2.6 Terrabyte-sized data leak mushrooms any other leak of its kind, highlighting the importance of financial transparency for businesses in the UK and abroad
An unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca, has raised the issue of business transparency in the digital age.
The records, labelled the Panama Papers, were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung. It reveals the shocking ways in which some of the world’s most influential people have exploited offshore tax regimes, including twelve national leaders among 143 politicians.
According to Gavin Cunningham, forensic services partner at accountancy firm Menzies LLP, and formerly a principal investigator at the SFO, the The International Consortium of Investigative Journalists (ICIJ) release of new Panama Papers data is a “small but significant victory for all those seeking greater transparency in business.”
“For businesses that find themselves the victims of fraud, tracing the true identity of those involved is a huge challenge, especially when organisations are frequently hidden behind a smokescreen of offshore companies and trusts. The Panama Papers are a significant boost to financial investigators in tracking down the individuals behind these opaque structures designed to conceal ownership and control,” he said.
“Increased transparency is sought after, however the pace of change will be dictated by Governmental legislation. While PSC regulations now require businesses incorporated in the UK to keep a register of anyone who has a significant shareholding and/or operating interest, international transparency requirements vary hugely from jurisdiction to jurisdiction, despite global initiatives such as FATCA legislation and OECD efforts,” he added.
The 2.6 Terrabyte-sized leak is the largest in the history of leaks, overshadowing the WikiLeaks scandal of 2013. The Panama Papers have called attention to the use of offshore structures, which is entirely legal. Businesses in countries with socio-political volatility and high blue-collar crime rates depend on off-shore account to protect their savings, for example, which is a legitimate reason. However, considering the volume of cases of misuse and fraud, the need for financial transparency is more crucial now in the digital age than ever before.
