site may have been running

WordPress WordPress (WP or WordPress.org) is a free and open-source content management system (CMS) written in hypertext preprocessor language and paired with a MySQL or MariaDB database with supported HTTPS. Features include a plugin architectu ...

with an out-of-date version of Slider Revolution, a plugin whose previously-announced vulnerabilities are well-documented. A grey hat hacker named 1×0123 announced April 12 that Mossack Fonseca's content management system had not been secured from SQL injection, a well-known database attack vector, and that he had been able to access the customer database because of this. Computer security expert Chris Kubecka announced May 24, 2016, that the Mossack Fonseca client login portal was running four different government grade

remote access trojan In computing, the term remote desktop refers to a software- or operating system feature that allows a personal computer's desktop environment to be run remotely off of one system (usually a PC, but the concept applies equally to a server or a ...

s (RATs). Kubecka confirmed there were still numerous critical vulnerabilities, too many open ports into their infrastructure and internet access to their archive server due to weak security. Kubecka explained how each data security issue was discovered in detail in a book titled ''Down the Rabbit Hole: An OSINT Journey''. Mossack Foncesa's client portal and general data security weak

Mossack Foncesa's client portal and general data security weak

Leak and leak journalism

Gerard Ryle Gerard Ryle (born 1965) is an Irish-Australian investigative reporter who has written on subjects including politics, financial and medical scandals, and police corruption. From 2011, he has been director of the International Consortium of Inve ...

, director of the ICIJ, called the leak "probably the biggest blow the offshore world has ever taken because of the extent of the documents". Edward Snowden described the release in a Twitter message as the "biggest leak in the history of

". The ICIJ also said that the leak was "likely to be one of the most explosive eaks of inside information in historyin the nature of its revelations". "This is a unique opportunity to test the effectiveness of leaktivism", said Micah White, co-founder of Occupy, "... the Panama Papers are being dissected via an unprecedented collaboration between hundreds of highly credible international journalists who have been working secretly for a year. This is the global professionalization of leaktivism. The days of WikiLeaks amateurism are over." WikiLeaks spokesperson Kristinn Hrafnsson, an Icelandic investigative journalist who worked on Cablegate in 2010, said withholding some documents for a time does maximise the leak's impact, but called for full online publication of the Panama Papers eventually. A tweet from WikiLeaks criticized the decision of the ICIJ to not release everything for ethical reasons: "If you censor more than 99% of the documents you are engaged in 1% journalism by definition." The whistleblower reported that the murder of journalists Daphne Caruana Galizia in 2017 and the Ján Kuciak in 2018 due to their investigations of the Panama Papers had deeply affected him and called upon the European Union to deliver justice.

People named

While offshore business entities are not illegal in the jurisdictions where they are registered, and often not illegal at all, reporters found that some Mossack Fonseca shell corporations seem to have been used for illegal purposes including

, kleptocracy, tax evasion and evading

. Reports from April 3 note the law firm's many connections to high-ranking political figures and their relatives, as well as celebrities and business figures. Among other things, the leaked documents illustrate how wealthy individuals, including public officials, can keep personal financial information private. Initial reports identified five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates as well as government officials, close relatives, and close associates of various heads of government of more than forty other countries. Names of then-current national leaders in the documents include President Khalifa bin Zayed Al Nahyan of the United Arab Emirates,

Petro Poroshenko Petro Oleksiyovych Poroshenko ( uk, Петро́ Олексі́йович Пороше́нко, ; born 26 September 1965) is a Ukrainian businessman and politician who served as the fifth president of Ukraine from 2014 to 2019. Poroshenko se ...

of Ukraine, King Salman of Saudi Arabia, and the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson. Former heads of state mentioned in the papers include: *Argentinian president Mauricio Macri who was president from December 2015–December 2019. Moreover, the moral problem, the oppositers reclaimed illegality because he never put this in his patrimonial declarations. For one of the official source of Panama papers: "Macri's official spokesman Ivan Pavlovsky said that the Argentine president didn't list Fleg Trading Ltd. as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. "This is why Maricio Macri was occasionally its director," he said, reiterating that Macri was not a shareholder." *Sudanese president Ahmed al-Mirghani, who was president from 1986–1989 and died in 2008. *Former Emir of Qatar

Hamad bin Khalifa Al Thani Sheikh Hamad bin Khalifa bin Hamad bin Abdullah bin Jassim bin Mohammed Al Thani ( ar, حمد بن خليفة الثاني; born 1 January 1952) is a member of the ruling Al Thani Qatari royal family. He was the ruling Emir of Qatar from 1995 ...

owned Afrodille S.A., which had a bank account in Luxembourg and shares in two South African companies. Al Thani also held a majority of the shares in Rienne S.A. and Yalis S.A., holding a term deposit with the

Bank of China The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world. The Bank of China was founded in 1912 by the Republican government as China's central bank, rep ...

in Luxembourg. A relative owned 25 percent of these: Sheikh Hamad bin Jassim Al Thani, Qatar's former prime minister and foreign minister. Former prime ministers: *Prime Minister Bidzina Ivanishvili of Georgia * Pavlo Lazarenko of

Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inva ...

*Prime Minister

Ayad Allawi Ayad Allawi ( ar, إيَاد عَلَّاوِي ; born 31 May 1944) is an Iraqi politician. He served as the vice president of Iraq from 2014 to 2015 and 2016 to 2018. Previously he was interim prime minister of Iraq from 2004 to 2005 and the p ...

, a former vice president of Iraq, owned property through Mossack Fonseca shell companies registered in Panama and the British Virgin Islands, for security reasons following an assassination attempt, according to his spokesperson, who added that any income from the properties was reported and taxes paid "promptly and on time." * Ion Sturza of Moldova. * Ali Abu al-Ragheb of Jordan. The leaked files identified 61 family members and associates of prime ministers, presidents and kings, including: *the brother-in-law of China's

paramount leader Paramount leader () is an informal term for the most important political figure in the People's Republic of China (PRC). The paramount leader typically controls the Chinese Communist Party (CCP) and the People's Liberation Army (PLA), often hol ...

Xi Jinping Xi Jinping ( ; ; ; born 15 June 1953) is a Chinese politician who has served as the general secretary of the Chinese Communist Party (CCP) and chairman of the Central Military Commission (CMC), and thus as the paramount leader of China, ...

*the son of former Malaysian prime minister Najib Razak *children of former prime minister of Pakistan

Nawaz Sharif Mian Muhammad Nawaz Sharif (Urdu, Punjabi: ; born 25 December 1949) is a Pakistani businessman and politician who has served as the Prime Minister of Pakistan for three non-consecutive terms. He is the longest-serving prime minister of Pak ...

*children of Azerbaijani president Ilham Aliyev * Clive Khulubuse Zuma, the nephew of former South African president Jacob Zuma *Nurali Aliyev, the grandson of Kazakh president Nursultan Nazarbayev * Mounir Majidi, the personal secretary of Moroccan king

Mohammed VI Muhammad VI may refer to: * Muhammad Imaaduddeen VI (1868–1932), sultan of the Maldives from 1893 to 1902 * Mehmed VI (1861–1926), sultan of Ottoman Empire, from 1918 to 1922 * Mohammed VI of Morocco (born 1963), King of Morocco since 19 ...

* Kojo Annan, the son of former

United Nations Secretary-General The secretary-general of the United Nations (UNSG or SG) is the chief administrative officer of the United Nations and head of the United Nations Secretariat, one of the six principal organs of the United Nations. The role of the secretary- ...

Kofi Annan * Mark Thatcher, the son of former British prime minister

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...

* Juan Armando Hinojosa, the "favourite contractor" of Mexican president

Enrique Peña Nieto Enrique Peña Nieto (; born 20 July 1966), commonly referred to by his initials EPN, is a Mexican politician who served as the 64th president of Mexico from 1 December 2012 to 30 November 2018. A member of the Institutional Revolutionary Party ...

. * Spanish Royal Family: Infanta Pilar, Duchess of Badajoz and her son Bruno Gómez-Acebes, Iñaki Urdangarín, Amalio de Marichalar, and people close to the family like the mistress of former King Juan Carlos I, Corinna Larsen. Other clients included less-senior government officials and their close relatives and associates, from over forty countries. Over £10 million of cash from the sale of the gold stolen in the 1983

Brink's-Mat robbery The Brink's-Mat robbery occurred at the Heathrow International Trading Estate, London, United Kingdom, on 26 November 1983. £26 million (equivalent to £ in ) worth of gold bullion, diamonds, and cash was stolen from a warehouse. The bulli ...

was laundered, first unwittingly and later with the complicity of Mossack Fonseca, through a Panamanian company, Feberion Inc. The company was set up on behalf of an unnamed client twelve months after the robbery. The Brinks money was put through Feberion and other front companies, through banks in Switzerland, Liechtenstein, Jersey, and the Isle of Man. It issued bearer shares only. Two nominee directors from Sark were appointed to Feberion by

Jersey Jersey ( , ; nrf, Jèrri, label= Jèrriais ), officially the Bailiwick of Jersey (french: Bailliage de Jersey, links=no; Jèrriais: ), is an island country and self-governing Crown Dependency near the coast of north-west France. It is the ...

-based offshore specialist Centre Services. The offshore firms recycled the funds through land and property transactions in the United Kingdom. Although the

Metropolitan Police Service The Metropolitan Police Service (MPS), formerly and still commonly known as the Metropolitan Police (and informally as the Met Police, the Met, Scotland Yard, or the Yard), is the territorial police force responsible for law enforcement and ...

raided the offices of Centre Services in late 1986 in cooperation with Jersey authorities, and seized papers and two Feberion bearer shares, it wasn't until 1995 that Brink's-Mat's solicitors were finally able to take control of Feberion and the assets. Actor

Jackie Chan Fang Shilong (born 7 April 1954), known professionally in English as Jackie Chan and in Chinese as Cheng Long ( zh, c=成龍, j=Sing4 Lung4; "becoming the dragon"), is a Hong Kong actor, filmmaker, martial artist, and stuntman known for ...

is mentioned in the leaked documents as a shareholder in six companies based in the

British Virgin Islands ) , anthem = "God Save the King" , song_type = Territorial song , song = "Oh, Beautiful Virgin Islands" , image_map = File:British Virgin Islands on the globe (Americas centered).svg , map_caption = , mapsize = 290px , image_map2 = Brit ...

Client services

Law firms play a central role in offshore financial operations. Mossack Fonseca is one of the biggest in its field and the biggest financial institutions refer customers to it. Its services to clients include incorporating and operating shell companies in friendly jurisdictions on their behalf. They can include creating "complex shell company structures" that, while legal, also allow the firm's clients "to operate behind an often impenetrable wall of secrecy". The leaked papers detail some of their intricate, multilevel, and multinational corporate structures. Mossack Fonseca has acted with global consultancy partners like Emirates Asset Management Ltd, Ryan Mohanlal Ltd, Sun Hedge Invest and Blue Capital Ltd on behalf of more than 300,000 companies, most of them registered in the

British Overseas Territories The British Overseas Territories (BOTs), also known as the United Kingdom Overseas Territories (UKOTs), are fourteen territories with a constitutional and historical link with the United Kingdom. They are the last remnants of the former Bri ...

. Leaked documents also indicate that the firm would also backdate documents on request and, based on a 2007 exchange of emails in the leaked documents, it did so routinely enough to establish a price structure: $8.75 per month in the past. In 2008, Mossack Fonseca hired a 90-year-old British man to pretend to be the owner of the offshore company of Marianna Olszewski, a US businesswoman, "a blatant breach of anti-money laundering rules" according to the BBC.

Sanctioned clients

The anonymity of offshore shell companies can also be used to circumvent international sanctions, and more than 30 Mossack Fonseca clients were at one time or another blacklisted by the US Treasury Department, including businesses linked to senior figures in Russia, Syria and North Korea. Three Mossack Fonseca companies started for clients of Helene Mathieu Legal Consultants were later sanctioned by the US Treasury's Office of Foreign Assets Control (OFAC). Pangates International Corporation was accused in July 2014 of supplying the government of Syria with "a large amount of specialty petroleum products" with "limited civilian application in Syria". The other two, Maxima Middle East Trading and Morgan Additives Manufacturing Co, and their owners Wael Abdulkarim and Ahmad Barqawi, were said to have "engaged in deceptive measures" to supply oil products to Syria. Mossack Fonseca also ran six businesses for Rami Makhlouf, cousin of Syrian president

Bashar al-Assad Bashar Hafez al-Assad, ', Levantine pronunciation: ; (, born 11 September 1965) is a Syrian politician who is the 19th president of Syria, since 17 July 2000. In addition, he is the commander-in-chief of the Syrian Armed Forces and the ...

, despite US sanctions against him. Internal Mossack Fonseca documents show that in 2011 Mossack Fonseca rejected a recommendation by their own compliance team to sever ties to Mr. Makhlouf. They agreed to do so only months later. The firm has said it never knowingly allowed anyone connected with rogue regimes to use its companies.

Frederik Obermaier Frederik Obermaier (born 1 March 1984) is a German investigative journalist for the Munich-based newspaper, ''Süddeutsche Zeitung'', and author. Together with his colleague Bastian Obermayer in 2016 he initiated and coordinated the Panama Pape ...

, co-author of the Panama Papers story and an investigative reporter at the German newspaper '' Süddeutsche Zeitung'', told ''

Democracy Now ''Democracy Now!'' is an hour-long American TV, radio, and Internet news program hosted by journalists Amy Goodman (who also acts as the show's executive producer), Juan González, and Nermeen Shaikh. The show, which airs live each weekday at ...

'': "

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider.Makhlouf was the cousin, and they realised that he was sanctioned, and they realised that he's allegedly one of the financiers of the Syrian regime. And they said, 'Oh, there is this bank who still does business with him, so we should still keep with him, as well'."

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tr ...

also appeared to reassure

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider.Assad family by the US. Makhlouf is already known to be a long-standing client of HSBC's Swiss private bank, holding at least $15 million with it in multiple accounts in 2006. The Panamanian files also show HSBC provided financial services to a Makhlouf company called Drex Technologies, which HSBC said was a company of "good standing". DCB Finance, a Virgin Islands-based shell company founded by North Korean banker Kim Chol-sam and British banker Nigel Cowie, also ignored international sanctions and continued to do business with

North Korea North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korean Peninsula and shares borders with China and Russia to the north, at the Yalu (Amnok) and T ...

with the help of the Panamanian firm. The US Treasury Department in 2013 called DCB Finance a front company for Daedong Credit Bank and announced sanctions against both companies for providing banking services to North Korean arms dealer Korea Mining and Development Trading Corporation, attempting to evade sanctions against that country, and helping to sell arms and expand North Korea's nuclear weapons programme. Cowie said the holding company was used for legitimate business and he was not aware of illicit transactions. Mossack Fonseca, required by international banking standards to avoid money-laundering or fraudster clients, is, like all banks, supposed to be particularly alert for signs of corruption with

politically exposed person In financial regulation, a politically exposed person (PEP) is one who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and ...

s (PEP), in other words, clients who either are or have close ties to government officials. However they somehow failed to turn up any red flags concerning Tareq Abbas even though he shares a family name with the president of Palestine, and sat on the board of directors of a company with four fellow directors the firm did deem PEP because of their ties to Palestinian politics. Yet Mossack Fonseca actually did and documented due diligence research, including a Google search.

Clients of Mossack Fonseca

Mossack Fonseca has managed more than 300,000 companies over the years. The number of active companies peaked at more than 80,000 in 2009. Over 210,000 companies in twenty-one jurisdictions figure in the leaks. More than half were incorporated in the

, with others in Panama, the Bahamas, the

Seychelles Seychelles (, ; ), officially the Republic of Seychelles (french: link=no, République des Seychelles; Creole: ''La Repiblik Sesel''), is an archipelagic state consisting of 115 islands in the Indian Ocean. Its capital and largest city, ...

Niue Niue (, ; niu, Niuē) is an island country in the South Pacific Ocean, northeast of New Zealand. Niue's land area is about and its population, predominantly Polynesian, was about 1,600 in 2016. Niue is located in a triangle between T ...

, and Samoa. Mossack Fonseca's clients came from more than 100 countries. Most of the corporate clients were from Hong Kong, Switzerland, the United Kingdom, Luxembourg, Panama, and Cyprus. Mossack Fonseca worked with more than 14,000 banks, law firms, incorporators, and others to set up companies, foundations, and trusts for their clients. Some 3,100 companies listed in the database appear to have ties to US offshore specialists, and 3,500 shareholders of offshore companies list US addresses. Mossack Fonseca has offices in Nevada and Wyoming. The leaked documents indicate that about US$2 trillion has passed through the firm's hands. Several of the holding companies that appear in the documents did business with sanctioned entities, such as arms merchants and relatives of dictators, during the time that the sanctions were in place. The firm provided services to a Seychelles company named Pangates International, which the US government believes supplied aviation fuel to the Syrian government during the current civil war, and continued to handle its paperwork and certify it as a company in good standing, despite sanctions, until August 2015. More than 500 banks registered nearly 15,600

with Mossack Fonseca, with

and its affiliates accounting for more than 2,300 of the total. Dexia and

J. Safra Sarasin The Bank J. Safra Sarasin Ltd (previously named "Bank Sarasin & Co. Ltd", until 2013) is a Swiss private bank, founded in 1841 and headquartered in Basel. It is currently owned by the Brazilian J. Safra Group, and was formed in its present stat ...

of Luxembourg, Credit Suisse from the Channel Islands and the Swiss

UBS UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swi ...

each requested at least 500 offshore companies for their clients. An

spokesman said, "The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years."

Responses by Mossack Fonseca

In response to queries from the ''

Miami Herald The ''Miami Herald'' is an American daily newspaper owned by the McClatchy Company and headquartered in Doral, Florida, a city in western Miami-Dade County and the Miami metropolitan area, several miles west of Downtown Miami.tax avoidance Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdi ...

and total anonymity, such as FATF protocols which require identifying ultimate beneficial owners of all companies (including offshore companies) before opening any account or transacting any business. The ''

The facts are these: while we may have been the victim of a data breach, nothing we've seen in this illegally obtained cache of documents suggests we've done anything illegal, and that's very much in keeping with the global reputation we've built over the past 40 years of doing business the right way.

Co-founder Ramón Fonseca Mora told CNN that the reports were false, full of inaccuracies and that parties "in many of the circumstances" cited by the ICIJ "are not and have never been clients of Mossack Fonseca". The firm provided longer statements to ICIJ. In its official statement April 6, Mossack Fonseca suggested that responsibility for any legal violations might lie with other institutions:

approximately 90% of our clientele is professional clients ... who act as
intermediaries An intermediary (or go-between) is a third party that offers intermediation services between two parties, which involves conveying messages between principals in a dispute, preventing direct contact and potential escalation of the issue. In law ...
and are regulated in the
jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. J ...
of their business. These clients are obliged to perform due diligence on their clients in accordance with the KYC and AML regulations to which they are subject.

In an interview with ''Bloomberg'', Jürgen Mossack said: "The cat's out of the bag, so now we have to deal with the aftermath." He said the leak was not an "inside job"—the company had been hacked by servers based abroad. It filed a complaint with the Panamanian attorney general's office. On April 7, 2016 Mossack resigned from Panama's Council on Foreign Relations ( Conarex), even though he was not officially serving at the time. His brother Peter Mossack still serves as honorary Consul of Panama, as he has since 2010. On May 5, 2016, Mossack Fonseca sent a cease and desist letter to the ICIJ in an attempt to stop the ICIJ from releasing the leaked documents from the Panama Papers scandal. Despite this, the ICIJ released the leaked documents on May 9, 2016. In March 2018, Mossack Fonseca announced it would close down due to damage caused by the Panama Papers scandal. In October 2019, ''The Laundromat'', a movie based on the events of the Panama Papers was released on the streaming service

Netflix Netflix, Inc. is an American subscription video on-demand over-the-top streaming service and production company based in Los Gatos, California. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, it offers a ...

. Prior to this, Mossack and Fonseca issued a lawsuit in aim of preventing the release, citing defamation and potential damage to their rights of a fair trial by jury, should one begin. On July 17, 2019, the judge, based in

Connecticut Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the ...

, refused the injunction citing lack of jurisdiction, and ordered the case be transferred to

Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world ...

California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...

Responses in Panama

At 5:00 am on April 3, as the news first broke, Ramón Fonseca Mora told television channel TVN he "was not responsible nor he had been accused in any tribunal". He said the firm was the victim of a hack and that he had no responsibility for what clients did with the offshore companies that they purchased from Mossack Fonseca, which were legal under Panamanian law. Later that day, the Independent Movement (MOVIN) called for calm, and expressed hope that the Panamanian justice system would not allow the culprits to go with impunity.

Public officials

By April 8, the government understood that media reports were addressing tax evasion and not attacking Panama. The then-president Varela met on Wednesday April 7, with CANDIF, a committee of representatives from different sectors of the Panamanian economy which includes the Chamber of Commerce, Chamber of Industry and Agriculture, the National Lawyers Association, the International Lawyers Association, the Banking Association and the Stock Exchange, and entered full crisis management mode. On the same day he announced the creation of a new judiciary tribunal and a high-level commission led by Nobel Prize Laureate Joseph Stiglitz. There were accusations that foreign forces were attacking Panama because of Panama's "stable and robust economy".

Isabel Saint Malo Isabel de Saint Malo García de Alvarado (born 27 June 1968) is a Panamanian politician and diplomat. She formerly was the Vice President of Panama and Minister of Foreign Affairs from 1 July 2014, to 30 June 2019. De Saint Malo ran with elected ...

de Alvarado, then-Vice President of Panama, said in an op-ed piece published April 21 in ''The Guardian'' that then-President

Juan Carlos Varela Juan Carlos Varela Rodríguez (; born 13 December 1963) is a Panamanian businessman and former politician who served as the President of Panama from 2014 to 2019. Varela was Vice President of Panama from 2009 to 2014, and Minister of Foreign ...

and his administration have strengthened Panama's controls over money-laundering in the twenty months they had been in power, and that "Panama is setting up an independent commission, co-chaired by the Nobel laureate Joseph Stiglitz, to evaluate our financial system, determine best practices, and recommend measures to strengthen global financial and legal transparency. We expect its findings within the next six months, and will share the results with the international community." However, in early August 2016, Stiglitz resigned from the committee because he learned that the Panamanian government would not commit to making their final report public. He said that he had always "assumed" that the final report would be transparent. On April 8, then-President Varela denounced France's proposal to return Panama to a list of countries that did not cooperate with information exchange. Minister of the Presidency Alvaro Alemán categorically denied that Panama is a tax haven, and said the country would not be a scapegoat. Alemán said that talks with the French ambassador to Panama had begun. On April 25, a meeting of the Panamanian and French finance ministers resulted in an agreement under which Panama will provide information to France about French nationals with taxable assets in the country. The Minister of Economy and Finance of Panama, Dulcidio de la Guardia, formerly an offshore specialist at Mossack Fonseca competitor Morgan & Morgan, said the legal but often "murky" niche of establishing offshore accounts, firms and trusts make up "less than half a percentage point" of Panama's GDP. He appeared to suggest that the publication of the papers was an attack on Panama because of the high level of economic growth that the country had shown. Eduardo Morgan of the Panamanian firm Morgan & Morgan accused the OECD of starting the scandal to avoid competition from Panama with the interests of other countries. The Panama Papers affect the image of Panama in an unfair manner and have come to light not as the result of an investigation, but of a hack, said Adolfo Linares, president of the Chamber of Commerce, Industries and Agriculture of Panama (Cciap). The Colegio Nacional de Abogados de Panama (CNA) urged the government to sue. Political analyst Mario Rognoni said that the world perceives Panama as a tax haven. The government of then-President

might become implicated if he tries to cover up for those involved, Rognoni said. Economist Rolando Gordon said the affair hurts Panama, which has just emerged from the greylist of the FATF, and added that each country, especially Panama, must conduct investigations and determine whether illegal or improper acts were committed. Panama's Lawyers Movement called the Panama Papers leak "cyber bullying" and in a press conference condemned it as an attack on the 'Panama' brand. Fraguela Alfonso, its president, called it a direct attack on the country's financial system.

I invite all organized forces of the country to create a great crusade for the rescue of the country's image.

The law firm Rubio, Álvarez, Solís & Abrego also reacted and in a press release said that "In recent decades Panama has been in the most important financial and service centers of Latin America and the entire world. As a result, all kinds of attacks on our service system have been attempted." Offshore companies are legal, said Panamanian lawyer and former controller of the republic Alvin Weeden; illegality arises when they are used for money laundering, arms smuggling, terrorism, or tax evasion. On October 19, 2016, it became known that a government executive had spent 370 million U.S. dollars in order to "clean" the country's image. On October 22, 2016, during a state visit to Germany, Varela told journalist Jenny Pérez, of Deutsche Welle that there had been "progress" in transparency and many agreements to exchange tax information, and that tax evasion was a global problem. Asked about his ties with Ramón Fonseca Mora, managing partner of the firm Mossack Fonseca, he acknowledged that he is a friend.

Law enforcement

The Procuraduría de la Nación announced that it would investigate Mossack Fonseca and the Panama papers. On April 12, the newly formed Second Specialized Prosecutor against Organized Crime raided Mossack Fonseca and searched their Bella Vista office as part of the investigation initiated by the Panama Papers. The Attorney General's office issued a press release following the raid, which lasted 27 hours, stating that the purpose was "to obtain documents relevant to the information published in news articles that establishes the possible use of the law firm in illegal activities". The search ended without measures against the law firm, confirmed prosecutor Javier Caraballo of the Second Prosecutor Against Organized Crime. On April 22 the same unit raided another Panama location and "secured a large amount of evidence". The Municipality of Regulation and Supervision of Financial Subjects ot the Ministry of Economy and Finance (MEF)initiated a special review of the law firm Mossack Fonseca to determine whether it had followed tax law. Carlamara Sanchez, in charge of this proceeding, said at a press conference that the quartermaster had come to verify whether the firm had complied since April 8 with due diligence, customer knowledge, the final beneficiary and reporting of suspicious transactions to Financial Analysis Unit (UAF) operations. She said that Law 23 of 2015 empowers regulation and supervision and said some firms had been monitored since late last year with special attention after the Panama Papers, and noted that the law carries fines $5,000 to $1 million or even suspension of the firm. The ICIJ investigation of Mossack Fonseca was reported to the Public Ministry. Samid Dan Sandoval, former candidate for mayor of Santiago de Veraguas (2014), filed the legal action against the journalists and all those who had participated. He said the project name damaged the integrity, dignity and sovereignty of the country and that the consortium would have to assume legal responsibility for all damage caused to the Panamanian nation. A Change.org petition requested the ICIJ stop using the name of Panama as in the Panama Papers. The request said the generally-accepted name for the investigation "damage(d) the image" of Panama.

Suspension of investigation

Attorney General of Panama Kenia Isolda Porcell Diaz announced on January 24, 2017 that she was suspending the investigations against Mossack Fonseca because it filed an appeal for protection of constitutional rights before the First Superior Court of Justice of Panama and requested that he deliver all the original documents to issue a judgment.

Charges

Mossack and Fonseca were detained on February 8, 2017 on money-laundering charges.

Demise of Mossack Fonseca

In March 2018,

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider.

Allegations, reactions, and investigations

Europe

Asia

North America

South America

Africa

Former South African president Thabo Mbeki, head of the African Union's panel on illicit financial flows, on April 9 called the leak "most welcome" and called on African nations to investigate the citizens of their nations who appear in the papers. His panel's 2015 report found that Africa loses $50 billion a year due to tax evasion and other illicit practices and its 50-year losses top a trillion dollars. Furthermore, he said, the

, an African nation, is the fourth most mentioned tax haven in the documents.

Oceania

Australia

On April 22, 2016, Australia said it would create a public register showing the beneficial, or actual, owners of shell companies, as part of an effort to stamp out tax avoidance by multinational corporations. The Australian Taxation Office has announced that it is investigating 800 individual Australian taxpayers on the Mossack Fonseca list of clients and that some of the cases may be referred to the country's Serious Financial Crime Task Force. Eighty names match to an organized crime intelligence database. Leaked documents examined by the ABC "pierced the veil of anonymous shell companies" and linked a Sydney businessman and a Brisbane geologist to mining deals in North Korea. "Rather than applying sanctions, the Australian Government and the ASX seem to have allowed a coach and horses to be ridden through them by the people involved in forming this relationship, corporate relationship with one of the primary arms manufacturers in North Korea," said Thomas Clark of the

University of Technology Sydney The University of Technology Sydney (UTS) is a public research university located in Sydney, New South Wales, Australia. Although its origins are said to trace back to the 1830s, the university was founded in its current form in 1988. As of 2021 ...

. David Sutton was director of AAT Corporation and EHG Corporation when they held mineral licenses in North Korea and did business with Korean Natural Resources Development and Investment Corporation, which is under

sanctions, and North Korea's "primary arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, responsible for approximately half of the arms exported by North Korea." The geologist, Louis Schurmann, said British billionaire Kevin Leech was key to putting the deal together. Leaked documents also reveal the involvement of another Briton, Gibraltar-based John Lister. According to ABC, the Department of Foreign Affairs and Trade was aware of these mining deals, which had also been brought up in the Australian Senate, but nobody ever referred the matter to the Australian Federal Police. On May 12, 2016, the names of former Prime Minister of Australia Malcolm Turnbull, and former

Premier of New South Wales The premier of New South Wales is the head of government in the state of New South Wales, Australia. The Government of New South Wales follows the Westminster Parliamentary System, with a Parliament of New South Wales acting as the legislatur ...

Neville Wran, were both found in the Panama Papers, due to the pair's former directorship of the Mossack Fonseca-incorporated company ''Star Technology Systems Limited''. Turnbull and Wran resigned from these positions in 1995, and the Prime Minister has denied any impropriety, stating "had tar Technologymade any profits—which it did not regrettably—it certainly would have paid tax in Australia."

Cook Islands

Media initially reported that the Panama Papers lists 500 entities created under the jurisdiction of the Cook Islands, population 10,000, almost as many as Singapore, whose population is 5.7 million. After the Winebox affair, the Cook Islands gave New Zealand jurisdiction over tax matters.

New Zealand

New Zealand's Inland Revenue Department said that they were working to obtain details of people who have tax residence in the country who may have been involved in arrangements facilitated by Mossack Fonseca.

, director of the ICIJ, told Radio New Zealand on April 8, 2016 that New Zealand is a well-known tax haven and a "nice front for criminals". New Zealand provides overseas investors with foreign trusts and look-through companies. New Zealand government policy is to not request disclosure of the identity of either the settlor or the beneficiaries of the trust, and thus the ownership remains secret, and as a consequence, thus hiding the assets from the trust-holder's home jurisdictions. These trusts are not taxed in New Zealand. These trusts can then be used to acquire and own New Zealand registered companies, which become a vehicle by which the trust owners can exercise day to day control over their assets. These New Zealand-registered companies can be designed not to make a profit using loans from tax havens and other profit shifting techniques: the result being tax free income with the general respectability that has typically been associated with companies registered in New Zealand. Prime Minister John Key responded May 7 to

's remark that he had been "curiously quiet" about tax evasion in the

Cook Islands ) , image_map = Cook Islands on the globe (small islands magnified) (Polynesia centered).svg , capital = Avarua , coordinates = , largest_city = Avarua , official_languages = , lan ...

by saying that the whistleblower was confused and probably European. While the Cook Islands use New Zealand currency, "I have as much responsibility for tax in the Cook Islands as I do for taxing Russia." New Zealand does represent the Cook Islands on defence and foreign policy, but not taxation, he said. In distancing New Zealand from the Cook Islands, Key ignored the close ties between the two countries and the crucial role New Zealand had in setting up the Cook Island taxation system.

Niue

Mossack Fonseca approached

in 1996 and offered to help set up a tax haven on the tiny South Sea island. The law firm drafted the necessary legislation, permitting offshore companies to operate in total secrecy. They took care of all the paperwork, the island got a modest fee for each filing, and it seemed like quite a deal, even if they were required by law now to provide all banking paperwork in Russian and Chinese as well as English. Soon the filings almost covered the island's year budget. The US government however made official noises in 2001 about laundering criminal proceeds and Chase Bank blacklisted the island and

Bank of New York The Bank of New York Mellon Corporation, commonly known as BNY Mellon, is an American investment banking services holding company headquartered in New York City. BNY Mellon was formed from the merger of The Bank of New York and the Mellon Finan ...

followed suit. This caused inconvenience to the population so they let their contract with Mossack Fonseca expire and many of the privacy-seekers on the banking world moved on. Some did stay however, apparently; the Panama Papers database lists nearly 10,000 companies and trusts set up on Niue, population 1200.

Samoa

Many recently created shell companies were set up in Samoa, perhaps after Niue revised its tax laws. The Panama Papers database lists more than 13,000 companies and trusts set up there. Samoa has a population of roughly 200,000.

International Federation of Association Football (FIFA) investigation

On May 27, 2015, the US Department of Justice indicted a number of companies and individuals for

conspiracy A conspiracy, also known as a plot, is a secret plan or agreement between persons (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder or treason, especially with political motivation, while keeping their agr ...

, corruption and racketeering in connection with bribes and kickbacks paid to obtain media and marketing rights for

FIFA FIFA (; stands for ''Fédération Internationale de Football Association'' (French), meaning International Association Football Federation ) is the international governing body of association football, beach football and futsal. It was found ...

tournaments. Some immediately entered guilty pleas. Among those indicted were Jeffrey Webb and Jack Warner, the current and former presidents of

CONCACAF The Confederation of North, Central America and Caribbean Association Football,, ; french: Confédération de football d'Amérique du Nord, d'Amérique centrale et des Caraïbes, . Dutch uses the English name. abbreviated as CONCACAF ( ; types ...

, the continental confederation under FIFA headquartered in the United States. They were charged with racketeering and bribery offenses. Others were US and South American sports marketing executives who paid and agreed to pay well over $150 million in bribes and kickbacks. On December 12, 2014, José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pleaded guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea. Torneos & Traffic (T&T) is a subsidiary of Fox International Channels since 2005 (with investments since 2002) and is the same company involved in corrupt practices in the acquisition of rights to major South American soccer tournaments. Many individuals mentioned in the Panama Papers are connected with the world governing body of association football,

, including the former president of CONMEBOL

Eugenio Figueredo Eugenio Hermes Figueredo Aguerre (born 10 March 1932 in Santa Lucía, Uruguay) is a Uruguayan and American association football executive and former footballer. In May 2015, he was banned by FIFA Ethics Committee. Biography As a footballer, F ...

; former President of UEFA Michel Platini; former secretary general of FIFA Jérôme Valcke; Argentine player for Barcelona

Lionel Messi Lionel Andrés Messi (; born 24 June 1987), also known as Leo Messi, is an Argentine professional footballer who plays as a forward for club Paris Saint-Germain and captains the Argentina national team. Widely regarded as one of the g ...

; and, from Italy, the head manager of Metro, Antonio Guglielmi. The leak also revealed an extensive

conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...

between a member of the

FIFA Ethics Committee The FIFA Ethics Committee is one of FIFA's three judicial bodies. It is organized in two chambers, the ''Investigatory Chamber'' and the ''Adjudicatory Chamber''. Its duties are regulated by several official documents, most importantly the ''FIFA ...

and former FIFA vice president

. Swiss police searched the offices of

UEFA Union of European Football Associations (UEFA ; french: Union des associations européennes de football; german: Union der europäischen Fußballverbände) is one of six continental bodies of governance in association football. It governs fo ...

, European football's governing body, after the naming of former secretary-general Gianni Infantino as president of FIFA. He had signed a television deal while he was at UEFA with a company called Cross Trading, which the FBI has since accused of bribery. The contract emerged among the leaked documents. Infantino has denied wrongdoing.

Recovered sums from litigations, fines and back taxes

In April 2019, the ICIJ and European newspapers reported that the global tally of such payments exceeded one billion USD, and is now at 1.2 billion. In comparison,

Great Britain Great Britain is an island in the North Atlantic Ocean off the northwest coast of continental Europe. With an area of , it is the largest of the British Isles, the largest European island and the ninth-largest island in the world. It ...

recovered the largest position (253 million), followed by

Denmark ) , song = ( en, "King Christian stood by the lofty mast") , song_type = National and royal anthem , image_map = EU-Denmark.svg , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of Denmark , establish ...

(237 million),

Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwee ...

(183 million),

Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = '' Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , ...

(164 million),

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...

(136 million) and

Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...

(93 million).

Colombia Colombia (, ; ), officially the Republic of Colombia, is a country in South America with insular regions in North America—near Nicaragua's Caribbean coast—as well as in the Pacific Ocean. The Colombian mainland is bordered by the ...

with 89 million recuperated the highest amount for South and Central American countries, which were heavily involved in the financial scandal. While investigations are ongoing in

Austria Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...

and

Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...

, and more payments are to be expected, many countries are conducting continued inspections of companies and private individuals revealed in the report.

Notes

References

'' (United Kingdom)
Panama Papers Portal
of ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...