The ‘Paradise Papers’ revelations published on November 5 by the International Consortium of Investigative Journalists (ICIJ) and its partners, about politicians and world leaders and multinational corporations, show how the rich and powerful around the world are able to hide wealth through complex and opaque financial structures which allow them to keep their business dealings secret. These secret structures can also be used by the corrupt, says the anti-corruption campaign group Transparency International (TI).
Delia Ferreira Rubio, chair of Transparency International said: “The high-profile list of people and corporations in this latest scandal is shocking. Clearly financial oversight authorities and lawmakers must realise the system is broken. Complex, cross-border structures are being used to facilitate a wide range of secret activity, which could include corruption, fraud and abusive tax schemes.
“Too many people are finding ways to hide wealth. If that wealth is from the proceeds of corruption it means criminals are being given the means to live off ill-gotten gains. Too often money that should go to improve the lives of ordinary people is siphoned off by corrupt officials and then used to fund luxury lifestyles. This must be stopped.”
On anti-money laundering, TI says that law firms and intermediaries who set up offshore companies and trusts should know their clients and report suspicious activities to authorities. They should not routinely offer layers of secrecy to their clients. The campaigners call for special due diligence requirements that are enforced by the vendors of luxury items, including property in centres like London and New York, to ensure that the money used for purchases is not the proceeds of corruption. TI says that the Paradise Papers must not only lead to investigations but should show how important it is to end secrecy in the financial system.
