The Strategist

Paradise Papers: New secrets of ultra-rich

11/06/2017 - 05:36

Yet another major leak of offshore documents has been revealed. Appleby group, which works on the Bermuda and Cayman Islands, confirmed report of ICIJ journalist consortium (International Consortium of Investigative Journalists) about it. It is about 13.5 million confidential documents from the group’s correspondence with its clientele. The most interesting are leaks of Glencore documents. In addition, ICIJ reporters found investments by US Secretary of Commerce Wilbur Ross in the Navigator transport company working with Russian SIBUR, and DST Group's investments in Facebook and Twitter - this information, however, was previously officially disclosed. Among the victims of the leak are also the Queen of the United Kingdom and Apple.

ICJI is a reporter consortium created by journalists from a number of world media and independent investigators in 1997. It has become widely known in 2015 after revealing Panama Papers - internal correspondence archive and documentation of the Panamanian registry firm Mossack Fonseca. Just recently, members of the consortium received archive of messages and documents of Appleby Global group companies. Appleby is the oldest and largest registrar company in Bermuda, in addition, the company is active on the Cayman Islands and in 17 more offshore jurisdictions.

The archive of reports, called the ICIJ Paradise Papers, is slightly larger than the Panama archive (13.6 million records versus 11.5 million documents of Mossack Fonseca) and is structured similarly - the smaller part is made up of Appleby registration documents in offshore jurisdictions, the large consists of internal correspondence of the company and communication with the clientele.
In addition, the archive includes a small part of messages between Asiaciti private trust company and the group’s subsidiary, Estera. Like the Panama Archives, the Paradise Archive was handed over by the ICIJ to the German newspaper Süddeutsche Zeitung. Origin of the documents is not disclosed; it is stated only that the archive has several sources. Appleby said in an official statement that it was confident that the files had been stolen from the company as a result of a computer attack, but generally declined to comment on correspondence with clients. The documents’ dating is extremely wide - from 1950 to 2016.

One of ICIJ’s publications, in fact, is devoted to Appleby business. In particular, the company is accused of conducting "hundreds" of cases with clients without assigning to it corresponding internal IDs (de facto secret clients circumventing the general procedures). Appleby has been audited by many offshore jurisdictions. In 2016, the company in Bermuda was fined for violating the order of business for $ 500 thousand - this information was not disclosed either by the authorities of the offshore company or by the company. The group denies any violations of the laws of the jurisdictions in which it operates.

Leak of documents of Appleby’s largest customer, Glencore group, is one of the most sensitive in terms of large business. A detailed article, based on part of Glencore documents regarding its business in the Democratic Republic of the Congo, describes financial details of Glencore's entry into the Katanga Mining project. There are no specific allegations of corruption financing in the Congo. However, the actual amount of leakage of Glencore corporate documentation is now unseen, it is only known that the Paradise Archive contains some documents code-named "Project USA" (Glencore’s purchase of a large Canadian grain trader in 2012), "The Big Game project" (it is assumed that the documents can be associated with Glencore's participation in the privatization of Russian Rosneft), projects "Dawn", "Everest" and others. Glencore is a fairly closed company with a sensitive politically trading business.

The second part of ICIJ's investigations looks like an open attempt to join a media campaign in the US against President Donald Trump and his team. Any information that directly compromises Mr. Trump, his relatives and his government ministers has not been found in the Paradise papers, despite the publication’s headline "Trump-Russia links and its piggy bank are disclosed at 1%." Appleby’s documents contain reports on participation of Wilbur Ross, the US trade minister, in funds owned by Navigator transport company - it sells transportation services for chemical products, including Russian SIBUR (sales of about $ 68 million in two years) and Venezuelan PDVSA. Mr. Ross’ investments in the company related to the Navigator were regularly announced in the Minister's declarations.

The third part of the investigation, while fragmentary, is devoted to numerous documents related to "star" clients, from which it is difficult to draw any conclusions.

Among the clients of offshore companies in Cayman and Bermuda are Nike, Apple and about 100 large multinational companies. Besides, the investigators spotted that Queen Elizabeth II of Great Britain has been investing in the company in the sphere of consumer services. The list of clients also includes several ministers in the government of Donald Trump (yet it is not directly reported whether they are mentioned in declarations).

ICIJ also disclosed documents from a rather private jurisdiction, the Isle of Man. The papers are dedicated to trustful ownership of yachts and business jets by "star" clients (for the time being, only entrepreneurs from Azerbaijan were involved in publications). The most politically sensitive, apparently, is a message about Stephen Bronfman, a closest associate of Canadian Prime Minister Justin Trudeau, the main fundraiser of the Liberal Party of Canada. He is accused in tax optimization through offshore jurisdictions.


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