Fresh tax leak names directors of secretive offshore firms

22 Sep 16

Politicians, royalty and convicted criminals are among those named as directors of 175,000 secretive companies registered in the Bahamas, according to another cache of leaked documents published yesterday.

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Bahamas

The leak identifies the directors of 175,000 companies incorporated in the Bahamas, often called the Switzerland of Central America.

 

The files unearth how a cadre of accountants and middlemen the mega-rich and politically powerful to construct secretive offshore companies, trusts and foundations. While not illegal in itself, such structures are often used to conceal wealth and assets and avoid tax. 

Government officials, their families and their associates in Europe, Asia and South America are named in the 1.3 million of documents, leaked to German newspaper Süddeutsche Zeitung – also chosen by the whistleblower who revealed the Panama Papers.

The documents come from the Bahamas’ company registry, which is theoretically available online but is very difficult to access. They include the names of directors, company administrators and other corporate documents for entities incorporated in the Bahamas between 1990 and 2016. The Bahamas is often dubbed the Switzerland of Central America because of its renown for financial secrecy.

Eric LeCompte, executive director of the Jubilee USA network, which advocates for a world economy that works for the poorest, described the leak as the “sequel” to the Panama Papers, and another example of how “money laundering, corruption and tax evasion thrive in the dark”.

The political figures named in the documents include Colombia’s former minister of mines and energy, Carlos Caballero Argáez, former EU commissioner for competition policy Neelie Kroes – one of the bloc’s main corporate enforcers – and current UK home secretary Amber Rudd.

Politicians’ families and other close associates, as well as other influential figures from the world of business, academia and royalty, are also named in the leaks, touching countries all over the world including Pakistan, India, Mexico, Jordan, the United Arab Emirates and Japan.

The documents also include the names of 539 registered agents – corporate middlemen that mediate between Bahamian authorities and customers who wish to set up an offshore company in the jurisdiction.

Among them is Mossack Fonseca – the law firm at the centre of the Panama Papers. According to the documents, it set up 15,915 entities in the Bahamas.

Convicted felons, and illegal activities including money laundering, fraud and terrorism financing have all also been linked to the documents.

Anders Dahlbeck, ActionAid tax policy advisor, said this newest leak yet again demonstrates that the “international tax system is broken”.

“Those with the means to do so are able to break the rules on a massive scale, benefiting at the expense of some of the poorest people in the world.”

Both he and LeCompte highlighted that developing countries are the biggest losers of tax evasion. The IMF estimates they lose $200bn per year from corporate tax avoidance alone.

Dahlbeck said it is vulnerable groups like women and girls that pay the price, as key public services like schools and hospitals are starved of funding. 

  • Emma Rumney

    Emma is a reporter at Otsubo7 International. She also writes for in the UK.

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