The forthcoming release of data contained in documents from a Panama law firm could provide insight into the business activities and associations of more than 200,000 offshore entities.

The International Consortium of Investigative Journalists (ICIJ) has announced that it will release a searchable database on 9 May, containing limited, selected information in the public interest on more than 200,000 offshore entities named in documents leaked from the Panamanian law firm Mossack Fonseca.

The interactive database will include information about:

• companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the US, and involves individuals in more than 200 countries and territories.
• more than 100,000 additional companies that were part of its 2013 Offshore Leaks investigation.

Users will be able to search the database to view the owners of offshore entities, although personal details will not be published and the ICIJ states that “the selected and limited information is being published in the public interest.”

Corporate treasury department opportunity

This could present an opportunity for companies needing to carry out risk or financial assessments on third-parties, such as bank partners, entities involved in potential M&A and suppliers. While the ICIJ underlines that inclusion in the database does not in any way mean that an entity has broken the law or acted improperly, it may nevertheless be a source of useful information on an entity's business or financial activity.

Health warnings

The ICIJ also state, there are legitimate uses for offshore companies and trusts and the organisation does not intend “to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly”.

However, US President Barack Obama has called the use of secretive tax havens for the purpose of global tax avoidance “a huge problem” but he also made clear that “a lot of it is legal, but that’s exactly the problem. It’s not that they’re breaking the laws, it’s that the laws are so poorly designed.”

---

CTMfile Take: Even though there are legitimate uses of tax havens, it wouldn't hurt if a corporate treasury department is concerned about a particular counter-party to look at the ICIJ 'Panama Papers' database.