The Panama Papers: Five Preliminary Observations

The Panama papers is a treasure trove of information on the activities and clientele of a large, but not atypical, legal firm operating in an offshore financial centre or the tax haven of Panama. It follows a series of spectacular leaks by the International Consortium of Investigative Journalists that included the Lichtenstein leak, HSBC, the Lux-leaks and now the Panama papers. What have we learned from this latest leak so far?

First, although these are early days and it will take some time to learn these paper in depth, I have not come across any information on any new or unfamiliar techniques of tax avoidance, evasion and money laundering. Everything that has been revealed so far: the use of offshore entities, nominee directors, accounting firms and legal firms and the like, is depressingly familiar.

Second, like most commenters, I am least surprised to learn about the profile of your typical Mossack Fonseca client. These are the members of the global trotting elites: politicians, top echelon lawyers and accountant from a vast number of countries, some businessmen, many more in the business of finance. In a book written by Richard Murphy, Christian Chavagneux and myself and titled „Tax havens„, we added the sub-title: ‘How Globalization Really Works’. We are argued that tax havens are now a central component of the way business and in particular international business is conducted. The Panama papers are just another set of evidence that tax havens are an integral component to the life of modern business.

Third, I believe, but I have no proof, that Mossack Fonseca is not necessarily worse, or better, than your typical legal firm specialising in offshore activities. If we have learned anything from the sum total of the various disclosure and leaks of the activities in the offshore economy, then it is that the accountancy and legal firms are key players in perpetrating abuse on a very large scale ...

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