What are the Panama Papers?

A guide to
history's biggest data leak
What is Mossack Fonseca, how big is it, and who uses offshore rms? Key questions about one of the
biggest ever data leaks

Luke Harding
Tuesday 5 April 2016 10.42BST

The Panama Papers are an unprecedented leak of 11.5m les from the database of the
worlds fourth biggest oshore law rm, Mossack Fonseca. The records were obtained from
an anonymous source by the German newspaper Sddeutsche Zeitung, which shared them
with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared
them with a large network of international partners, including the Guardian and the BBC.

Whatdotheyreveal?
The documents show the myriad ways in which the rich can exploit secretive oshore tax
regimes. Twelve national leaders are among 143 politicians, their families and close
associates from around the world known to have been using oshore tax havens.
A $2bn trail leads all the way to Vladimir Putin. The Russian presidents best friend a
cellist called Sergei Roldugin is at the centre of a scheme in which money from Russian
state banks is hidden oshore. Some of it ends up in a ski resort where in 2013 Putins
daughter Katerina got married.
Among national leaders with oshore wealth are Nawaz Sharif, Pakistans prime minister;
Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro
Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypts former president; and the
prime minister of Iceland, Sigmundur Dav Gunnlaugsson.
An oshore investment fund run by the father of British prime minister David Cameron
avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents to sign
its paperwork. The fund has been registered with HM Revenue and Customs since its
inception and has led detailed tax returns every year.
A lengthier overview of the revelations can be found here.

WhatisMossackFonseca?
It is a Panama-based law rm whose services include incorporating companies in oshore
jurisdictions such as the British Virgin Islands. It administers oshore rms for a yearly fee.
Other services include wealth management.

Whereisitbased?
The rm is Panamanian but runs a worldwide operation. Its website boasts of a global
network with 600 people working in 42 countries. It has franchises around the world, where
separately owned aliates sign up new customers and have exclusive rights to use its
brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the
British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle
of Man.

Howbigisit?
Mossack Fonseca is the worlds fourth biggest provider of oshore services. It has acted for
more than 300,000 companies. There is a strong UK connection. More than half of the
companies are registered in British-administered tax havens, as well as in the UK itself.

Howmuchdatahasbeenleaked?
A lot. The leak is one of the biggest ever larger than the US diplomatic cables released by
WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward
Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from
Mossack Fonsecas internal database.

Areallpeoplewhouseoffshorestructurescrooks?
No. Using oshore structures is entirely legal. There are many legitimate reasons for doing
so. Business people in countries such as Russia and Ukraine typically put their assets
oshore to defend them from raids by criminals, and to get around hard currency
restrictions. Others use oshore for reasons of inheritance and estate planning.

Aresomepeoplewhouseoffshorestructurescrooks?
Yes. In a speech last year in Singapore, David Cameron said the corrupt, criminals and
money launderers take advantage of anonymous company structures. The government is
trying to do something about this. It wants to set up a central register that will reveal the
benecial owners of oshore companies. From June, UK companies will have to reveal their
signicant owners for the rst time.

WhatdoesMossackFonsecasayabouttheleak?
The rm wont discuss specic cases of alleged wrongdoing, citing client condentiality. But
it robustly defends its conduct. Mossack Fonseca says it complies with anti-moneylaundering laws and carries out thorough due diligence on all its clients. It says it regrets
any misuse of its services and tries actively to prevent it. The rm says it cannot be blamed
for failings by intermediaries, who include banks, law rms and accountants.
Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg,
Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopkins