Pandora Papers case: US major players in 'offshore' world

Ground Report | New Delhi: Pandora Papers case; In recent years, the US has become one of the "major players in the offshore world," according to the investigation coordinated by the International Consortium of Investigative Journalists (ICIJ) and published this Sunday under the name of Pandora Papers.

Pandora Papers case

According to the ICIJ, while the US is the best-placed country to end financial abuse, the country " has more interest in forcing other countries to share information about Americans with offshore accounts than in share information about money moving through US bank accounts, companies, and trusts. "

The Pandora Papers states that, in 2014, the US refused to join an agreement, supported by more than 100 jurisdictions, that would oblige US financial institutions to share information on foreign assets.

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In this context, the traditional image of tax havens as "islands with palm trees" has gradually changed, with more than a dozen US states, including South Dakota and Nevada, becoming "leaders in the world. business of selling financial confidentiality. " At the same time, restrictive policies aimed at limiting tax abuses did not affect the new focus of the 'offshore' system, since 17 states of the North American country are among the 20 least restrictive jurisdictions in the world, according to the study by Israeli researcher Adam Hofri- Winogradow.

"Greater destinations for foreign assets"

In particular, thanks to progressively passed laws in South Dakota offering protection and benefits to fiduciary clients in the US and abroad, tens of millions of dollars have been moved from tax havens in the Caribbean and Europe to South Dakota, one of the "greatest foreign asset destinations." Thus, according to the investigation, the assets of the clients in the trusts of that state have more than quadrupled during the last decade and reached 360,000 million dollars.

ALSO READ: List of Indians in Pandora Papers 

In total, the leaked documents helped ICIJ and The Washington Post identify around 30 US-based trusts linked to foreigners accused of "misconduct" or whose companies were accused of various wrongdoing. On the other hand, it is noted that the largest law firm in the US, Baker McKenzie, helped "create the modern 'offshore' system".

"Clearly the US is a great, great gap in the world," ICIJ quotes the words of Yehuda Shaffer, former director of the Israeli financial intelligence unit.

What does 'Pandora Papers' reveal?

An investigation by 600 journalists around the world has revealed how many rich and powerful people around the world are hiding wealth through "multi-layer trusts". The Pandora Papers contain more than 11 million leaked files, revealing 29,000 off-the-shelf companies and private trusts set up by 14 global corporate services firms.

ALSO READ: What are Pandora Papers?

According to the analysis of 'Pandora Papers', there are two main reasons for setting up these trusts:

• 1. For individuals to hide their true identity and distance themselves from offshore entities, so as to make it difficult for the tax authorities to reach them

• 2. Protecting cash, shareholders, real estate, art, aircraft, yachts and other such investments from creditors and law enforcement.

• Anil Ambani, who was asked to pay more than $700 million to three Chinese state-controlled banks, declared himself bankrupt in a UK court. He has an offshore company with 18 assets.

• Nirav Modi- Nirav Modi, who fled India in January 2018 following the Rs 13,500-crore Punjab National Bank (PNB) scam, asked his sister Purvi to act as the corporate protector of a trust formed through Trident Trust Company, Singapore A firm was established in the British Virgin Islands.

• According to the report, Biocon promoter Kiran Mazumdar Shaw's husband set up a trust with a person who has been banned by SEBI for insider trading.

• Indian cricket superstar and Rajya Sabha parliamentarian Sachin Tendulkar and his family members are also included in the Pandora paper. 

• Sachin's name is also included in the Pandora Papers as the owner of an offshore company in the British Virgin Islands, which was closed in 2016.

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