Panama, Paradise Leaks: Only Pakistan incisively probed Nawaz

January 31,2018

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KARACHI: The world showed little interest in Panama Papers and Paradise Papers practically and investigations could not go beyond announcements in most cases. Probes remained limited across the world, from resignation of Iceland prime minister to investigations against Shakira in Spain.

Sigmundur Daví, the premier of Iceland, who had resigned after his name appeared in the Panama Papers, reached the parliament again after being elected by the people. It very clearly showed how much seriously people in the world took the Panama Papers scandal. The European Union conducted bold investigations and blacklisted 17 countries or territories terming them tax havens.

However, it had to review its decision only within one-and-a-half months and it excluded eight countries including Panama from the list. The International Consortium of Investigative Journalists (ICIJ) itself admitted in a report that extraordinary investigations were conducted in Pakistan against former premier Nawaz Sharif.

He was disqualified as the prime minister of Pakistan. However, no serious investigations were carried out against another 436 Pakistanis, whose names had appeared in Panama Papers, and yet more 135, who were listed by Paradise Papers.

According to estimates, at least 11.5% of the world’s total wealth, estimated at Rs961,326 billion, or $8.7 trillion, had been stashed in secret offshore companies across the world. Also, 10% of Europe’s total wealth, one-third of Africa’s wealth and half of total wealth of Russia is lying in offshore companies. Multinational companies of the US keep 63% of their foreign profits in offshore companies, while Swiss banks hold Rs265193 billion or $2.4 trillion belonging to foreigners, which make 60% of their shell companies. All these facts and figures were published by US newspaper ‘New York Times’ in the form of an ICIJ report, complied in the wake of Panama Papers and Paradise Papers. However, only $500 million could be recovered in nearly two years as a result of the investigations launched across the world after disclosure of the Panama Papers.

Various countries have conducted the audit of various persons and firms on the basis of information provided in the Panama Papers. At least 123 audits are under way in Canada currently. Spain recovered $122 million, while federal police agency of southern Germany conducted various raids and froze two million euro.

The Denmark authorities collected data through unknown sources, and launched probe against 300 firms and 500-600 people. In the beginning of the current year, the founders of Mossack Fonseca firm were arrested in connection with Brazilian bribery scandal. Investigations are also continuing against chief of staff of prime minister of Malta. Germany’s department has also launched criminal investigations against some Trusts working in the country.

In Tunisia also, the anti-corruption department launched investigations against those whose names had appeared in Panama Papers. However, the probe was stopped by the judiciary and the Financial Unit of the government and a committee was formed by the Parliament, which is yet to start work.

FBME Bank’s name was included in the Paradise Papers, and the American government had banned it over the allegations of financing terrorism. The bank was a client of Appleby, and the US financial setup imposed a ban on it last year for financing terrorists and criminal groups, besides supporting Syria’s chemical weapons programme financially. Tax evasion charges are being probed against Columbian singer Shakira in Spain. She officially moved to Barcelona from the Bahamas in 2015, where she lives with her partner, Barca soccer player Gerard Pique, and the couple's two sons.

According to ICIJ latest report, the most important incident regarding Panama Papers took place in 2017 when Nawaz Sharif was disqualified as the prime minister of Pakistan in July. Nawaz Sharif’s three children’s names had appeared in Panama Papers, claiming that they were proprietors of the firms or they were their beneficial owners. Nawaz Sharif’s daughter, who’s widely believed to be successor of her father politically, was also mentioned in the leaks as owner of the firms based in British Virgin Islands.

The ICIJ report admitted that no other country in the world was shaken politically to such an extent by the Panama Papers disclosures except for Pakistan. According to Voice of America, when the Panama Papers disclosed the names of companies and persons for the first time in 2016 for owning offshore companies, hundreds of Pakistanis were included in the lists.

The most important among them were three children of Nawaz Sharif. The Supreme Court of Pakistan disqualified Nawaz from holding any public office and ordered for filing of corruption references against him and his three children in the accountability courts. However, no mentionable legal action was taken against hundreds of other Pakistanis whose names had appeared in the leaks. That was why various circles of the country did not show any special interest when Paradise Papers disclosed names of more Pakistanis for having offshore companies.

The Panama Papers and Paradise Papers disclosed names of very important personalities also, including politicians, former generals, and business and judiciary personalities. Some ministers of Pervez Musharraf cabinet were also included in these lists.

However, it merits mention here that ICIJ and other world media organisations link Nawaz Sharif’s disqualification with Panama Papers, which is factually wrong. Firstly, Nawaz Sharif’s name was not mentioned in the Panama leaks, and he also did not own any offshore company. The Supreme Court disqualified him over Iqama (work permit) and not over Panama. Secondly, Maryam Nawaz is declared the owner of two firms based in British Virgin Islands, but the territory had not been included in the list of 17 countries and territories, blacklisted by the European Union as tax havens.

In the beginning of last month, the EU blacklisted various countries and territories including American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, the Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad & Tobago, Tunisia and the UAE. Appleby has been registered in Bermuda, and it is not included in the EU’s black list.

According to a recent French news agency report, the EU has excluded eight countries including Panama from the black list. Other such countries include Barbados, Grenada, Mongolia, South Korea, Tunisia, Macau and the UAE. Most of the information leaked in Paradise Papers belongs to legal firm Appleby. The Appleby has announced taking legal action against British newspaper Guardian and BBC, and demanded that all documents containing leaked information should be handed over to it. However, Guardian has announced that it would face the legal proceedings, if any. As many as 13.4 million documents of the Paradise Papers were acquired by German newspaper Süddeutsche Zeitung, and then shared these documents with the international consortium of journalists. Besides Panorama for the BBC, 381 journalists from 100 media organisations including Guardian, in 67 countries worked with the leaked information. BBC says it is unaware of the original source of these documents.

After disclosures of Panama Papers, the major occurrences include: resignation by Iceland prime minister, disqualification of Nawaz Sharif as prime minister of Pakistan by the Supreme Court, investigation against Argentina’s President Mauricio Macri, killing of Malta journalist Daphne Caruana Galizia in a car bomb blast, allegations of $2 billion corruption against Russian president and his associates, closure of offshore firm Mossack Fonseca and arrest of its owners and introduction of new anti-corruption laws in 13 countries including Britain.

In April 2016, 500 Indians' secrete offshore businesses were revealed in the Panama Papers. Indian Prime Minister Modi promised to take strict action against those having illegal accounts aboard. A team was constituted to investigate the Panama Papers. The Paradise Papers revealed the names of 47 Indian personalities, including State Minister Jenat Singh Sinha, BJP Rajia Sabha member R.K Sinha, Congress leader Sachin Pilot, Bollywood actor Amitabh Bachchan and Sanjay Dutt's wife Manita Dutt.

The Indian finance minister said in Rajia Sabha that India was investigating every account in the Panama Papers. Citing the disqualification of Pakistan's former Prime Minister Nawaz Sharif, he said, “Our country has its own law. Our system is not like the system in the neighbouring country where a person is disqualified first and then a trial starts.”

The Indian Supreme Court also rejected a request to constitute a separate special investigation team (SIT). The Supreme Court said a multi-agency group comprising Central Board of Direct Taxes, Reserve Bank of India, Enforcement Directorate and Financial Intelligence Unit were like SIT. The court was told that the government had already submitted seven reports on the offshore companies. The government did not register an FIR against anyone. After the Paradise Papers, the Indian government was of the view the multi-agency group would also investigate it and obtain details of tax returns.

Iceland was the first victim of the Panama Leaks, with names of its two prime ministers in it. Prime Minister Sigmundur Gunnlaugsson had to resign as a result of protests. Sigmundur formed his new political "Centre Party" in early 2017, and in the parliamentary elections held on October 28, not only he won but his new party also bagged seven seats. The name of Bjarni Benediktsson, who became prime minister after Sigmundur, was also in the Panama Leaks, for which he was severely criticised. However, his Independent Party got seats more than all in the elections held in the end of October. Both former prime ministers, whose names were in the Panama Papers, were elected members of the parliament.

No action was taken against anyone for offshore companies in different countries after the onset of the Paradise Papers. An American newspaper wrote that the revelations in the Paradise Papers were sad but no change seemed in sight. There is also silence in many counties like Ireland, Switzerland and Holland. Similarly, the names of companies, high-ranking officers and politicians appeared in the Panama Papers, as a result of which, some people had to resign, investigations were initiated but no legal reforms of any kind were initiated. A demand for investigations at the Congress level gained strength from many US senators but nothing happened. On the other side, Revenue Agency of Canada hinted at investigations. Spain's Tax Investigation Agency has also announced investigations.

A British newspaper wrote that neither any severe reaction like in the Panama Papers came in the Paradise Papers across the world nor people were seen taking to the streets, whereas just a crowd of 10,000 in Iceland had sent home the elected prime minister after the leaks. A US paper had written the Panama Papers could create a worst crisis, but Brexit led to the emergence of rightwing nationalism and Donald Trump was elected the US president and, thus, Panama Papers protests ended. According to the newspaper, the protests neither affected the rich and powerful nor put any effect on them.

It is a fact that there are thousands of people in the world who developed their businesses with hard work, dedication and honesty. Besides playing a role in improving the economy of their countries, they also took part welfare work. They too had to pass through many legal processes and difficulties. Many elements made them a butt of criticism of many kinds to create hurdles to their businesses. However, today they have earned a name in the world with their hard work and strategy. There are many big names who legally established offshore companies. Experts say having an offshore company or making property though it is not illegal. However, compliance with the regulations of the country is necessary. This is the reason there was no storm after the leaks.

However, unruly protests on the issues may become a cause to bring a few people to the tax net or cause resignations of one or two people from government offices, and nothing else. But basic economic injustice could not be corrected. To pin hope on these leaks that they would become a source of global social change, like protests brought about French, Chinese or Russian revolutions and ended kingships, was futile.

The Guardian writes that the purpose of the Paradise Papers is not the revelations of tax evasion but it aimed to malign politics and democracy. The basic target of all these leaks is capitalism.


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