A second wave of leaks about the use of offshore accounts is making its way through the media. The first was dubbed the Panama Papers; the latest, the Paradise Papers.
What exactly are the Paradise Papers? The term refers to over 13.4 million documents connected primarily to a law firm that aids the wealthy with estate planning matters.
Why has the release of these papers caused a stir? The information contained within these documents provides more than just a name and estimated worth — it also provides connections to funding sources.
The New York Times elaborates on these connections in a recent piece. The piece states that the commerce secretary is connected to a shipping company with links to Russian President Vladimir Putin. Apple has adamantly stated that it does not use some “Caribbean island” to stash earnings. Although this has held true, the technology giant was discovered to instead use an island in the English Channel.
Why release these documents? The release is likely to result in transparency. In some cases, the loss of anonymity is the only penalty. The implications can be much more dangerous for those that have taken funds from questionable sources.
Was the use of offshore accounts illegal? Although the information released to the public has caused a bit of a stir, the question of whether or not the use of offshore accounts disclosed within these documents was illegal remains. Thus far, it appears no laws were broken.
If the accounts are fully disclosed and transparent, it is unlikely any laws were broken.
What can others with offshore accounts learn from the Paradise Papers? It is important that those who hold offshore accounts are in compliance with tax law. These accounts are under scrutiny and a failure to comply with applicable laws can come with serious penalties.