New revelations from the International Consortium of Investigative Journalists (ICIJ) have shone a fresh light on a secret world of tax havens and offshore financial deals. These structures allow lawyers, bankers and other professionals to protect their wealthy and powerful clients' cash from tax officials or hide their dealings behind a veil of secrecy.
At the centre of the revelations is Appleby, one of the world’s biggest offshore law firms, with huge clients including commodities giant Glencore, oil major Shell, Goldman Sachs and HSBC.
This isn’t just a story about tax. As we have previously exposed, the secrecy sold in the offshore world enables terrorism, money laundering and sanctions-busting. It allows dirty money into our property market and banks, and lets scammers rip off honest investors and businesspeople.
As news outlets across the world break stories on the Paradise Papers from 5 November 2017 onwards, we will be updating this page with our responses, insights – and how together we can clean up the financial system that allows powerful elites to profit at the expense of the rest.
A WEEK IN PARADISE
The Paradise Papers have blown open the secret practices of the UK's tax havens, but tax evasion is just one small part of the story. Watch our video round-up of the week's revelations.
FTSE100 company Glencore's secret offshore dealings exposed
The Paradise Papers reveal damning details of Glencore’s business deals in the Democratic Republic of Congo, where it owns two huge copper and cobalt mines.
Confidential board minutes show that Dan Gertler, a notorious middleman in Congo, personally negotiated mining licences in favour of Katanga Mining – a company Glencore was in the process of taking over. Glencore pushed for Gertler to take on this role, and provided him with tens of millions of dollars in loans and options as a reward. We’re calling for a criminal investigation into Glencore’s Congo deals. Read our statement in full.
IT’S PAST TIME FOR AN INVESTIGATION INTO GLENCORE’S MURKY OPERATIONS
Since 2012 we’ve exposed Glencore’s transactions in the Democratic Republic of Congo with Dan Gertler, a billionaire mining magnate and a close friend of Congolese President Joseph Kabila. Over the course of a ten-year partnership, Glencore pumped cash, loans and shares worth over half a billion dollars into offshore companies owned by Gertler, which allowed him to make at least $67 million in risk-free profit. Several of these transactions didn’t make much obvious commercial sense for Glencore – unless they were intended as a means for ‘rewarding’ Gertler, the president’s friend.
Read our blog on why it's well past time for corporate behemoth Glencore to face investigations into its deals with Gertler in Congo.
VIDEO: TIME TO INVESTIGATE GLENCORE
Our Senior Campaigner Peter Jones talks about the new light the Paradise Papers throw on Global Witness's previous investigations of Glencore and the urgent need for the commodities giant to face an investigation for bribery and corruption, particularly over its Congo deals. Read our full statement here.
Leaks underline how little the EU has done to tackle offshore secrecy
The EU has so far failed to respond to the Panama Papers. These fresh leaks once again expose a damaging rogue system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies and trusts.
#ParadisePapers show how offshore secrecy allows powerful elites to profit at expense of the rest. #EU must act: https://t.co/Lg0cz5oVcI pic.twitter.com/ANYccfInjH— Global Witness (@Global_Witness) November 7, 2017
EU must act now
The leaks pile huge pressure on the EU to finally crack down on corporate secrecy, corruption and money laundering ahead of crucial negotiations in Brussels next week. Read our statement in full
VIDEO: Corporate secrecy in Europe
Our Head of EU Advocacy Rachel Owens explains why the Paradise Papers revelations add pressure for EU to agree to publicly reveal the true owners of companies and trusts.
UK GOVERNMENT INACTION
Pressure on UK government to open up its tax havens
The Papers pile huge pressure on the UK government to open up its tax havens, with the top five jurisdictions for hidden deals all UK Overseas Territories or Crown Dependencies. Read our statement in full
#ParadisePapers pile pressure on the UK government to open up its tax havens https://t.co/u5BMtLkuqn pic.twitter.com/gpsVUdwova— Global Witness (@Global_Witness) November 5, 2017
FIVE THINGS THE UK GOVERNMENT SAID IT WOULD DO (BUT HASN'T) SINCE THE PANAMA PAPERS TO TACKLE CORRUPTION
The government’s silence in response to the Paradise Papers is deafening. We know that the UK’s offshore industry lies at the heart of some of the world’s worst problems, like tax evasion, money laundering and terrorist finance. When David Cameron welcomed world leaders to London 18 months ago, it felt like there was genuine momentum to address the problem, but the list of broken promises and hollow pledges keeps growing. The time for platitudes and rhetoric is over, the Prime Minister must act - Murray Worthy, Senior Campaigner – Anti Money Laundering, Global Witness
Nearly two years since the release of the Panama Papers and now with the release of the Paradise Papers the UK government has done nothing to tackle corruption. Not only has it failed to deliver on its commitments to tackle the root causes of tax evasion, corruption and money laundering. It needs to strengthen its efforts to make good on its overdue promises.
A year after #PanamaPapers and following this week's #ParadisePapers, @theresa_may must open up UK tax havens now https://t.co/lRChIYC0KN pic.twitter.com/HWxKX85404— Global Witness (@Global_Witness) November 10, 2017
VIDEO: UK Government must crack down on corruption
Our campaigner Naomi Hirst lists the five things the government said it would do (but hasn’t) and calls for the Prime Minister to make good on the promises her government made at the International Anti-Corruption Summit just last year.
FACT CHECK: Premier of Bermuda misled BBC Today programme listeners over tax haven secrecy
David Burt, the Premier of Bermuda, misled listeners on BBC Radio 4’s Today programme about Bermuda’s efforts to tackle the corporate secrecy that enables tax avoidance, evasion, corruption and money laundering this morning.
In response to the Paradise Papers revelations, he was asked “Your register of ownership is not public, it is secret,” Mr Burt replied “Our register of ownership is public and not secret. The fact is that Bermuda has known who the beneficial owners of our companies have been for over 70 years.”
This is not true. Bermuda does not have a public register of beneficial ownership. Read more on our blog
VIDEO: UK tax havens at the centre of a dirty offshore system
Campaigner Nienke Palstra responds to the Panama Papers leaks with a reminder this is also a story about corruption and money laundering - and why the UK government needs to act.
Wilbur Ross - another instance of conflicts of interest within the Trump administration
According to the documents, Trump-appointed U.S. Commerce Secretary Wilbur Ross used a constellation of companies, some with their ownership undisclosed. The companies were set up by Appleby to retain shares in Navigator Holdings, a shipping firm with business ties to a Russian oligarch subject to American sanctions. Read our statement in full here
Paradise Papers expose ‘flight’ risks posed by anonymous companies and private U.S. aircraft
The Paradise Papers leaks also highlight the role of US banks in selling secrecy to foreign individuals seeking to register aircraft in the US – even those with links to companies under US sanctions. See our full statement here.
Background to this issue
Briefings to download:
Other Global Witness blogs on and briefings on this issue:
- 10 lessons learned from the UK's public
register of the real owners of companies
- 8 reasons why public registers of companies are necessary
- An idiots' guide to money laundering
- Can the EU can learn from the Azerbaijani laundromat scandal in tackling anonymous company ownership
Appleby states it has thoroughly and vigorously investigated the Paradise Papers allegations and is satisfied that there is no evidence of any wrongdoing by themselves or their clients.
Find out more
Lucy BeckSenior Communications Advisor, Conflict and Fragile States
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