People have been asking me what I think about the Pandora Papers so I thought I should write a blog post on it.
The so-called “Pandora Papers” are the latest leak of offshore financial records published earlier this month by a consortium of investigative journalists that exposed secret offshore assets of a number of current and former politicians, public officials, celebrities, billionaires and business leaders. Some of the persons named were former British Prime Minister Tony Blair, the King of Jordan, Vladimir Putin, the Prime Minister of Lebanon, and the governor of Lebanon’s central bank, to name a few.
The implication from the various news media outlets is that the persons named were involved in some kind of tax avoidance scheme merely by holding their assets through an offshore company or trust. That is not necessarily true though. Many people set up offshore structures for other reasons such as asset protection, estate planning, doing business abroad, or simply to maintain anonymity. There is nothing illegal or sinister about that. I have set up offshore structures for clients where there was no tax advantage but was done purely to protect their assets from potential lawsuits. Lawyers called it “judgement proofing” yourself.
My view is that this story is nothing new. It’s the same old rhetoric put out by a few media companies but with different names. A few years ago the “Panama Papers” revealed the names of high net worth individuals using offshore companies set up by the former Panamanian firm Mossack Fonseca. They even made a movie about it starring Meryl Streep and Gary Oldman called “The Laundromat”. Incidentally, Mossack Fonseca approached me many years ago about setting up and running a Canadian office for them.
Then there was the “Paradise Papers” out of Bermuda which revealed financial records of a number of high profile companies and individuals including Apple, Facebook, Nike, Prince Charles, and the Queen… after the records of law firm Appleby had been hacked.
I remember when the Paradise Papers story first came out, I was walking along Victoria Street in Bermuda on my way to pick up a pizza from “La Trattoria” (my favourite Italian restaurant in Bermuda) when I passed by a cameraman and a reporter from the BBC (that’s the British Broadcasting Corporation not the Bermuda Broadcasting Corporation). The reporter was speaking into the camera in a hushed voice saying he had to be very careful because he was standing outside the offices of Appelby, … like as if something sinister or dangerous was about to happen to him if he spoke in his normal voice. What rubbish.
These types of stories will continue to be published in the future because they sell news, but really, there is nothing new here.
If anyone is interested in asset protection or doing business using an offshore company, always consult a lawyer experienced in these types of structures first to make sure everything is above board.