May 30, 2016
In recent days, Sri Lanka, Zimbabwe and South Africa joined the growing list of countries hunting down tax evaders among citizens who own offshore accounts. The French bank BNP Paribas said it would shut its Cayman Islands branch. In Pakistan, a cricketer-turned-politician who had attacked the prime minister over his family’s offshore accounts admitted that he, too, had used a shell company. And the Group of 7 nations, meeting in Japan, agreed to crack down on illicit finance.
“The reaction around the world has been pretty spectacular,” said Gabriel Zucman, an economist at the University of California, Berkeley who has estimated that 8 percent of the world’s personal wealth is hidden in tax havens. “The demand for financial transparency and tax reform is really growing. It’s the first time there’s been public outrage at the global level on these issues.”
David Marchant, editor of OffshoreAlert, a news site that covers offshore finance, called the Panama Papers “an extraordinary event” that dwarfs past exposes of the industry. A session on the leak at the annual OffshoreAlert conference in Miami this month grew heated, he said, as champions of transparency debated industry players who said privacy had been trampled.
Marchant said he believed the reform push from the leak will fade. “The people using the offshore system to evade their financial responsibilities tend to be very wealthy and influential people,” he said. He predicted that any changes in laws and regulations following the disclosures would be “mostly window dressing.”