All Things Digital

Friday 22, April 2016

The Panama Papers: What You Need To Know


This week OnQue gives you the lowdown on the Panama Papers and what happens when brands are negatively affected by leaks of sensitive information and the increase in international transparency.


How did it happen? 

The world’s biggest data leak occurred when German investigative newspaper Süddeutsche Zeitung was given access to an enormous 2.6 terabytes of data by an anonymous source. The information was then taken into the hands of The International Consortium of Investigative Journalists (ICIJ) who organised an investigation by news organisations around the world.

The findings revealed over 11 million confidential documents linking 143 politicians from more than 50 companies to secret offshore accounts. 


What is Mossack Fonseca? 

Mossack Fonseca is the Panamanian law firm heralded by German-born lawyer Jurgen Mossack and Panamanian lawyer Ramon Fonseca, who until a month ago worked as an advisor to Panamanian President Juan Carlos Varela.

The success of Mossack Fonseca relies on a global network of accountants and prestigious banks that hire the firm to manage the finances of their wealthy clients.  Commerzbank, HSBC and Societe Generale are all clients of the law firm and act as major drivers for companies to remain impenetrable within tax havens.


Source: A marquee of the Arango Orillac Building in Panama lists the Mossack Fonseca law firm.


There is lot of Mossack Fonseca’s work that is completely legal (as their website will confirm). However for the first time in over 40 years the leak unveiled sophisticated insights into the law firm’s inner workings with the findings revealing shady operators who have been given more than enough room to move.    

The corporate service provider has acted as facilitator for international corruption and tax evasion for the world’s elite. Mossack Fonseca services used shell company structures and trust accounts to allow their clients to operate under steel walls of secrecy. From billion-dollar webs of offshore agreements to shady investments the Panama Papers reveal the extensiveness of financial loopholes.


Where is it based? 

Mossack Fonseca is based in Panama but is a global operation. The law firms website shows a network of 600 people working in 42 countries worldwide. It runs global franchises with separately owned affiliates able to sign up new customers and operate with exclusive rights to use the brand. Mossack Fonseca operates in tax havens around the world including Cyprus and the British Virgin Islands, Switzerland and in the British Crown dependencies Guernsey, Isle of Man and Jersey.       


So it must be pretty big?

Mossack Fonseca is the world’s fourth biggest provider of offshore services and has acted on the behalf of more than 300,000 companies. Over half of the companies are registered in the UK and British-administrated tax havens.


Why is it a big deal? 

The unprecedented security breach shows how global industries of law firms and big banks have been selling financial secrecy to fraudsters, celebrities, drug traffickers, billionaires, celebrities, politicians and sports stars.  

The leak revealed offshore holdings of 12 current and former world leaders including recently resigned Prime Minister of Iceland Sigmundur David Gunnlaugsson as well as friends of Russian President Vladimir Putin, members of China’s Communist Party Elite and relatives of Syria’s President Bashar al-Assad. 


Source: Sigmundur David Gunnlaugsson, recently resigned Prime Minister of Iceland.


It doesn’t stop there.

National leaders with offshore wealth also include, Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine and Alaa Mubarak, son of Egypt’s former president. 

And lets not forgot David Cameron, who’s father has been running an offshore investment fund avoiding the need to pay tax in Britain by hiring an array of Bahamas residents to sign off paperwork. Since its days of inception the fund has been registered with HM Revenue and Customs, filing detailed tax returns annually.   


Source: Friends of Russian President Vladimir Putin were revealed in the data leak. 


Twenty-nine Forbes-listed billionaires and over 1,000 links to Australian companies have also been found in the data leak along with the passports of hundreds of Australian citizens connected to companies as shareholders, directors and beneficial owners. 

This is just the beginning.


Mossack Fonseca and Brand Transparency  

As digital marketers and brand consultants the aforementioned is a very real representation of what happens when brand transparency is left at the door.  As you all know social media is now “humanising business” and ultimate consumer company goals are now focused on creating sustainable relationships with customers that endure beyond a single transaction.  

Brand loyalty is undeniably the foundation of every successful consumer business. Companies that invest in building authentic relationships with their customers are not only rapidly gaining market share, they’re putting buyers in control and enabling them to make better, more appropriate choices.

In the case of Mossack Fonseca, Jurgen Mossack states, “when you create hundreds of thousands of offshore companies, some are bound to end up in the hands of rotten characters: its just the nature of the business and isn’t the fault of the manufacturer.”

However, the nature of business shouldn’t be that your brand, through lack of internal and external transparency, finds itself at centre of a global scandal of corruption.

Some of Australia’s largest companies are also starting to feel the scrutiny after being named in this leak, as well as the Unaoil leak from a few weeks earlier. Wilson Holdings, BHP and Leighton Holdings have all been allegedly linked to records in the leaked papers.

The full market place consequences of the increasing banking transparency have yet to be assessed, but at OnQue we believe that ethical corporate values and beliefs are at the heart of great brands and that once these are embedded communication can then form the basis of a solid competitive offering.

It is clear that brand loyalty is the future battleground of marketing and something we excel at in OnQue. Get in touch to find out how we can help your accelerate your brand performance, without any shortcuts.  

The Panama Papers: What You Need To Know

This week OnQue gives you the lowdown on the Panama Papers and what happens when brands are negatively affected by leaks of sensitive information and the increase in international transparency.