With the publication of Pandora Papers, the leak of 11, 9 million of confidential documents on the fortunes of some of the most powerful and influential people in the world, the media focus falls once again on offshore companies.
The global investigation, led by the International Journalism Consortium of Investigation (ICIJ), includes more than 330 politicians of 90 countries that use these offshore companies to hide their wealth, evade taxes and, in some cases, money laundering.
Latin America is not exempt from scandal. Sebastián Piñera, Guillermo Lasso and Luis Abinader , presidents of Chile, Ecuador and the Dominican Republic, appear on the list.
Others are also listed 11 former presidents of the region, such as the Colombians César Gaviria and Andrés Pastrana and the Peruvian Pedro Pablo Kuczynski.
The way these companies work in tax havens is very complex since it reveals a whole international network of companies that help move the din ero.
But one of the fundamental points to keep in mind is that offshore companies themselves are not illegal.
“That does not mean that they are not questionable,” explains Dan Hough, Head of the Department of Politics at the University of Sussex, England, and author of “Analyzing corruption” ( “Analyzing corruption” ).
“In fact, they are completely legal. And that is precisely why they are so questionable “, emphasizes the specialist.
For Hough, the network of companies offshore is the most obvious form of “legal corruption” today.
These are mechanisms that the powerful use to commit acts that before the courts and governments They are not entirely illegal, “but they are not correct either.”
There are other similar definitions, such as “transparent corruption”, which, like “legal corruption”, is made up of two concepts that are simply view are not related to each other.
But together they show “the different ways” that the powerful have to evade their fiscal responsibilities.
“Politicians are not that stupid. They find a way to evade taxes and hide money without making it entirely illegal, ”explains Hough.
According to the ICIJ, the money that is hidden in the offshore can range from US $ 5.6 to US $ 32 trillion . However, due to its complex framework, it is impossible to know with certainty the real figure.
The International Monetary Fund has said that the use of tax havens les costs governments around the world up to US $ 600. 000 millions in lost taxes each year.
Defining corruption is not an easy task since each country understands and defines it separately.
So what it is Corruption in the United States may not be in Venezuela, Argentina or Russia.
But wherever it is, corruption has some points in common : it is a deliberate act (it is not accidental) and represents abuse of power and of which in addition you get a profit which can either be direct (in the form of money) or indirect (fame, recognition, power quotas, etc.)
Corruption and lack of transparency lead to the creation of tax havens: countries or territories characterized by applying a tax regime significantly favorable to non-resident individuals and companies.
Profits can translate into low or no taxes and non-disclosure of company information and their owners.
That is why tax havens are one of the favorite instruments of anyone who wants to evade taxes.
These tax havens can be a country or a specific territory of a nation, such as Delaware and the Cayman Islands in the US or the British Virgin Islands nicas.
Another point to take into account: tax havens will almost never recognize that they are, since that would call attention to the shady businesses that are there.
There is a lot of talk about politicians and leaders, but tax havens are not exclusive. Celebrities such as Colombian singer Shakira, German model Claudia Schiffer and former Beatles member Ringo Star r are part of Pandora Papers list.
As British investigative journalist Oliver Bullough says in his book “Moneyland” (“Earth of money), “corruption is the crime of opportunism.”
Tax havens benefit from the rates charged to these people and companies through calls companies offshore .
The companies offshore are entities that are created in a country other than the one in which your beneficiary resides. And as stated before, they can be completely legal.
There are a number of legitimate reasons why people can wanting to have money and assets in different countries, such as protection against criminal attacks or protection against unstable governments.
The problem, as Hough explains, is when these companies are created in an environment of opacity and confidentiality.
Many times, companies offshore are accompanied by the term “ghost company”. They are companies created in tax havens and that do not have a real activity but serve as a front for the true purposes of the offshore .
The Shell companies may have money and assets, but they only exist on paper. Hence its other name: “paper companies.”
Some lawyers, accountants and specialized financing services offshore run shell companies. These firms can provide an address and names of paid directors, thus leaving no trace of who is ultimately behind the business.
Breaking the laws? Better to force them
The economists Daniel Kauffman and Pedro Vicente were among the first to define the term “legal corruption ”. They referred to a series of corruption processes but protected by a legal framework.
Kauffman, president emeritus of the Natural Resource Governance Institute, once said that the elites of Venezuela, Congo, Nigeria and the Democratic Republic of the Congo “have used public resource companies for political patronage, frequently (although not always ), through legal tools. ”
This is what he calls the“ privatization of public policies and legislation. ”
Politicians and politicians are usually accused rulers to create this legal framework, skewing the rules to adapt them to their own interests.
“These same politicians can then affirm that their behavior is perfectly legal and that they do not have any corruption case to answer for ”, says Hough
Breaking the laws brings negative consequences that can even lead to jail, depending on the country where you are. .
“Then I force them to be favorable to me. After all, who is going to investigate something that is not illegal? Hough wonders.
The paradises tax and offshore companies offshore they are not the only form of legal corruption, according to Hough.
Another example is when a government takes control of a company and then sells it at ridiculous prices, usually to groups of businessmen linked to power.
According to Hough, it was something seen during the decade of the 330 in the former Soviet Union, but it is also being seen in some parts of Latin America .
So if they are legal, why is it so important?
” However, corruption affects activities everyday things. In poor countries it can have very aggressive forms ”.
How are the conditions changed so that corruption is seen more as an illicit activity without the protection of the powerful?
“It’s the million dollar question,” says Hough.
Since the ICIJ published the Panama Papers in 2016 , lawyers around the world rushed to try to find out the identity of your real customers.
Some governments like the US are trying to transform the laws. On 2019, the House of Representatives approved the Corporate Transparency Law.
“But as you can see, it’s about political will. And when it comes to corruption, many governments lack the will, ”says Hough. Now you can receive notifications from BBC News World . Download the new version of our app and activate them so as not to miss our best content.