Establishing Exchange of Information Channels for Tax and Criminal Investigative Agencies
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authorities to coordinate the management and security of those databases. That communication may improve understanding of the type of information relevant to each authority and encourage authorities to share information for the sake of efficiency. Over the years, LEAs and tax authorities have created shared databases and collaborated—about leaked data or whistleblower information—in some cases provided by international alliances and civil society organizations (CSOs). Since 2013, the International Consortium of Investigative Journalists (ICIJ) has published information leaked from over 785,000 entities through the Paradise Papers, Bahamas Leaks, Luxembourg Leaks, Panama Papers, and Mauritius Leaks, among others (see box 2.7 for examples of ICIJ investigations and publications used by criminal and tax investigators). In many countries,
BOX 2.7
International Consortium of Investigative Journalists: Following the Leaks
Luxembourg Leaks. A financial scandal revealed in November 2014, Lux Leaks was based on confidential information about tax rulings in Luxembourg overseen by PricewaterhouseCoopers from 2002 to 2010 to benefit its clients. The investigation eventually made public tax rulings for over 300 multinational companies based in Luxembourg. The Lux Leaks disclosures attracted international attention and debate about tax avoidance schemes in Luxembourg and elsewhere. This scandal contributed to the implementation of measures aimed at reducing tax dumping and regulating tax avoidance schemes benefiting multinational companies. Panama Papers. The Panama Papers, published in April 2016, were an unprecedented leak of 11.5 million files from the database of the world’s fourth-largest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC. The documents contain previously private personal financial information about wealthy individuals and public officials. Although offshore business entities are legal, reporters found that some of the Mossack Fonseca shell corporations were used for criminal purposes, including fraud, tax evasion, and evading international sanctions. Malta Leaks. In May 2017, a data leak revealed information about 70,000 offshore companies in Malta. Reportedly, multiple German companies and up to 2,000 German taxpayers were registered in Malta, and the data revealed how corporations and private persons on the Mediterranean island used these companies to bypass taxes in Germany. Paradise Papers. In the fall of 2017, a data leak revealed over 13 million documents about the offshore financial affairs of hundreds of politicians, multinationals, celebrities, and highnet-worth individuals. Significant information shed light on the sophisticated mechanisms used by legal firms, financial institutions, and accountants specializing in jurisdictions that adopt offshore tax rules to attract money. (continued next page)
