Dubbed the “biggest leak in history”, the Panama Papers recently released by the International Consortium of Investigative Journalists have taken the international community by storm.
[Editor's note: Heads are already rolling, as the prime minister of Iceland, who is named in the papers, has already stepped down, the first casualty of the leak.]
However, even though the repercussions of the exposure of those 11.5 million copies of confidential documents that implicate dozens of world leaders and celebrities are continuing to unfold, the Panama Papers are likely to be just another passing fancy for the western media and won’t change anything at all.
On one hand, corruption allegations against world leaders, especially those of developing countries, have become a dime a dozen nowadays. They have already become part of the new normal and no longer have much novelty.
For example, President Dilma Rousseff of Brazil and her predecessor Lula have simultaneously been engulfed by corruption scandals in recent months.
Besides, the big names revealed in the Panama Papers so far are either state leaders that have little international influence, such as Iceland’s prime minister, Sigmundur Davíð Gunnlaugsson, or associates of powerful autocrats like President Vladimir Putin of Russia, who are unlikely to face any political pressure or criminal charges no matter how much wealth they have hidden in those offshore companies set up in tax havens.
Even if the Panama Papers take their toll on tax havens around the globe, as the leak might prompt international law enforcement agencies to step up their efforts to crack down on cross-border tax evasion and money laundering, it is almost certain that it will be business as usual again for these tax havens in a few months’ time.
That is because the US government and its allies have every reason to make sure that these tax havens can continue to function normally, because they themselves are among some of their biggest clients, using offshore shell companies or bank accounts established in these tax havens to fund their highly secretive intelligence operations in the name of fighting terrorism or preserving national security.
This article appeared in the Hong Kong Economic Journal on April 7.
Translation by Alan Lee
[Chinese version 中文版]
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