If you thought things had quietened down a bit on the Panama Papers front, the latest development seems likely to stir things up again quite nicely.
The International Consortium of Investigative Journalists has just released a vast searchable Offshore Leaks Database, containing details of almost 320,000 offshore entities from more than 200 countries and territories, along with the names of tens of thousands of people and companies behind them.
Details from both the Panama Papers and the ICIJ’s earlier Offshore Leaks investigation, have been collated into a database that allows you, for example, to search for the ownership of a specific company and to see their connections, such as officers, intermediaries and addresses, then to follow those trails to unravel some complex relationships and structures.
Alternatively, you could browse through every offshore entity located in a certain country or jurisdiction. If you’re interested in the British Virgin Islands, for example, it would take some time: it tops the list of jurisdictions with the most offshore entities, with a whopping 151,588. To put that in context, that’s more than the next four (Panama, Bahamas, Seychelles and Samoa) combined.
The ICIJ is very clear in pointing out that offshore entities, like companies and trusts, have legitimate uses and that inclusion in the database does not imply any improper or illegal behaviour.
A fair point, but nevertheless it does seem likely that this vast source of information is going to generate another global wave of headlines around corporate secrecy and its usefulness to those involved in shady activities once the world’s media start drilling down into the database and sharing what they find.
With impeccable timing, the ICIJ has released its database just before UK Prime Minister David Cameron hosts an international anti-corruption summit in London, tomorrow.
The summit has already been making the news – although almost certainly not in the way Mr Cameron would have wished – due to his comments, during a conversation with the Queen about the event, regarding corruption levels in Afghanistan and Nigeria.
Coverage for that story seems to have rather overshadowed another interesting angle to the summit: it has also been reported that two of the biggest players in the offshore entities world – the British Virgin Islands and Panama – were not invited to attend.
The summit, which will bring together world leaders and representatives from the business world, law enforcement, sporting bodies, international organisations and civil society, is focused on agreeing practical steps to expose corruption, punish the offenders and support those affected, and ‘drive out the culture of corruption wherever it exists’.
One of the summit sessions will look at how the international community ‘can work together to lift the lid on practices that allow the corrupt to act with impunity’: a category into which lack of transparency over ownership arrangements would certainly seem to fall.
Given the momentum for change following the original release of the Panama Papers in April – only last week, the US Treasury Department sent a proposal to Congress for new legislation, under which all companies established in the US would have to send beneficial ownership information to the Treasury – perhaps we really are now at a turning point. Only time will tell.
The international environment in relation to financial crime and corruption is constantly evolving and the ICA and ICT are always developing our qualifications to ensure that anti money laundering and other financial professionals have the information and skills to deal not only with the status quo but to be ready for whatever the future might hold.
For more information on the full range of ICA qualifications, including our Advanced Certificate in Practical Customer Due Diligence – which includes issues unravelling beneficial ownership and ownership structures – please visit our website.
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