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Paradise Papers give snapshot of gaping loopholes in the global financial system

Paradise Papers give snapshot of gaping loopholes in the global financial system
UK services, territories and systems complicit 

5th November 2017, London – The Paradise Papers, released today, underline the lesson we learned from last year’s Panama Papers: the global financial system has been hijacked by those who wish to bury their identities and put their financial dealings out of sight from regulators, law enforcement agencies and others who have a legitimate interest. The UK, its Overseas Territories and Crown Dependencies are critical players in providing protection to this global elite through their professional services sector, weak money laundering oversight and anonymous corporate structures.

 Offshore financial secrecy is a well-known tool for those seeking to limit, avoid or evade their tax obligations. There is every reason to believe that with further analysis, the Paradise Papers will also reinforce the other key lesson learned from the Panama Papers: that secrecy and the weak links in the global financial system are used by a corrupt elite to hide their identity and launder stolen funds, whilst enjoying a life of luxury.

This offshore secrecy is enabled up by permissive regulation, poor oversight and the willing help of those who make the system work – banks, lawyers, accountants, estate agents and trust and company service providers. 

The UK Government knows this country has been a safe haven for corrupt individuals, but has yet to implement a number of key reforms it has promised that would make a more hostile environment for illicit wealth. For example, it has committed to – but not delivered – a register that would reveal the individuals hiding behind anonymous companies that purchase UK property.  There also remains no serious attempt to require the UK’s Overseas Territories and Crown Dependencies – such as Bermuda – to adopt international good practice, in the face of fierce lobbying from those jurisdictions.

Later this week Transparency International UK will publish new research on the UK companies performing services similar to Appleby and Mossack Fonseca.

Duncan Hames, Director of Policy Transparency International UK, said:

“These leaks provide a fascinating insight into many individual stories and the bigger picture is that a corrupt global elite is gaming the international financial system to hide their illicit wealth. This offshore secrecy industry allows corrupt officials to live a life of luxury with cash that has often been stolen from the very poorest populations in the world.” 

“Like the Panama Papers, the Paradise Papers tell us that this is not some fringe activity at the edge of an otherwise sound system. Offshore financial secrecy is rotten to the core, and the UK plays a disproportionately large role, ignoring what goes on in some of its Crown Dependencies and Overseas Territories, and failing to address the weaknesses in its own money laundering defences.”  

“Many of the UK’s promises to fight dirty money were made prior to the Brexit vote and the UK should now prove that it remains committed to upholding global standards and not entering a race to the bottom. As the UK realigns its economy post Brexit, what happens now is central to the future of this country. This future can either be built on dirty money, turning a blind eye to the destructive nature of corruption, or it can build a global Britain where business is based on the rule of law.”

Transparency International UK calls on the UK Government to immediately pursue the following actions to address the UK’s complicity in global corruption:

  • Publish the Anti-Corruption Strategy that was promised a year ago
  • Ensure the Overseas Territories and Crown Dependencies come into line with international good practice
  • Implement the long-delayed register of the owners of overseas companies purchasing UK property 


Dominic Kavakeb
020 3096 7695
079 6456 0340


Read 810 times Last modified on Monday, 6 November 2017 09:30

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