About the Panama Papers

By Frederik Obermaier, Bastian Obermayer, Vanessa Wormer and

Wolfgang Jaschensky
http://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495
adf4/
Over a year ago, an anonymous source contacted the Sddeutsche
Zeitung (SZ) and submitted encrypted internal documents from Mossack
Fonseca, a Panamanian law firm that sells anonymous offshore
companies around the world. These shell firms enable their owners to
cover up their business dealings, no matter how shady.
In the months that followed, the number of documents continued to
grow far beyond the original leak. Ultimately, SZ acquired about 2.6
terabytes of data, making the leak the biggest that journalists had ever
worked with. The source wanted neither financial compensation nor
anything else in return, apart from a few security measures.
The data provides rare insights into a world that can only exist in the
shadows. It proves how a global industry led by major banks, legal firms,
and asset management companies secretly manages the estates of the
worlds rich and famous: from politicians, Fifa officials, fraudsters and
drug smugglers, to celebrities and professional athletes.

A group effort
The Sddeutsche Zeitung decided to analyze the data in cooperation with
the International Consortium of Investigative Journalists (ICIJ). ICIJ
had already coordinated the research for past projects that SZ was also
involved in, among them Offshore Leaks, Lux Leaks, and Swiss Leaks.
Panama Papers is the biggest-ever international cooperation of its kind.
In the past 12 months, around 400 journalists from more than 100
media organizations in over 80 countries have taken part in researching
the documents. These have included teams from the Guardian and the
BBC in England, Le Monde in France, and La Nacin in Argentina. In
Germany, SZ journalists have cooperated with their colleagues from two
public broadcasters, NDR and WDR. Journalists from the
Swiss Sonntagszeitung and the Austrian weekly Falter have also worked
on the project, as have their colleagues at ORF, Austrias national public

broadcaster. The international team initially met in Washington,

Munich, Lillehammer and London to map out the research approach.

Making of
The data
The Panama Papers include approximately 11.5 million documents
more than the combined total of the Wikileaks Cablegate, Offshore
Leaks, Lux Leaks, and Swiss Leaks. The data primarily comprises emails, pdf files, photo files, and excerpts of an internal Mossack Fonseca
database. It covers a period spanning from the 1970s to the spring of
2016.

Moreover, the journalists crosschecked a large number of documents,

including passport copies. About two years ago, a whistleblower had
already sold internal Mossack Fonseca data to the German authorities,
but the dataset was much older and smaller in scope: while it addressed
a few hundred offshore companies, the Panama Papers provide data on
some 214,000 companies. In the wake of the data purchase, last year
investigators searched the homes and offices of about 100 people. The
Commerzbank was also raided. As a consequence of their business
dealings with Mossack Fonseca, Commerzbank, HSH Nordbank, and
Hypovereinsbank agreed to pay fines of around 20 million euros,
respectively. Since then, other countries have also acquired data from the
initial smaller leak, among them the United States, the UK, and Iceland.

The system
The leaked data is structured as follows: Mossack Fonseca created a
folder for each shell firm. Each folder contains e-mails, contracts,
transcripts, and scanned documents. In some instances, there are several
thousand pages of documentation. First, the data had to be
systematically indexed to make searching through this sea of information
possible. To this end, the Sddeutsche Zeitung used Nuix, the same
program that international investigators work with. Sddeutsche
Zeitung and ICIJ uploaded millions of documents onto highperformance computers. They applied optical character recognition
(OCR) to transform data into machine-readable and easy to search files.
The process turned images such as scanned IDs and signed contracts
into searchable text. This was an important step: it enabled journalists to
comb through as large a portion of the leak as possible using a simple
search mask similar to Google.
The journalists compiled lists of important politicians, international
criminals, and well-known professional athletes, among others. The
digital processing made it possible to then search the leak for the names
on these lists. The "party donations scandal" list contained 130 names,
and the UN sanctions list more than 600. In just a few minutes, the
powerful search algorithm compared the lists with the 11.5 million
documents.

The research
For each name found, a detailed research process was initiated that
posed the following questions: what is this persons role in the network
of companies? Where does the money come from? Where is it going? Is
this structure legal?
Generally speaking, owning an offshore company is not illegal in itself. In
fact, establishing an offshore company can be seen as a logical step for a
broad range of business transactions. However, a look through the
Panama Papers very quickly reveals that concealing the identities of the
true company owners was the primary aim in the vast majority of cases.
From the outset, the journalists had their work cut out for them. The
providers of offshore companies among them banks, lawyers, and
investment advisors often keep their clients names secret and use
proxies. In turn, the proxies tracks then lead to heads of state, important
officials, and millionaires. Over the course of the international project,
journalists cooperated with one another to investigate thousands of
leads: they examined evidence, studied contracts, and spoke with
experts.
Among others, Mossack Fonsecas clients include criminals and
members of various Mafia groups. The documents also expose bribery
scandals and corrupt heads of state and government. The alleged
offshore companies of twelve current and former heads of state make up
one of the most spectacular parts of the leak, as do the links to other
leaders, and to their families, closest advisors, and friends. The

Panamanian law firm also counts almost 200 other politicians from
around the globe among its clients, including a number of ministers.

The company
The company at the center of all these stories is Mossack Fonseca, a
Panamanian provider of offshore companies with dozens of offices all
over the world. It sells its shell firms in cities such as Zurich, London,
and Hong Kong in some instances at bargain prices. Clients can buy an
anonymous company for as little as USD 1,000. However, at this price it
is just an empty shell. For an extra fee, Mossack Fonseca provides a
sham director and, if desired, conceals the companys true shareholder.
The result is an offshore company whose true purpose and ownership
structure is indecipherable from the outside. Mossack Fonseca has
founded, sold, and managed thousands of companies. The documents
provide a detailed view of how Mossack Fonseca routinely accepts to
engage in business activities that potentially violate sanctions, in
addition to aiding and abetting tax evasion and money laundering.

About Sddeutsche Zeitung

Headquartered in Munich, Sddeutsche Zeitung (SZ) is one of
Germanys leading newspapers. SZ has a total readership of 4.4 million
for its print and online media. Its investigative journalism team counts
five people, three of which are members of the International Consortium
of Investigative Journalists (ICIJ). The Sddeutsche Zeitunghas won a
number of prestigious awards for its research work. Its team has
cooperated with other media organizations on a number of projects,
including Offshore Leaks, Swiss Leaks, and Lux Leaks, which ICIJ
coordinated. At the beginning of 2015, an anonymous source began
sending the Sddeutsche Zeitung data from Mossack Fonseca, a provider
of offshore companies. This marked the beginning of the Panama Papers
project.
http://www.theguardian.com/news/2016/apr/03/panama-papersmoney-hidden-offshore
A network of secret offshore deals and vast loans worth $2bn has laid a trail to
Russias president, Vladimir Putin.

An unprecedented leak of documents shows how this money has made

members of Putins close circle fabulously wealthy.
Though the presidents name does not appear in any of the records, the data
reveals a pattern his friends have earned millions from deals that seemingly
could not have been secured without his patronage.
The documents suggest Putins family has benefited from this money his
friends fortunes appear his to spend.
The files are part of an unprecedented leak of millions of papers from the
database of Mossack Fonseca, the worlds fourth biggest offshore law firm.
They show how the rich and powerful are able to exploit secret offshore tax
regimes in myriad ways.
The offshore trail starts in Panama, darts through Russia, Switzerland and
Cyprus and includes a private ski resort where Putins younger
daughter, Katerina, got married in 2013.
The Panama Papers shine a particular spotlight on Sergei Roldugin, who is
Putins best friend. Roldugin introduced Putin to the woman he subsequently
married, Lyudmila, and is godfather to Putins older daughter, Maria.
A professional musician, he has apparently accumulated a fortune having
been placed in ostensible control of a series of assets worth at least $100m,
possibly more.
Roldugin appears to have been picked for this role because of his lesser
profile. He has denied in documents to bank officials in Switzerland and
Luxembourg that he is close to any Russian public figures. He has also said he
is not a businessman.
Yet the files reveal Putins longstanding intimate has a 12.5% stake in Russias
biggest TV advertising agency, Video International, which has annual
revenues of more than 800m. Previously, its ownership was a closely
guarded secret.

Roldugin was also secretly given an option to buy a minority stake in the
Russian truck manufacturer Kamaz, which makes army vehicles, and has 15%
of a Cyprus-registered company called Raytar.
He also owns 3.2% of Bank Rossiya. The St Petersburg private bank has been
described as Putins crony bank. The US imposed sanctions on it after
Russias 2014 invasion of Ukraine.

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Sergei Roldugin.

These assets are only part of a series of linked financial schemes revealed in
the documents that revolve round Bank Rossiya.
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The bank is headed by Yuri Kovalchuk. The US alleges he is the personal
banker for many senior Russian government officials including Putin. The
Panama Papers disclose that Kovalchuk and Bank Rossiya achieved the
transfer of at least $1bn to a specially created offshore entity called
Sandalwood Continental.
These funds came from a series of enormous unsecured loans from the statecontrolled Russian Commercial Bank (RCB) located in Cyprus and other state
banks. There is no explanation in the files of why the banks agreed to extend
such unorthodox credit lines.
Some of the cash obtained from RCB was also lent back onshore in Russia at
extremely high interest rates, with the resulting profits siphoned off to secret
Swiss accounts.
A $6m yacht was purchased by Sandalwood and shipped to a port near St
Petersburg.

Cash was also handed over directly to the Putin circle, this time in the form of
very cheap loans, made with no security and with interest rates as low as 1%. It
is not clear whether any loans have been repaid.
In 2010 and 2011, Sandalwood made three loans worth $11.3m to an offshore
company called Ozon, which owns the upmarket Igora ski resort in the
Leningrad region. Ozon belongs to Kovalchuk and a Cypriot company. Putin is
the resorts star patron and a reputed resident.
Eighteen months after the loans, the president used Igora as the venue for the
wedding of Katerina. Her groom was Kirill Shamalov, the son of another of
Putins old St Petersburg friends. News of the ceremony, from which cameras
were banished, only emerged in 2015.
The records were obtained from an anonymous source by the German
newspaper Sddeutsche Zeitung and shared by the International Consortium
of Investigative Journalists with the Guardian and the BBC.

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Sergei Roldugin, Vladimir Putin and Dmitry Medvedev, then Russian president, tour the House
of Music in St Petersburg in 2009. Photograph: Dmitry Astakhov/Eyevine

They reveal a number of other manoeuvres by the Putin circle to move cash
offshore. There is nothing inherently illegal in using offshore companies.
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The transactions, however, include apparently fake share deals, with shares
traded retrospectively; multimillion-dollar charges for vague consultancy
services; and repeated payments of large sums in compensation for allegedly
cancelled share deals. In 2011 a Roldugin company buys the rights to a $200m
loan for $1. This is not business, this is creating the appearance of business in
order to continually move and hide assets, Andrew Mitchell QC, a leading
authority on money-laundering, told BBC Panorama.

Such layers of secrecy surrounded the offshore deals that Bank Rossiya staff in
St Petersburg sent all their instructions to a confidential intermediary a firm
of Swiss lawyers in Zurich.
The Swiss lawyers in turn arranged for Mossack Fonseca to set up shell
companies, typically registering them in the secretive British Virgin Islands,
with sham nominee directors from Panama to sign approvals for the deals.
Even Mossacks confidential records of true owners have frequently turned out
to be further fronts.
Speculation over the size of Putins personal fortune has gone on for almost a
decade, following reports in 2007 that he was worth at least $40bn, based on
leaks from inside his own presidential administration.
In 2010, US diplomatic cables suggested Putin held his wealth via proxies. The
president formally owned nothing, they added, but was able to draw on the
wealth of his friends, who now control practically all of Russias oil and gas
production and industrial resources.
Guys, to be honest I am not ready to give comments now
Sergei Roldugin

In 2014, after Russia seized Crimea, the White House imposed sanctions on
leading members of Putins circle, including Kovalchuk, citing their close ties
to a senior official of the Russian Federation a euphemism for Putin
himself. The Panama Papers reveal that the Putin group appeared to have
become nervous for unclear reasons after October 2012. Sandalwood was
closed down and its operations switched to another offshore entity registered
in the BVI, called Ove Financial Corp.
One of the companies linked to Ove Financial Corp belonged to Mikhail Lesin,
Putins media tsar and former press minister. Lesin founded the Kremlins
propaganda TV channel Russia Today but later fell out of favour. He was
mysteriously found dead last November in a Washington hotel room with
blunt force injuries to the head.
Asked about the offshore companies linked to him last week, Rodulgin said:
Guys, to be honest I am not ready to give comments now These are delicate

issues. I was connected to this business a long time ago. Before perestroika. It
happened And then it started growing and such things happened. The
House of Music [in St Petersburg] is subsidised from this money.
Roldugin declined to answer further written questions.

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Roldugin presents a diploma to Sir Paul McCartney, in front of St Petersburgs then governor,
Valentina Matviyenko, in 2003. Photograph: PhotoXPress

The Putin circles use of offshore companies contrasts with the presidents call
for deoffshoreisation, urging Russians to bring cash hidden abroad home.
Others who make use of offshore companies include oil trader Gennady
Timchenko, Putins friend of 30 years. The US imposed sanctions on him in
2014. Others in the data are Arkady and Boris Rotenberg, Putins childhood
friends and former judo partners. They are now billionaire construction
tycoons. The Arsenal FC shareholder Alisher Usmanov also appears. He has at
least six companies registered in the Isle of Man. There is no suggestion this is
illegal.
Dmitry Peskov, Putins official spokesman, declined to comment on specific
allegations against the president. Speaking last week, Peskov said western spy
agencies were behind an all-out information attack against him to
destabilise Russia before elections. Peskov dismissed the investigation by the
Guardian and others as an undisguised, paid-for hack job. He said Russia
had legal means to defend Putins dignity and honour.
RCB Cyprus said it could not disclose information about its clients. It said that
in October 2013 it had refined its strategy. It had opened a branch in
Luxembourg, received a new investor, and was now under direct European
Central Bank supervision. Given this, it was utterly unfounded to suggest the
bank was a pocket for top Russian officials. The bank said it had voluntarily
submitted the allegations to Cypruss money-laundering authority. The

auditor PwC Cyprus said it had audited RCBs accounts but that it did not
provide services to Sandalwood.
Lawyers for Kovalchuk said information about Bank Rossiya was publicly
available. We do not understand why you address these questions to Mr
Kovalchuk.
US political scientist Karen Dawisha said it was inconceivable that Putins
friends had become rich without his patronage. He takes what he wants.
When you are president of Russia, you dont need a written contract. You are
the law.
Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt,
David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick
Hopkins

http://panamapapers.sueddeutsche.de/articles/56fec0cda1bb8d3c3495adfc
/

A storm is coming

By Frederik Obermaier and Bastian Obermayer

The interrogation room in which Icelands recent history was rewritten is
sparse, furnished only with a table, some chairs, and a computer. A
camera is fixed to the wall, and the frosted, double-glazed windows have
completely blocked out the sound of the gale-force winds in Reykjaviks
Faxafloi Bay.
It was in this room that some of Icelands most powerful bankers,
executives, and investors had to answer to special investigator Olaf
Hauksson. A tall man with a heavy build, Haukkson has spent the past
six years investigating the transactions that brought Icelands economy
to its knees in October 2008.
At the time, the countrys three biggest banks folded within just three
days, in part because their senior executives had illegally doctored the

stock listings of their own banks. Market manipulation, as Hauksson

curtly calls it.
When asked what happened to the three bank bosses in the end,
Hauksson grins. They all went to jail, he says, pointing to the empty
chairs. They sat right there.
Olafur Hauksson has only just begun to wrap up proceedings for the
biggest scandal in Icelands history. And its entirely possible that the
publication of the Panama Papers will trigger the next one.

Another storm
The names of several Icelandic public officials show up in the internal
documents of Mossack Fonseca (Mossfon), the Panamanian offshore
provider. Among them are Prime Minister Sigmundur David
Gunnlaugsson, Finance Minister Bjarni Benediktsson, and the Minister
of the Interior, lf Nordal. The data reveals that all three politicians
have links to anonymous offshore companies, which they have neglected
to disclose. The Panama Papers also include the names of Hrlfur
lvisson, the chairman of the prime ministers Progressive Party, several
of Icelands wealthiest men, a number of former top bankers, and at least
one high-level government advisor. The number of suspects is shockingly
high for a country of just 330,000 inhabitants.
Iceland is in for another storm, it seems.
People flying into Reykjavk in early 2016 land in a country still healing
from the last crisis. The fault lines of the financial earthquake that hit the
country in the fall of 2008 ran deep. For several months, Iceland found
itself at the center of the global financial crisis. At the time, three of
Icelands largest banks Landsbanki, Kaupthing, and Glitnir collapsed
almost simultaneously under the weight of their foreign debts.

The bank failure quickly triggered a chain reaction. Icelands stock

market plunged by 90 percent, the Icelandic Krone lost half its value,
and the countrys GNP saw a ten percent decrease. As its economy fell

apart, Icelands reputation was also hit hard, both at home and abroad.
Thousands of protesters descended on parliament and threw stones,
eggs, and snowballs.
The world looked on in bewilderment at the sudden downfall of the
former Scandinavian role model, long the darling of anti-corruption
organizations like Transparency International. The bankers once
celebrated as bold financial vikings in Iceland and elsewhere were to
blame. They had given each other unsecured loans worth hundreds of
millions in an attempt to manipulate the stock prices of their banks. To
cover up the true purpose of these transactions, on paper the loans
mostly went to offshore companies. As the Panama Papers now show,
Mossack Fonseca set up many of them. Without these shell companies,
the fraudulent dealings that inflated the bubble could probably have
been immediately exposed.
In the seven years since the crisis, special prosecutor Olafur Hauksson
has become a celebrity in Iceland. By 2016, 27 executives had been
sentenced to prison, and Icelanders celebrated each conviction with
fervor. Even former Prime Minister Geir Haarde didnt get off scot-free:
Icelands parliament voted to charge him with gross negligence.
However, the result of ended up being more like a token gesture. It was
ascertained only that Haarde had failed to sufficiently inform his cabinet
of important developments during the crisis.
This backstory is important when considering the offshore companies of
current Icelandic politicians. Icelands population is still angry about the
crisis and its aftermath. For this reason, Prime Minister Sigmundur
Gunnlaugsson has a lot of explaining to do.
According to the Panama Papers, Gunnlaugsson and his partner Anna
Sigurlaug Plsdttir, who he married in 2010, were registered at the end
of November 2007 as the
shareholders of a shell company called Wintris Inc. Shortly before this,
the
company had been founded in the British Virgin Islands. But for reasons
that remain unclear, the registration was backdated to October 7.

At the time, Gunnlaugsson was working as a journalist and radio host,

and Plsdttir was (and still is) an anthropologist. Both of them come
from very wealthy families.
Mossfon documents reveal that the Luxemburg branch of Landsbanki
acted as an
intermediary. One of the banks employees put in the order for Wintris
Inc. with the Mossfon office in Luxemburg and requested full power of
attorney for
Gunnlaugsson and Plsdttir. In an email, the banker wrote:
Sender: Landsbanki Luxemburg; Recipient: Mossfon Luxemburg
Dear J.,
Please issue a POA to:
- Anna Sigurlaug Palsdottir
- Sigmundur David Gunnlaugsson
I will send you the addresses later today
They will own the company 50%-50%
SH cert nr. 1 with 1000 shares SH cert nr. 2 with 1000 shares
Thank you. Kind regards
Wintris was then issued two shares. One for Anna Sigurlaug
Palsdottir. And one for Sigmundur David Gunnlaugsson.

In March 2008, Wintris Inc. opened an account at Crdit Suisse in

London. As the data shows, the companys affairs were based in four tax
havens, with the offshore company in the British Virgin Islands, the law
firm in Panama, an intermediary in Luxemburg, and the account at a
Swiss bank. These are the key points revealed in the Panama Papers.

However, in this case, the pivotal information is buried in a different

leak: in March 2010, Wikileaks published a previously confidential list
that comprised almost 30,000 claims made against the insolvent
Kaupthing-Bank. In part, the list was made public to expose greedy
speculators. One of the creditors on the list: Wintris Inc. The offshore
company was also listed as a creditor of Landsbanki on a list published in
2009. According to an insider, Wintris also held bonds at Glitnir, the

third insolvent bank. The total current value of these bonds amounts to
about EUR 3.6 million.
In response to a request for comment, Gunnlaugsson confirmed that
Wintris owned bonds. He and his partner thus may have had personal
financial interests at all three of the banks. While this would have been
insignificant in 2007, Gunnlaugsson went into politics shortly after. In
2009, he was appointed chairman of the Progressive Party and elected to
parliament in April of the same year. At the time, a new transparency
regulation for Icelands members of parliament entered into force. As a
parliamentary spokesperson confirmed to SZ, it obliged MPs to disclose
any company shareholdings exceeding 25 percent.
Sigmundur Gunnlaugsson never reported his involvement with Wintris
Inc., even though he ostensibly held 50 percent of its shares at the time.
Was this a breach of the Icelandic parliaments regulation?
Gunnlaugsson denied any wrongdoing in his response to SZs request for
comment. He argued that companies that dont really do any business
are not subject to the regulation.
On December 31, 2009, Gunnlaugsson sold his half of Wintris to his
partner Anna Plsdttir. According to the contract found in the Panama
Papers, the company worth millions was sold for one US Dollar.

CREDIT: PANAMA PAPERS

An affair involving an offshore company would be unpleasant for any
head of government. But in Gunnlaugssons case it is a severe blow to his
political integrity.
His rise to power began as part of InDefence, short for In Defence of
Iceland, a grassroots political movement that was born after the three
Icelandic banks collapsed. One of its slogans was Icelanders are NOT
terrorists, which was a response to the British governments
controversial reaction to the Icelandic banking crisis. After the insolvent
Landsbanki was nationalized in the fall of 2008, Great Britain demanded
that Iceland guarantee the savings deposits of British nationals. When
the Icelandic central bank refused to comply, the British government
tried to get the money back by freezing Icelandic assets on the spot. To
do this, Great Britain used counter-terrorism laws. In the blink of an eye,
Scandinavias fallen star suddenly found itself in the same category as AlQaida.
Elected in 2009, Icelands center-left government attempted a
compromise that would have included providing guarantees for British
savings accounts. This enraged InDefence, and the movements
supporters successfully rejected the governments plans in three
consecutive referendums on the matter. At the time, Gunnlaugsson
seemed like a strong representative of the Icelandic peoples interests.

A conflict of interest
Insiders have said that Gunnlaugsson didnt mention to his fellow
InDefence campaigners that his family held bonds worth millions at the
three bankrupt banks. The prime minister insists that the InDefence
policy he helped fight for at the time even reduced the value of Wintris
assets because he argued in favor of prioritizing savings over bonds.
Gunnlaugsson yet again failed to disclose his personal business interests
when he was elected prime minister in 2013, even though he would
inevitably be involved in making decisions that also affected the interests
of creditors.

Just last year, Gunnlaugssons government agreed to a controversial

deal. Until then, creditors who pulled their money out of Iceland were
charged a 39 percent stability tax. Gunnlaugsson agreed to replace this
with a stability contribution from the remaining assets of the
nationalized banks. According to experts, this move will reduce the
amount of money going to the state by more than two billion euros.
Instead, these two billion will go to creditors, among them Wintris Inc.,
the company now owned exclusively by Gunnlaugssons wife. To some
extent, Gunnlaugsson was on both sides of the negotiating table a clear
conflict of interest.
In March 2016, an Icelandic and a Swedish TV journalist, who
cooperated
with SZ in researching this article, confronted the prime minister about
the shell
company in an interview:

A few days later, his wife posted a statement on Facebook claiming that
she was sole owner of Wintris, and that she had filed taxes for the
company from the very beginning. She also maintained that the bank
had mistakenly named Gunnlaugsson as a shareholder. While planning
their 2010 wedding at the end of 2009, they had noticed and corrected
the error.
To clarify the matter, SZ contacted the Landsbanki employee who had
forwarded both names to Mossack Fonseca in 2007. He said it was
highly unlikely that the bank had inadvertently entered a wrong name
for the company owner and power of attorney holder.

The Gunnlaugson case has become a political issue

Gunnlaugsson responded to a request for comment by explaining that he
already had a joint account with his future wife at the time, and this was
why share certificates had been issued to both of them. However,
according to Gunnlaugsson, it was clear that the company belonged to
his wife. Icelandic banks frequently offered their customers such offshore
constructs at the time. Since his wife paid taxes on the couples assets, he

argued that Wintris could not be considered to be located in a tax

haven and could thus not be seen as an offshore company.
When Icelandic media picked up on Anna Sigurlaug Plsdttirs
Facebook post, the Gunnlaugsson Affair became a political issue even
before the Panama Papers exposed its true scale. The opposition has
called for the prime ministers resignation and new elections. One
newspaper has argued that the affair is one of the biggest breaches of
confidence in Icelands parliamentary history.
Gunnlaugsson was absent at the last parliamentary session before the
Easter break. Bjarni Benediktsson, Icelands finance minister and
chairman of Gunnlaugssons coalition partner, declared to the MPs that
he knew nothing about the prime ministers company.
What
Benediktsson, whose family is one of Icelands wealthiest, did not
mention: the
SZ had also sent him a request for comment about his own offshore
company.In
response to this request, he later confirmed that he held a 33 percent
share of
Falson & Co., a shell company founded in 2005 in the Seychelles.

According
to documents that Benediktsson provided SZ, the company was still
active as
recently as 2009, and was established in order to purchase real estate in
Dubai. Benediktsson was already a member of parliament in 2009, and
was thus
required by the rules of Parliament to disclose his shareholding.
In a 2015 television interview, Benediktsson stated: I have never held
assets in a tax haven or anything like that. Upon request, Benediktsson
has now claimed he wasnt aware that the company was registered in
the Seychelles, but that the company had been registered for tax
purposes.

The Panama Papers also reveal that Icelands minister of the interior
lf Nordal and her husband had power of attorney for Dooley Securities
S.A., an offshore company located in Panama. She explained that the
company was founded for her husband but was never used, and this was
why she never disclosed the companys existence.
Hrlfur lvisson, the managing director of Gunnlaugssons Progressive
Party, says the offshore companies the Panama Papers link him to have
long been inactive, and that everything is legal.

The agenda has been set

The story of the Icelandic affair has one more twist: in the summer of
2015, Icelands tax authorities acquired internal Mossfon data from a
whistleblower. The documents included information on about 250
companies, including Wintris Inc., Falson & Co, and Dooley Securities
S.A. At the time, the offer to purchase this data was the subject of public
debate in Iceland. Finance Minister Benediktsson argued that giving an
anonymous person a suitcase full of money was completely
unthinkable. In turn, Prime Minister Gunnlaugsson stated that it was
unclear whether the offshore data was realistic and useful.
Benediktsson and Gunnlaugsson now declare that they have always been
in favor of purchasing the data.
The Icelandic parliaments Easter break will end this Monday. The
agenda for the first parliamentary session has likely already been set.
Collaborators: Jhannes Kr. Kristjnsson, Ryan Chittum

http://www.theguardian.com/news/2016/apr/03/iceland-pm-callssnap-election-offshore-revelations
Icelands prime minister is this week expected to face calls in parliament for a
snap election after the Panama Papers revealed he is among several leading
politicians around the world with links to secretive companies in offshore tax
havens.

The financial affairs of Sigmundur Dav Gunnlaugsson and his wife have
come under scrutiny because of details revealed in documents from a
Panamanian law firm that helps clients protect their wealth in secretive
offshore tax regimes. The files from Mossack Fonseca form the biggest ever
data leak to journalists.
Opposition leaders have this weekend been discussing a motion calling for a
general election in effect a confidence vote in the prime minister.
On Monday, Gunnlaugsson is expected to face allegations from opponents that
he has hidden a major financial conflict of interest from voters ever since he
was elected an MP seven years ago.
The former prime minister Jhanna Sigurardttir said Gunnlaugsson would
have to resign if he could not regain public trust quickly, calling on him to
give a straightforward account of all the facts of the matter.
The former finance minister Steingrmur Sigfsson told the Guardian: We
cant permit this. Iceland would simply look like a banana republic. No one is
saying he used his position as prime minister to help this offshore company,
but the fact is you shouldnt leave yourself open to a conflict of interest. And
nor should you keep it secret.
Leaked papers show Gunnlaugsson co-owned a company called Wintris Inc,
set up in 2007 on the Caribbean island of Tortola in the British Virgin Islands,
to hold investments with his wealthy partner, later wife, Anna Sigurlaug
Plsdttir.

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The Caribbean island of Tortola, where Wintris was set up. Photograph: Christian
Wheatley/Getty Images

The couple were living in the UK at the time and had been advised to set up a
company in the tax haven in order to hold and invest substantial proceeds
from the sale of Plsdttirs share in her familys business back in Iceland.

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Gunnlaugsson owned a 50% stake in Wintris for more than two years, then
transferred it to Plsdttir, who held the other 50%, for one dollar. The prime
ministers office now says his shareholding was an error and it had always
been clear to both of them that the prime ministers wife owned the assets.
Once drawn to the couples attention in late 2009, the error was corrected.
Towards the end of Gunnlaugssons time as a Wintris shareholder, having
returned to Iceland, he was elected to parliament as leader of the Progressive
party.
Gunnlaugsson, who became prime minister four years later, never disclosed
his Wintris shares on Icelands parliamentary register of MPs financial
interests.
Nor has he spoken about the offshore company publicly until questioned by
the Guardian and other media working in conjunction with the International
Consortium of Investigative Journalists.
When first asked if he had ever owned an offshore company, Gunnlaugsson
said: Myself? No. Well, the Icelandic companies I have worked with had
connections with offshore companies but I can confirm I have never hidden
any of my assets.
Asked what he knew about Wintris, he initially said: Well, its a company, if I
recall correctly, which is associated with one of the companies that I was on
the board of. Shortly afterwards, Gunnlaugsson ended the interview.

Public statements
The prime minister and his wife then rushed out separate public statements in
Icelandic condemning reporters intrusions into their private business
matters.
Both stressed their financial interests had always been properly disclosed to
the Icelandic tax authorities. The Guardian has seen no evidence to suggest tax

avoidance, evasion or any dishonest financial gain on the part of

Gunnlaugsson, Plsdttir or Wintris.
The prime minister now accepts he did jointly own Wintris with his wife.
Copies of the share certificate in his name and of Wintriss share register are
published today by the Guardian.
He nevertheless insists he did not have to declare his shares on the
parliamentary register because Wintris was a holding company, not a
commercial company.
He was elected to parliament in April 2009 and did not transfer his Wintris
shares to Plsdttir until the last day of that year. A copy of the transfer
agreement is published here.
Asked if he had nevertheless breached the spirit of the disclosure rules, the
prime minister declined to reply. He conceded there might be a case for
tightening the rulebook.
Leaked Wintris documents show in detail the layers of complexity associated
with such BVI companies, masking the identity of those in charge.
They also raise uncomfortable questions about how Gunnlaugsson could have
remained unaware for more than two years that he was the owner of 50%
of Wintris and its considerable investments.
The instruction to set up Wintris first came through agents in Luxembourg,
who contacted Mossack Fonseca, an international law firm specialising in
offshore secrecy. A registered office was set up in the BVI and three nominee
directors recruited from Panama.

Power of attorney
Names of the Panamanian directors appear on almost all of the companys
official paperwork for the first three years, but it was Gunnlaugsson and
Plsdttir who held the authority to control the firm, having privately been
granted power of attorney over Wintriss affairs.

Five months after it was set up, the company also made arrangements to open
a bank account at a London branch of Credit Suisse. By then, the involvement
of Gunnlaugsson and Plsdttir in the activities of Wintris was well hidden
from the public gaze.

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A woman leaves a branch of Icelands second largest bank, Landsbanki, in October 2008, a day
after the state officially announced it had nationalised it. Photograph: Olivier Morin/AFP/Getty
Images

Later that year, Iceland became one of the most severe casualties of the global
credit crisis. Financial meltdown meant the country was forced to seek bailout
loans and impose currency controls as foreign investors rushed to sell out of
the rapidly devaluing Icelandic krna.
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While Wintris was shielded from some of this turmoil, it had invested in bonds
issued by three Icelandic banks and was owed more than 500m Icelandic
krna (2.8m) when they all collapsed. Only a small fraction of that sum is
likely to be recovered.
Revelations from the Panama Papersabout Gunnlaugsson and Plsdttirs
offshore activities are awkward for Icelands prime minister, who has made a
name for himself defending the collapse of his countrys financial system
against the demands of foreign creditors, whom he has repeatedly
characterised as vultures.
He has dismissed suggestions that his wifes ownership of Wintris
compromised him as prime minister. On the contrary, he suggested, his
consistently tough approach to foreign creditors, including Wintris,
demonstrated that his wifes financial interests had never affected his
decision-making.

Icelanders suspicions

For some years many ordinary Icelanders have grown suspicious about
wealthy Icelanders and their use of offshore companies, concerned such
arrangements are designed to avoid tax.
To pursue investigations in this area, Icelands tax office last year paid a
whistleblower for a cache of data from Mossack Fonsecas regional office in
Luxembourg. As a result, tax inspectors are said to have in their hands the
private details of up to 400 Icelanders with interests in tax havens.
There is no suggestion of tax avoidance in the case of Wintris, but the prime
minister said he and his wife had always assumed the whistleblower data
could include information on Wintris. He said he supported the tax offices
ongoing inquiries.

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Icelands finance minister, Bjarni Benediktsson. Photograph: Bloomberg/Bloomberg via Getty
Images

A rebellion against the prime minister in parliament on Monday may depend

in part on the position taken by his partners in coalition government, led by
the finance minister, Bjarni Benediktsson.
But Benediktssons name also appears in the Panama Papers as he previously
owned a third of a company called Falson & Co, incorporated in the
Seychelles. Benediktssons interest in Falson was held through bearer share
certificates, which do not record the name of the owner.
He told the Guardian the company had been set up with two co-investors to
buy a property in Dubai, but the deal had fallen through in 2009 and he had
had no dealings with the company since.
In a television interview last year, Benediktsson was asked if he had ever done
business in tax havens. No, I havent done that, he said. I have not had any
assets in tax havens not done anything like that.

Asked why he had not mentioned Falson, Benediktsson said he had not
realised it was based in the Seychelles. He had thought it was in Luxembourg.
Panama Papers reporting team: Juliette Garside, Luke Harding, Holly
Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick
Hopkins

http://www.mirror.co.uk/news/uk-news/david-camerons-dad-toptories-7684150
A sensational leak of 11 million confidential documents last night showed how
the worlds richest people protect their wealth.
The records, said to be from
secretive Panama law firm Mossack
Fonseca, apparently show world
leaders, sports stars and celebrities
use offshore companies.
Among those mentioned in the
Panama Papers were David
Cameron s late father Ian and
several Tory peers and former MPs.
REUTERS/Toby Melville

Prime Minister David Cameron embraces

his father Ian

Footballer Lionel Messi and his dad,

the Prime Ministers of Iceland and
Azerbaijan, the King of Saudi Arabia and President of Azerbaijan are named.
Meanwhile, Vladimir Putin is also linked. Although the Russian President is not
named, files reveal money from Russian bank Rossiya already on the EU
sanctions list was channelled through offshore firms owned by associates
allegedly including concert cellist Sergei Roldugin.

Getty

Mossack Fonseca is based in

the heart of Panama's financial
district

Mr Camerons father, who

to

died in 2010, is reported

have used Mossack
Fonseca to shield his
investment fund, Blairmore Holdings Inc,
from UK taxes.

Papers say his fund was managed and conducted so it does not become
resident in the United Kingdom for UK taxation purposes.
While tax evasion is illegal in the UK, tax avoidance or minimisation is usually
legal. Three Tory peers are mentioned in the documents as having used tax
havens. They are ex-minister Michael Mates, former party donor Lord
Ashcroft and Pamela Sharples.
Sergei Roldugin

Lord Mates said his shares in a

Caribbean real estate firm were
not of any value.Lord
Ashcroft s spokesman insisted
the allegations were entirely
false.
Lady Sharples has shares in
Bahamas-based Nunswell
Investments Limited. Her
lawyers said she became a director in 2000, the firm was registered in the UK
that year and now pays taxes here.
Getty Images

Russian President Vladimir Putin

The names of the Tory MPs have not been revealed. No10 said it would not be commenting but the PM previously said tax avoidance is morally wrong.

Read more: Labour and union leaders voice their shock as Tata prepares to sell UK
steel operation
More than half of the
300,000 firms said to have
used Mossack Fonseca
are registered in Britishadministered tax havens,
which Mr Cameron has
vowed to crack down on.
https://twitter.com/mossfon

Around 11.5m Mossack

Fonseca documents are
reported to have been leaked

Read more: Taxman gets

green light to chase 30m in unpaid levies on bankers' bonuses
Shadow Chancellor John McDonnell said: The Panama papers revelations are
extremely serious. Cameron promised and has failed to end tax secrecy and
crack down on morally unacceptable offshore schemes, real action is now
needed.
The documents, dating over 40 years,
were leaked to more than 100
international news organisations including
the BBC and the Guardian.
Mossack Fonseca rejected any
accusations of wrongdoing and said it had
operated beyond reproach for 40 years.
The firm appeared to accept the files came from unauthorised access to its
systems.

https://www.yahoo.com/news/panama-vows-cooperate-legal-fallout-panamapapers-leak-233049587.html

Panama City (AFP) - Panama's government vowed Sunday to "vigorously

cooperate" with any legal probe that might be launched in the wake of the
"Panama Papers" data leak.
"The Panamanian government will vigorously cooperate with any request or
assistance necessary in the event of any legal action occurring," it said in a
statement.
The Central American nation is reeling from revelations that one of its highprofile but secretive law firms, Mossack Fonseca, allegedly helped major
politicians and celebrities around the world hide assets from tax authorities,
according to a data leak picked over by scores of media outlets.