Obscured by figurehead directors, untraceable money transfers and anonymous company ownerships, these Canadians paid for the secrecy promised by Mossack Fonseca, a Panamanian law firm renowned internationally for establishing shell companies.
Much of this is perfectly legal. For some international business transactions, offshore company registration is a logical choice. And there are international laws and treaties facilitating the legal flow of money into tax-friendly jurisdictions.
But it comes at a tremendous cost to the public interest.
Currently, Canadians have declared $199 billion in offshore tax haven investments around the world, according to Statistics Canada.But experts say that figure is a small fraction of the Canadian offshore wealth that goes undeclared.
The precise annual cost to Canadian tax coffers is unknowable. But credible estimates peg Canada’s tax losses to offshore havens at between $6 billion and $7.8 billion each year.
Tax avoidance — the legal movement of wealth to offshore bank accounts in order to minimize tax burdens — is a grey area. But there is a much darker element.
Terrorist financing, money laundering and corruption are among the byproducts of offshore secrecy. The leaked records reveal a pattern of covert manoeuvres by banks, lawyers and companies concealing suspect transactions or manipulated records in ways that facilitated illegality.
“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the University of California Berkeley and author of The Hidden Wealth of Nations: The Scourge of Tax Havens who was briefed on the details of the leak.
In the largest media collaboration ever undertaken, more than 370 journalists working in 25 languages dug into 11.5 million documents that revealed Mossack Fonseca’s inner workings and traced the secret dealings of the firm’s customers. The more than 100 news organizations involved shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laundering experts and law-enforcement officials.
The Toronto Star and the CBC/Radio Canada are the only Canadian media with access to the records, which include detailed client information such as emails, legal letters, correspondence, financial spreadsheets, corporate records and passport images of clients.
Original Article
Source: thestar.com/
Author: Robert Cribb Foreign, Marco Chown Oved
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