04 Apr 2016 19:32 IST

Who, what, where, why: Panama Papers

Here’s your primer on the “Panama Papers”

Following the leak of 11.5 million documents of Panamanian law firm Mossack Fonseca, journalists across the globe launched an investigation into the law firm that sells anonymous offshore companies around the world.

Dubbed "Panama Papers", the investigation into the firm began when German daily Sueddeutsche Zeitung received a tip from an anonymous source that the paper then shared with the International Consortium of Investigative Journalists (ICIJ).

Read: Panama Papers: huge tax leak exposes Putin aides, world leaders

The leaked “Panama Papers” cover almost 40 years, from 1977 until last December, and allegedly show that some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals, and tax evasion, says a Reuters report.

According to the documents, of the 143 world leaders named who have offshore accounts in Panama, 12 are national leaders, including the Prime Minister of Pakistan Nawaz Sharif and Russian president Vladimir Putin, though he is not named directly. Apart from this, some big names from Indian cinema — Amitabh Bachchan and Aishwarya Rai — have also surfaced.

At the core of it, having an offshore account, usually in places such as Panama, Seychelles or the Bahamas, where the tax laws are lax, isn’t illegal. But these accounts have been used to launder money, evade tax and participate in several such illegal activities.

Here’s everything you need to know about the expose.

What is it about?

According to Sueddeutsche Zeitung, an anonymous source submitted some encrypted internal documents from the law firm Mossack Fonseca. In the following months, the number of documents leaked grew to a number far more than what the paper had initially received. At the end of it, Sueddeutsche Zeitung said it had 2.6 terabytes worth of information. Take a look at the following graph to gain some perspective of the amount of information that is.

Gaphic from Süddeutsche Zeitung

After this Sueddeutsche Zeitung coordinated with ICIJ and “400 journalists from more than 100 media organizations in over 80 countries”, including journalists from The Indian Express, to go through the documents and make sense of the information that it holds.

Graphic from Süddeutsche Zeitung

Who it involves

According to this article on the ICIJ website, the people helping provide offshore accounts often used proxies and secret names to keep the identities of the clients a secret. But with international cooperation, journalists were able to trace the proxies back to the actual people. The article says apart from heads of state, various government officials, people involved in sports and the management of sport, Mossack Fonsecas’ clients also include criminals and members of the mafia.

Read: Tax authorities begin probes into some people named in Panama Papers leak

Some of the clients, according the documents, include footballers from Brazil, Uruguay, the United Kingdom, Turkey, Serbia, The Netherlands and Sweden, according to a report by The Indian Express. The documents also name Argentinean star footballer, Lionel Messi, who along with his agent-father are set to stand trial for tax fraud in Spain .

Why you should care

On the face of it, this investigation might seem like a witch-hunt of the affluent and powerful. But it is often offshore companies such as the ones that have surfaced because of this leak, and the subsequent investigation, that are used to make transactions for human trafficking, funding wars and evading tax.

There is also a more direct impact for India as about 500 Indians are named in the documents, including industry and political leaders, an advocate and members of corporate boards.

The video below tells you why this expose is important

 

 

ICIJ also released an interactive graphic of all the people named in the leak and investigation.

 

 

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