Reporting by Cecile S. Gallego
The International Consortium of Investigative Journalists (ICIJ) is today releasing information from four secrecy jurisdictions’ corporate registries that were included in the Paradise Papers investigation: Barbados, the Bahamas, Aruba and Nevis. There are now a total of 55 jurisdictions searchable on the the Offshore Leaks database.
In total more than 160,000 entities and close to the same number of shareholders and directors of those companies were added to the Offshore Leaks database, which already includes data from the Offshore Leaks, Panama Papers and Bahamas Leaks projects as well as the portion of the Paradise Papers data connected to the offshore law firm Appleby.
With this release, the Offshore Leaks database now has information on more than 680,000 entities like companies, foundations and trusts.
These four jurisdictions were previously highlighted by the Organization for Economic Co-operation and Development (OECD) as being “uncooperative tax havens.” However, the OECD removed them from the list after they committed to implementing the OECD’s standards of transparency and exchange of information.
Despite that, Barbados was included on the European Union’s recent blacklist of tax havens while Aruba was part of the “grey list” that agreed to amend or abolish its “harmful tax regime” by 2018.
EU Member states did not include Bahamas or the federation of Saint Kitts and Nevis, noting when the list was released that they “were severely struck by devastating storms in September 2017, causing casualties and major damage to key infrastructure.”
Each of these jurisdictions, except Nevis, has an online registry with limited information available via a company name search. However, none allow searches by officer names, which is critical to finding information about directors and beneficial owners of those entities.
Often it is these searches that allow ICIJ, and its media partners, to report on stories such as those in the Paradise Papers.
The Barbados registry is available online but offers only restricted information and doesn’t guarantee its accuracy.
“The database is updated only periodically by a private contractor and accordingly, search results will not give a real-time reflection of all the entries,” its website notes.
“In these circumstances, the office does not and cannot guarantee the accuracy or integrity of any of the search results which are obtained from this site.”
The more than 40,000 Barbados entities added to the Offshore Leaks database can be searched by company names and are connected to more than 120,000 officers. Many of these listed officers may be nominee directors. For example, Trevor A. Carmichael – a top lawyer on the island and often a nominee director – is is connected in the data to more than more than 1,000 companies.
In tax havens, nominee directors are third parties registered as an administrator of a company instead of its real beneficial owner or manager, who remain anonymous.
The availability of information about owners and directors in the Paradise Papers data was key to discovering that the president of Colombia, Juan Manuel Santos, was a director of two Barbados companies linked to an education finance company, one of which was called Global Tuition & Education Insurance Corp. As a response, Santos published his 2015 and 2016 income statements the following day.
This Dutch island off the coast of Venezuela is listed on Oxfam’s recent of tax havens for its lack of commitment to adopt a package of international measures designed to curb tax avoidance by multinational companies.
The Offshore Leaks Database includes the same information available on Aruba’s corporate registry on close to 50,000 entities. However, the Offshore Leaks Database enables users to search by officer names, which is not permitted by the registry.
The vast majority of officers are Dutch (21,500), but the data also include a number of Venezuelans (2,100), Americans (1,100) and Colombians (850).
ICIJ partners in Belgium used the registry data to reveal that movie star Jean-Claude Van Damme was connected, through family members, to three companies in Aruba: Selima Corporation (registered in 1993), Selima Films (1994) and Knock Films (1997). Van Damme’s lawyers commented that “it [was] not illegal to incorporate companies in other jurisdictions.”
The Nevis corporate registry has never been exposed until the Paradise Papers.
The jurisdiction, one of the two islands in the federation Saint Kitts and Nevis, doesn’t make any information available online. The two islands organize their financial structures independently, and the information ICIJ is releasing is only from Nevis.“With most of the offshore financial activity concentrated in Nevis, it has independently developed its own offshore legislation”, according to the U.S. State Department.
The website of the Nevis Financial Services Regulatory Commission offers information on how to register different types of entities but stays silent on how to find information on them.
ICIJ is adding more than 70,000 entities from this registry to its public database. Half of these companies were incorporated by a single registered agent, Nevis-based Morning Stars Holding.
One of the island’s strongest selling points is its asset-protection law. Creditors are required to post a $100,000 bond before filing a claim against a Nevis trustee. The claim itself must be filed in a local court and is valid only if fraud is alleged.
Documents from offshore law firm Asiaciti Trust, also part of the Paradise Papers leak, reveal new details on the fortune of Kurt Donsbach, an unlicensed doctor from California. Donsbach was arrested in 2009 on charges ranging from grand theft to falsely representing a product as a cure for cancer. Some of his assets were held in a trust in Nevis, which was reconfigured in 2011 after Donsbach was sentenced to a year in jail and ordered not have any health-related business.
In September 2016, ICIJ published data from the Bahamas corporate registry as part of the Bahamas Leaks.
Using information from a cache of 1.3 million files from the island nation’s corporate registry, ICIJ was able to show that, between 2000 and 2009, former EU commissioner for competition policy Neelie Kroes was listed as the director of Mint Holdings Ltd., a Bahamas company that entered ultimately unsuccessful negotiations for a $6 billion deal with energy giant Enron. Kroes’ lawyer said the company was never operational and blamed her appearance in the records as “a clerical oversight which was not corrected until 2009.”
Following the revelations, the OECD’s head of tax, Pascal Saint-Amans warned the Bahamas could soon be put back on the OECD’s blacklist. As a result, the minister in charge of the island nation’s offshore industry promised to introduce automatic exchange of tax information with other countries one year ahead of schedule.
Yet, Oxfam included the Bahamas on its blacklist published last November, because the island did not commit to a set of rules agreed upon internationally to fight tax avoidance, has a 0 percent corporate tax rate and hasn’t signed agreements on automatic exchange of information.
ICIJ is updating today its existing data with information related to more than 500 new Bahamian entities.
Based on this additional information, ICIJ partners uncovered the offshore connections of former Pakistan’s prime minister (2004-2007) Shaukat Aziz.
Aziz, who worked for Citibank before starting his career as a politician, was one of the shareholders and directors of Bahamas-registered Cititrust Limited from 1997 to 1999, along with other executives of the bank.
While ICIJ is publishing data extracted from the documents it received from the Paradise Papers leaks, it may not reflect the full data available on those corporate registries.
ICIJ is not publishing the entire leak and is not disclosing raw documents or personal information en masse.
In addition to updating its public database of offshore companies, two weeks ago ICIJ released a version of Neo4j Desktop with the Paradise Papers and the other Offshore Leaks graph data. This ready-to-use software includes tutorials and guides on how to download and search the entire Offshore Leaks data using, for example, Neo4j’s cypher query language.
ICIJ will be adding more information from other offshore registries connected with the Paradise Papers in 2018.