What is the Pandora Papers?

The Pandora Papers investigation is the world’s largest-ever journalistic collaboration, involving more than 600 journalists from 150 media outlets in 117 countries.

The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions. The entities enable owners to conceal their identities from the public and sometimes from regulators. Often, the providers help them open bank accounts in countries with light financial regulation.

The 2.94 terabytes of data, leaked to International Consortium of Investigative  Journalists (ICIJ) and shared with media partners around the world.

The records include an unprecedented amount of information on so-called beneficial owners of entities registered in the British Virgin Islands, Seychelles, Hong Kong, Singapore, Belize, Panama, South Dakota and other jurisdictions. They also contain information on the shareholders, directors and officers. In addition to the rich, the famous and the infamous, those exposed by the leak include people who don’t represent any public interest.

While some of the files date to the 1970s, most of those reviewed by ICIJ were created between 1996 and 2020. They cover a wide range of matters: the creation of shell companies, foundations and trusts; the use of such entities to purchase real estate, yachts, jets and life insurance; their use to make investments and to move money between bank accounts; estate planning and other inheritance issues; and the avoidance of taxes through complex financial schemes. Some documents are tied to financial crimes, including money laundering.

More than 330 politicians exposed by the leak were from more than 90 countries and territories. They used entities in secrecy jurisdictions to buy real estate, hold money in trust, own other companies and other assets, sometimes anonymously. About a dozen prominent Malaysians, including at least four active politicians, are among those named in the 12 million files making up the Pandora Papers.

The Pandora Papers investigation also reveals how banks and law firms work closely with offshore service providers to design complex corporate structures. The files show that providers don’t always know their customers, despite their legal obligation to take care not to do business with people who engage in questionable dealings.

The investigation also reports on how U.S. trust providers have taken advantage of some states’ laws that promote secrecy and help wealthy overseas clients hide wealth to avoid taxes in their home countries.

References:

Pandora Papers Leaked: Malaysia ranked 5th in the world for RM1.8 trillium outflow, https://thecoverage.my/

Some of Asia’s elite in the spotlight after leak of Pandora Papers, https://www.straitstimes.com