What is the significance of Denmark buying data from the Panama Papers leak?
The Panama Papers are the biggest leak ever: 12.7m documents from the offshore law firm Mossack Fonseca. They amount to a who’s who of the international rich. They include details of the real or “beneficial” owners behind anonymous offshore companies. The leak includes passport scans, addresses, and email chains, typically between the firm, which has offices around the world, and other lawyers and banks. In short, a goldmine for any ambitious tax inspector.
Who is the source?
We don’t know. In 2015 an anonymous source approached Bastian Obermayer, a reporter with Germany’s Süddeutsche Zeitung. Over the next 12 months, the source gave Obermayer Mossack Fonseca’s entire internal database, updated in real-time instalments. After the Panama Papers were published the source wrote a manifesto, suggesting his motives were idealistic: to expose wrongdoing. The source called himself John Doe. It’s unclear if John Doe has now sought to cash in on the leak by selling selective chunks of information to European and other governments, or if the source is someone else.
Has this happened before?
Yes. In 2014, the German government paid just under €1m for a previous – and much smaller – Mossack Fonseca leak. This led to a series of raids on those customers of Commerzbank, Germany’s second largest bank, whom the authorities suspected of tax evasion.
In 2006-07, Hervé Falciani took data from inside HSBC’s Swiss subsidiary. It showed how HSBC helped wealthy customers dodge tax. After fleeing to France, Falciani gave the HSBC files to French authorities. They shared them with other countries, including the UK. In January, British tax authorities admitted they had not prosecuted anybody.
Will other countries buy the data?
Probably. Denmark’s tax minister, Karsten Lauritzen, says another government put him in touch with the anonymous source. This means the source has approached at least one other tax authority. Germany is a likely candidate. In the past, several EU countries, including Belgium, have taken a tough approach to tax offenders. David Cameron did hold an anti-corruption summit in London following the Panama Papers revelations, but the UK has generally been reluctant to pursue offenders or investigate offshore leaks. It has so far not questioned employees at Mossack Fonseca’s UK office. The firm has closed branches in Jersey and the Isle of Man.
