The Paradise Papers are 13.4 million leaked files and 1.4 terabytes of leaked data from offshore service providers and company registries obtained by the German newspaper Suddeutsche Zeitung. They reveal the offshore interests and activities of politicians, world leaders, and celebrities and the tax engineering of more than 100 multinational corporations spanning more than 65 years. This leak is important because if wrongdoing is found and exposed, these high-profile people could be forced from office and/or stripped of their powers.
The leak originated from the Bermudian offshore law firm Appleby.
The leaked documents include loan agreements, financial statements, emails, and others.
German newspaper Suddeutsche Zeitung obtained the files and then turned them over to the International Consortium of Investigative Journalists (ICIJ), who then shared them with other media outlets.
The Paradise Papers have prompted governments to conduct audits and investigations, and implement policy reform.
Over half of the files were leaked loan agreements, financial statements, emails, trust deeds, and other paperwork from a single offshore law firm headquartered in Bermuda named Appleby. Also included in the Paradise Papers are half a million documents from Singapore-based Asiaciti and 6 million documents from company registries in 19 secrecy jurisdictions.
Glencore PLC (GLCNF), the world’s largest commodity trader and one of Appleby’s biggest clients, is revealed to have diverted millions of dollars through tax havens. Glencore also conducted currency swaps of over $25 billion and made a $45 billion loan to Israeli billionaire Dan Gertler, a close friend of the President of the Democratic Republic of Congo, in exchange for Gertler’s help in securing approvals from the country’s government.
Australia’s top court ruled that government officials may use the Paradise Papers to assess a tax bill against global commodity giant Glencore.
The International Consortium of Investigative Journalists (ICIJ) along with 95 media partners in six continents explored the files before publishing stories on Nov. 5, 2017. More details have since been revealed and are developing.
Other noteworthy findings include investments in Facebook (FB) and Twitter (TWTR) linked to firms owned by the Russian government, commerce secretary Wilbur Ross’s investment in a shipping firm with ties to Russian President Vladimir Putin, and Queen Elizabeth II’s $13 million private investment in funds in the Cayman Islands and Bermuda.
Hackers infiltrated Bermudian law firm Appleby’s servers, gaining access to over 6.8 million files. Hackers also stole equal amounts of data from Asiaciti in Singapore and other registers abroad. Those files were provided to two reporters with the German newspaper Suddeutsche Zeitung.
Familiar with the 2015 Panama Papers leak, Suddeutsche Zeitung reporters Bastian Obermayer and Frederik Obermaier provided the documents to the International Consortium of Investigative Journalists (ICIJ).
The consortium addressed this leak by organizing into three groups: Global I-Hub for communications, Global Knowledge Center for research, and Linkurius for data connections. All units worked to organize the data, conduct research, and investigate contracts, customer lists, and other transactions.
The Paradise Papers not only exposed the activities and transactions of well-known celebrities, government leaders, politicians, and royalty, it also sparked investigations into tax evasion and other criminal activity. It’s important to note that much of what was found indicated no wrongdoing; however, much is yet to be told about how much wrongdoing was unveiled.
There were 180 countries named in the Paradise Papers, and India was ranked number 19. The Indian Finance Ministry appointed the Multi-Agency Group (MAG) to monitor investigations related to the leak.
The European Union parliament is investigating tax-related crimes and is creating reforms. Also, the United Kingdom is reviewing its dependencies tax status and Switzerland is considering changing how companies are regulated.
The Panama Papers, coined the largest data leak, are 11.5 million leaked files and 2.6 leaked terabytes of data from Panamanian offshore law firm Mossack Fonseca. Like the Paradise Papers, Suddeutsche Zeitung obtained the files and provided them to the ICIJ, who then shared them with other media partners, such as the BBC.
The Panama Papers exposed the wealthy’s–including 12 national leaders, 131 politicians, and others–exploitation of offshore tax havens. Leading the pack is Russian president Vladimir Putin, who put Russian state bank money into offshore accounts.
The amount of money connected to Vladimir Putin in the Panama Papers.
Although more papers were leaked with Paradise, it pails in comparison to Panama in terms of terabytes of data leaked. However, the Paradise Papers were much more complex, according to Gerard Ryle, who oversees ICIJ journalists.
Using offshore accounts is not illegal, and there are many valid reasons to use them. However, corruption exists, and these leaks could highlight the misappropriation of funds, money laundering, and other illegal transactions.
The Paradise Papers contain more than 120,000 names of people and companies. Some of the most well-known people named in the Paradise Papers include Shakira, the Duke of Westminster Hugh Grosvenor, Queen Elizabeth II, former U.S. Commerce Secretary Wilbur Ross, Madonna, Bono, and more than a dozen of former President Trump’s advisers, Cabinet members, and donors.
Hackers gained access to Bermudian law firm Appleby’s servers, as well as the servers of Asiaciti in Singapore and other tax havens. They stole and transferred over 13 million documents worth of data to German newspaper Suddeutsche Zeitung, the same newspaper the Panama Papers were anonymously leaked to.
This leak was dubbed the Paradise Papers because of the paradise-like tax havens from which the documents originated.
After coming under scrutiny for moving profits to its Irish subsidiaries to avoid taxes, Apple sought a better tax shelter. The Paradise Papers show that Apple used Appleby to search for tax havens and ultimately select the Isle of Jersey. The selection of Jersey yielded Apple a tax haven that does not tax corporate income, saving the tech giant billions in taxes.