OFFSHORE OR GLOBAL SCANDAL ?
Since 2011, Syria’s government has sparked a civil war that has claimed over 470,000 lives. At the same time, more than a billion people worldwide struggle to meet basic needs like food and water – that’s about one in seven people. It may seem unusual to connect the Syrian Civil War to global poverty, but I intend to show how they’re linked. We’ll explore the darker side of finance, focusing on companies that move their operations offshore.
WHAT ARE OFFSHORE COMPANIES?
An offshore company operates outside its home country for financial, legal, and tax benefits. It’s legal, but often linked to tax evasion and illegal activities. Countries like Switzerland and Panama support these companies by offering low taxes and essential services. A shell company, a type of offshore company, has no real business or assets. It exists only on paper, without employees or an office. Setting up a shell company is easy and doesn’t require much money or expertise. You can do it online in minutes. These companies can hide illegal funds, and you’ll get a bank account and credit card. These are used globally, keeping your identity private. Transactions are in the company’s name, not yours. If you have a lot of money, you don’t need to go online for this.
WHO ARE BEHIND OFFSHORE COMPANIES?
These companies often rely on shady law firms in tax havens. Such firms create and sell shell companies. For example, you can buy a backdated company from 2005, meeting all legal requirements. Simply pay the price, and you skip the long registration process. A nominee director, placed by the law firm, will run your company. This director’s name is on all documents, but your identity remains private, known only to the law firm. This setup is legal in tax havens. Notably, Warren Buffet leads seven companies. In contrast, a nominee director can oversee up to 10,000 companies. You can start a shell company with just $900. It’s estimated that around 20 million shell companies exist worldwide, many funded through money laundering.
PANAMA PAPERS
The Panama Papers exposed 2.6 terabytes of data, 11.5 million documents, and over 214,000 shell companies. This was 160 times larger than WikiLeaks. Named after the Panamanian law firm Mossack-Fonseca, it revealed the firm’s role in creating offshore entities. Whistle-blower *John Doe* tipped off the German newspaper *Suddeutsche Zeitung*. Then, the paper collaborated with the International Consortium of Investigative Journalists (ICIJ) and 400 journalists across 46 countries for a year-long investigation. They found Mossack-Fonseca helped clients evade taxes, avoid sanctions, and launder money by setting up shell companies in tax havens like Panama. The firm’s clients included current and former leaders, celebrities, business figures, and criminals. Notable names included the Prime Ministers of Iceland, Pakistan, and the UK, Saudi King, Russian President Vladimir Putin, and China’s President. In India, the list featured DLF chairman KP Singh, Amitabh Bachchan, and Harish Salve. Upcoming disclosures are set to unravel illegal banking among the world’s elite.
OFFSHORE VICTIMS
Mossack Fonseca worked with Rami Makhlouf, a cousin of Syrian President Bashar Al-Assad, who largely controls Syria’s economy and contributes to its crises. After the Syrian government waged war on its citizens, the US and UK imposed sanctions on Syrian defense companies. However, these companies used shell companies to raise funds. This funding allowed them to buy air fuel and pay Syrian soldiers, leading to the deaths of thousands of innocent Syrians. In Uganda, a company selling its oil fields paid Mossack Fonseca to avoid $400 million in taxes. For Uganda, this loss is significant. Some hospitals in Uganda lack basic supplies like scissors, cotton balls, and beds. According to the Tax Justice Network, individuals worldwide are hiding $32 trillion in shell companies. This amount exceeds the combined GDP of the US, China, India, and Germany.
ROAD AHEAD
The recent revelation is just the beginning. Many law firms like Mossack Fonseca exist worldwide. Icelanders forced their prime minister to resign. Similarly, people should express anger and demand transparency from the powerful. This is crucial for equality. Oxfam reports that 62 people have the same wealth as half the world’s population. Urgent action is needed to address this extreme inequality. It threatens the fight against global poverty. We must ban tax havens and create uniform laws worldwide.
You can certainly see your expertise in the work you write. The world hopes for even more passionate writers like you who are not afraid to say how they believe. Always go after your heart.