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Thursday, 2 June 2016

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The Panama Pandemonium: The leak that shocked the World.

                 The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung.[1] Süddeutsche Zeitung  is one of Germany’s leading newspapers which has its headquarters in Munich.  Its team has cooperated with other media organizations on a number of projects, including Offshore Leaks, Swiss Leaks, and Lux Leaks, which ICIJ coordinated.[2]  The records were shared by Süddeutsche Zeitung to the International Consortium of Investigative Journalists (ICIJ) which further shared it with a large network of international partners, including the Guardian and the BBC.

Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca. In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with. The source wanted neither financial compensation nor anything else in return, apart from a few security measures.[3]
The data provides how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the world’s rich and famous.The documents show ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.[4]
 Vladimir Putin has a $2bn trail.  Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davio Gunnlaugsson.[5]
The company at the center of all these stories is Mossack Fonseca. Mossack Fonseca, a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. It sells its shell firms in cities such as Zurich, London, and Hong Kong. Mossack Fonseca operates in havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.[6] Its website boasts of a global network with 600 people working in 42 countries.[7]
The data
The Panama Papers include approximately 11.5 million documents – more than the combined total of the Wikileaks Cablegate, Offshore Leaks, Lux Leaks, and Swiss Leaks. The data primarily comprises e-mails, pdf files, photo files, and excerpts of an internal Mossack Fonseca database. It covers a period spanning from the 1970s to the spring of 2016. 
About two years ago, a whistleblower had already sold internal Mossack Fonseca data to the German authorities, but the dataset was much older and smaller in scope: while it addressed a few hundred offshore companies, the Panama Papers provide data on some 214,000 companies. [8]
The leaked data is structured as follows: Mossack Fonseca created a folder for each shell firm. Each folder contains e-mails, contracts, transcripts, and scanned documents. In some instances, there are several thousand pages of documentation. First, the data had to be systematically indexed to make searching through this sea of information possible. Süddeutsche Zeitung and ICIJ uploaded millions of documents onto high-performance computers. The journalists compiled lists of important politicians, international criminals, and well-known professional athletes, among others. The digital processing made it possible to then search the leak for the names on these lists. The "party donations scandal" list contained 130 names, and the UN sanctions list more than 600. In just a few minutes, the powerful search algorithm compared the lists with the 11.5 million documents.[9]
                               
http://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495adf4/_modules_6_image_url.png
Courtesy: http://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495adf4/
The leak has made several tax havens and industrialists who have hidden their money and assets off shore. French President Francois Hollande hailed the “good revelations” which would “increase tax revenues from those who commit fraud”. Jennie Granger, a spokeswoman for UK’ tax authority has exclaimed that the organization has received a great deal of information on offshore companies.[10]
The tax revenues would surely increase from the people at fraud and who have not paid the appropriate amount of taxes. This revelation would also help identify the money stored offshore and bring that back for betterment of country.




References:
[1] What are the Panama Papers? A guide to history's biggest data leak, available at http://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers, last visited on 26/05/2016
[2]Frederik Obermaier, Bastian Obermayer, Vanessa Wormer and Wolfgang Jaschensky, About the Panama Papers, available at http://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495adf4/, last visited on 26/05/2016
[3] Ibid
[4] Supra 1
[5] Ibid
[6] Ibid
[7] Ibid
[8] Supra 2
[9] Ibid
[10] Richard Bilton, Panama Papers:Mossack Fonesca leak reveals elite tax havens, available at http://www.bbc.com/news/world-35918844,  last seen  on 26/05/2016



About the Author:




Sanya Darakhshan Kishwar is a third year BSc.LLB. student from Central University of South Bihar, Gaya. She is currently interning at For the Sake of Argument.She is passionate about books and loves to read case laws in her free time.








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