Paradise Papers (2017)

The Paradise Papers are a set of 13.4 million confidential electronic documents relating to offshore investments that were leaked to the German reporters Frederik Obermaier and Bastian Obermayer from the newspaper Süddeutsche Zeitung. The documents originate from offshore magic circle member Appleby, the corporate services providers Estera and Asiaciti Trust, and business registries in 19 tax jurisdictions. They contain the names of more than 120,000 people and companies. Among those whose financial affairs are mentioned are, separately, AIG, Prince Charles and Queen Elizabeth II, President of Colombia Juan Manuel Santos, and U.S. Secretary of Commerce Wilbur Ross. At 1.4 terabytes in size, this is second only to the Panama Papers in 2016 as the biggest data leak in history.

The Scale of the Leak

The Paradise Papers documents include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork from nearly 50 years at offshore legal service provider Appleby and corporate services provider Estera, a leading offshore law firm with offices in Bermuda and beyond. The two operated together under the Appleby name until Estera became independent in 2016. Another six million documents come from corporate registries in some 19 jurisdictions, mostly in the Caribbean. A smaller amount comes from the Singapore-based international trust and corporate services provider, Asiaciti Trust. The leaked data covers seven decades, from 1950 to 2016.

The Company
At the centre of the leak is Appleby, a law firm that helps corporations, financial institutions and high-net-worth individuals set up and register companies in offshore jurisdictions. Appleby has outposts in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey.

Founded in Bermuda and with a history dating back to the 1890s, it has become one of the largest and best known of about 10 major companies involved in the specialist arena. The leak shows the US dominates Appleby‘s client register, with more than 31,000 US addresses for clients. There were more than 14,000 UK addresses and 12,000 in Bermuda.

In contrast to Mossack Fonseca, the discredited firm at the centre of last year’s Panama Papers investigation, Appleby prides itself on being a leading member of the “magic circle” of top-ranking offshore service providers. It acted for the establishment offshore, providing the structures that helped to legally reduce their tax bills.

The Clients
As a whole, the Paradise Papers files expose offshore holdings of political leaders and their financiers as well as household-name companies that slash taxes through transactions conducted in secret. Financial deals of billionaires and celebrities are also revealed in the documents.

The Paradise Papers files include far more information about U.S. citizens, residents and companies than previous ICIJ investigations – at least 31,000 of them.

The offshore financial affairs of hundreds of politicians, multinationals, celebrities and high-net-worth individuals, some of them household names, have been revealed. The papers also throw light on the legal firms, financial institutions and accountants working in the sector and on the jurisdictions that adopt offshore tax rules to attract money. These are the stories so far:

  • Prince Charles campaigned to alter climate-change agreements without disclosing his private estate had an offshore financial interest in what he was promoting
  • Apple has protected its low-tax regime by using the Channel Island of Jersey
  • Formula 1 champion Lewis Hamilton avoided tax on his £16.5m luxury jet, the papers suggest
  • The Queen’s private estate invested about £10m offshore including a small amount in the company behind BrightHouse, a chain accused of irresponsible lending
  • One of President Donald Trump’s top administration officials kept a financial stake in a firm whose major partners include a Russian company part-owned by President Vladimir Putin’s son-in-law
  • An entrepreneur charged with managing the oil wealth of the struggling African state of Angola was paid more than $41m in just 20 months
  • A Lithuanian shopping mall partly owned by U2 star Bono is under investigation for potential tax evasion
  • How three stars of the hit BBC sitcom, Mrs Brown’s Boys, diverted more than £2m into an offshore tax-avoidance scheme
  • One of the world’s largest firms loaned a businessman previously accused of corruption $45m and asked him to negotiate mining rights in the DR Congo
  • The Isle of Man passed a law that would help tax evaders, the documents show
  • A key aide of Canada’s PM has been linked to offshore schemes that may have cost the nation millions of dollars in taxes, threatening to embarrass Justin Trudeau
  • Lord Ashcroft, a former Conservative party deputy chairman and a significant donor, may have broken the rules around how his offshore investments were managed. Other papers suggest he retained his non-dom tax status while in the House of Lords, despite claiming to have become resident in the UK
  • How questions were raised about who is controlling Everton FC
  • An oligarch with close links to the Kremlin may have secretly taken ownership of a company responsible for anti-money laundering checks on Russian cash
  • How a UK company exploited an anti-tax avoidance law to actually save itself tax
  • How millionaires in the UK are selling their assets to offshore companies only to become investment advisers to those companies, thereby avoiding tax
  • Private equity firm Blackstone avoided tens of millions of pounds in UK taxes on property deals in Glasgow and London
  • Billionaire Dermot Desmond’s exclusive private jet company used an offshore tax haven to avoid taxes