Paradise Papers: Huge New Leak Reveals How Wealthy & Powerful Invest Offshore

Paradise Papers: Huge New Leak Reveals How Wealthy & Powerful Invest Offshore

A huge new leak of financial documents has revealed how the powerful and ultra-wealthy, including the Queen's private estate, secretly invest vast amounts of cash in offshore tax havens.

Donald Trump's commerce secretary is shown to have a stake in a firm dealing with Russians sanctioned by the US.

The leak, dubbed the Paradise Papers, contains 13.4m documents, mostly from one leading firm in offshore finance.

BBC Panorama is part of nearly 100 media groups investigating the papers.

As with last year's Panama Papers leak, the documents were obtained by the German newspaper Süddeutsche Zeitung, which called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation.

Sunday's revelations form only a small part of a week of disclosures that will expose the tax and financial affairs of some of the hundreds of people and companies named in the data, some with strong UK connections.

Many of the stories focus on how politicians, multinationals, celebrities and high-net-worth individuals use complex structures of trusts, foundations and shell companies to protect their cash from tax officials or hide their dealings behind a veil of secrecy.

The vast majority of the transactions involve no legal wrongdoing.

Other key stories being released on Sunday are:

  • Lord Ashcroft, a former Conservative party deputy chairman and a significant donor, may have ignored rules around how his offshore investments were managed. Other papers suggest he retained his non-dom status while in the House of Lords, despite reports he had become a permanent tax resident in the UK
  • How questions were raised about the funding of a major shareholding in Everton FC

The other media partners may be covering different stories affecting their regions.

How is the Queen involved?

The Paradise Papers show that about £10m ($13m) of the Queen's private money was invested offshore.

It was put into funds in the Cayman Islands and Bermuda by the Duchy of Lancaster, which provides the Queen with an income and handles investments for her £500m private estate.

There is nothing illegal in the investments and no suggestion that the Queen is not paying tax, but questions may be asked about whether the monarch should be investing in offshore finance.

There were small investments in the rent-to-buy retailer BrightHouse, which has been accused of exploiting the poor, and the Threshers chain of off-licences, which later went bust owing £17.5m in tax and costing almost 6,000 people their jobs.

The Duchy said it was not involved in decisions made by funds and there is no suggestion the Queen had any knowledge of the specific investments made on her behalf.

The Duchy has in the past said it gives "ongoing consideration regarding any of its acts or omissions that could adversely impact the reputation" of the Queen, who it says takes "a keen interest" in the estate.

Embarrassment for Ross and Trump?

Wilbur Ross helped stave off bankruptcy for Donald Trump in the 1990s and was later appointed commerce secretary in Mr Trump's administration.

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The documents reveal Mr Ross has retained an interest in a shipping company which earns millions of dollars a year transporting oil and gas for a Russian energy firm whose shareholders include Vladimir Putin's son-in-law and two men subject to US sanctions.

It will again raise questions about the Russian connections of Donald Trump's team. His presidency has been dogged by allegations that Russians colluded to try to influence the outcome of last year's US election. He has called the allegations "fake news".

Where does the leak come from?

Most of the data comes from a company called Appleby, a Bermuda-based legal services provider at the top end of the offshore industry, helping clients set up in overseas jurisdictions with low or zero tax rates.

Its documents, and others mainly from corporate registries in Caribbean jurisdictions, were obtained by Süddeutsche Zeitung. It has not revealed the source.

The media partners say the investigation is in the public interest because data leaks from the world of offshore have repeatedly exposed wrongdoing.

In response to the leaks, Appleby said it was "satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients", adding: "We do not tolerate illegal behaviour."

What exactly is offshore finance?

Essentially it's about a place outside of your own nation's regulations to which companies or individuals can reroute money, assets or profits to take advantage of lower taxes.

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