Earlier this month, the International Consortium of Investigative Journalists (ICJI) published a searchable database of some of the information revealed as part of the Panama Papers investigation. The ICIJ has made it very clear on their website that no-one named in the database is thereby implicated in any wrong doing.
The database covers 40 years but only represents a fraction of the more than 11.5 million files leaked from Mossack Fonseca (the firm at the centre of the original leak), and shows company owners, proxies and intermediaries.
The leak, which purportedly caused the Prime Minister of Iceland to resign, made the use of tax havens a very public affair and, for some, a matter of social justice.
As a result of the Panama Papers leak, there is now a global trend towards closing loopholes and cracking down on tax evasion.
The UK announced in November 2015 plans to make a UK register of beneficial owners of companies – those who have more than a 25% shareholding- available to the public. This is expected to go live in June 2016 and is available via the Companies House website. However, the register will only be accessible to “competent authorities” and those who can show they have a legitimate interest in accessing the information, not the general public.
In the same document, the UK also confirmed its intention to make sure that trustees obtain accurate details of a trust’s settlor, trustees and beneficiaries. These details would be held in a central register but would only be accessible to “domestic competent authorities” and the information would only be held in relation to trusts that generate tax consequences in the UK.
France’s Minister of Finance Michel Sapin announced in April 2016 that France would make public their register of beneficial owners of trusts, which was established in 2013. President Obama has urged Congress to take steps to tighten transparency rules and to close loopholes used by foreigners to hide wealth in anonymous entities in the US.
A number of countries have now also signed up to the Organisation for Economic Co-Operation and Development’s Common Reporting Standard (CRS), bringing the total number of jurisdictions who have subscribed to the CRS at the date of writing to 101. Amongst the new cohort is Panama, Bahrain, and Lebanon.
The CRS is an agreement to share information on assets and income in one country that relates to another. It is envisaged that the information would be shared routinely and systematically, whereas until now it has been shared only upon request.
In a country where revealing someone’s tax affairs is a criminal offence, it will be interesting to see how the UK reacts in the long-term to this global movement towards tax transparency.