The effect of the Panama Papers

The effect of the Panama Papers

The Panama Papers are 11.5 million documents that were leaked in the beginning of April this year. The documents were created by the Panamanian law firm Mossack Fonseca. These documents illustrate how wealthy and important individuals keep their financial information private. This topic does not receive any media attention anymore, which is why in this article I will discuss what the short and long-term effects of the leak are. First, we are going to look at a video, that simply illustrates what the Panama Papers exactly are:

Effects

Now that you know what the Panama Papers exactly are, we are going to look at the short-term effects of the leak. Various public figures were exposed in the documents of Mossack Fonseca. The first to resign, only days after the documents were made public, was the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson. The leaking of the documents mounted public outrage in Iceland, where people went to the streets of Reykjavik to protest.

The president of Russia, Vladimir Putin, was also linked to the papers. Though his name has not been mentioned in the papers, his friends and family are. The money his friends and family earned could not have been earned without his patronage, specialists say. Even though Putin is linked to the documents, there has been no public outrage, as was seen in Iceland.

The most ironic revelation from the papers has to do with Juan Pedro Damiani. The Uruguayan lawyer was a member of the FIFA’s ethics committee. After it was revealed he had links to the leaked documents, he resigned from his position immediately.

The long term effects have been prevalent. Now, at least 150 inquiries, audits or investigations have been announced by authorities in 79 countries around the world. Governments have regained tens of millions of dollars of taxes they previously could not receive. In the US, treasury and justice departments have proposed a series of new laws and regulations that would make it easier to track ‘dirty money’ in- and outside the US. Not only money laundering has been revealed in the documents. Terrorism, drug and human trafficking and cyber crime have also been discussed in the documents. For example, Europol has found 116 matches in their database on Islamic terrorism.

The Panama Papers have certainly made governments think more about transparency, as countries do not want to be the next Panama. Panama is currently paying a PR company 50,000 dollars a month to promote its commercial and diplomatic objectives. This is a direct result of the Panama Papers. The financial world has also been affected by the Panama Papers. Academics found that 135 billion dollars of the value of 400 publicly traded companies was erased, as a result of the leaks.

Even after the initial public outrage, the amount that has been done against offshore tax havens remains relatively small. While some countries have proposed reforms, most countries have not changed their way of dealing with things. Seven out of ten countries where a public official has been named in the leak, have been silent about the issue.

Conclusion

The Panama Papers have certainly opened the world’s eyes to offshore tax havens. I think the public has a better understanding of what offshore tax havens are. There are some effects on the world. As stated, almost 135 billion dollars of value of public companies has been diminished. Public officials have resigned, and a lot of inquiries have opened. But the overall effect of the Panama Papers has been little. Most countries have not implemented policy to prevent tax havens, or are thinking about it. And two months after the leak the media attention was already non-existent. Maybe this is the way how news spread. But if we look at what public outrage it caused, and how much is reported about it now, that is quite strange.

Do you think the world has changed for the better after the Panama Papers? Let me know!

http://grapevine.is/news/2016/04/05/prime-minister-resigns/

https://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers

https://panamapapers.icij.org/20161201-global-impact.html

https://www.theguardian.com/news/2016/apr/03/panama-papers-money-hidden-offshore

https://www.theguardian.com/football/2016/apr/06/fifa-ethics-committee-member-juan-pedro-damiani-resigns-panama-papers



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