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Opposition ToRs ignore ICIJ’s goal of exposing leaders, businessmen

By Ahmad Noorani
May 05, 2016

ISLAMABAD: Starting from a glaring example of conflict of interest, the opposition parties’ proposed ToRs for the Panama Commission completely ignore the basic philosophy of a massive workout by the International Consortium of Investigative Journalists (ICIJ), which is exposing offshore companies set up by public office holders and powerful businessmen in different tax havens since long.

The latest leak of the ICIJ was named the ‘Panama Papers’ as this was based on documents retrieved from the record of a Panama-based law firm Mossack Fonseca, which facilitates people to set up offshore companies in different tax havens. There were otherThere were other leaks regarding offshore companies as well coming from different sources and revealing many other names of important people from across the world. ICIJ’s previous leak in 2013 also disclosed names of 39 Pakistanis along with all documents. 

There are hundreds of law firms in the world which facilitate businessmen and rich people in setting up offshore companies in tax havens like British Virgin Island, Panama, Bahamas or Niue and some others. 

‘Mossack Fonseca’ based in Panama is just one of these law firms. There are hundreds of other such law firms in different countries, dozens only in the US, Shabbar Zaidi, a senior tax lawyer, told The News that he has been facilitating people in this regard since long. 

Offshore companies, in some cases, are used for the management of assets after fulfilling legal formalities, but this is a known fact that in majority of the cases, public office holders and businessmen use these offshore companies to park their monies they have made through tax evasion or earned using illegal means. 

ICIJ’s two projects of exposing hidden offshore wealth possessed by high and mighty of different nations were meant to inform the people of these countries about offshore assets of their leaders. 

The basic objective of leaks was that people can hold their leaders accountable, can work to make the system transparent and stop means of illegal transferring of wealth to these offshore havens. The focus of their work was never one law firm data or they have anything to do with Mossack Fonseca or Panama as a country. 

The basic issue is that the people holding top public offices or are part of powerful civil or military bureaucracy or are the top businessmen – in some cases – manage to make money through corruption, kickbacks, by using illegal means or by evading taxes and transfer these looted monies outside the country and hide them in bank accounts associated with secret and undeclared offshore companies. During last 30 years, the monies in Pakistan were made through kickbacks, loan write offs and tax evasion. It will be meaningless if all Pakistani owners of offshore companies are not investigated. The process of judicial commission will become insignificant and inconsequential if all those who got their loans written off and evaded taxes by sending looted money to offshore havens are not probed.

 It is absolutely irrational to insist to probe only those offshore companies’ owners who were clients of a specific law firm and were disclosed by ICIJ in its latest leak on offshores and ignore all those named earlier or found to have massive undeclared offshore wealth much more as compare to all others. This very stance is absurd and has no weight in it.

A top leader from the opposition confided to The News Monday that one of the PPP leaders engaged in drafting of opposition’s ToRs for Panama Commission is indirectly linked to the offshore companies of a very rich businessman-politician. This rich businessman, he said, possesses foreign wealth and his offshore companies are not named in Panama Papers. 

The Opposition leader said though the government’s ToRs were not elaborative enough and Opposition parties were tight in their stance to suggest more and effective ToRs but it’s a fact that government already announced its willingness for accountability of the prime minister and his family on priority. He said suggestion of effective ToRs was a good move of the Opposition parties but there must not have been any attempt to save some specific people by ridiculously confining domain of commission to those offshore companies’ owners who were clients of a specific law firm in Panama Papers. 

The Opposition leader said there must be across the board accountability and offshore companies owners must be held accountable through the commission. He said in future no lawyer will be allowed to maneuver the Opposition’s strategy.

Two points in opposition ToRs 2(vi) and (vii) reads; (vi) Lifting the veil of incorporation, who was the person(s) from whom the aforesaid properties were purchased? (vii) It shall further be probed as to when the properties were purchased by the seller and with similar disclosure of bank and income tax statements of the seller.

These two points are meant to discover the owner from whom Neilson and Nescoll were purchased by prime minister’s family in 2006. 

Some opposition leaders believe that both these companies were already owned by the members of the Sharif family and in 2006 companies were only transferred from those members to other members of the Sharif family. However, according to some lawyers, even these two points may also not be helpful. 

These lawyers suggest that often multiple layers of secrecy are maintained to hide ultimate beneficial owners of the offshore companies. “Even at the time such transfer within family, the companies would have been sold to some other people, may be residents of countries considered as tax havens, and then transferred in the name of latest owners. So basically, international assistance would be needed to track complete chain company transfers during last 23 years.” a lawyer commented.