Paradise Papers reveal practices of aggressive tax avoidance by multinational corporations


We regularly invite companies to respond to allegations of human rights abuse in the public domain. However, while there is a clear link between tax evasion and human rights issues, due to the number of companies named and the prominence of the Paradise Papers (there is significant media attention and many companies have, or will, issue statements), Business & Human Rights Resource Centre will only be inviting companies to respond where the alleged link to serious human rights abuse is direct.

Feel free to get in touch with us with materials that contain direct human rights allegations against companies.

For full coverage and daily updates on the Paradise Papers see the dedicated pages on The International Consortium of Investigative Journalists (ICIJ), the BBCThe GuardianThe New York TimesSüddeutsche Zeitung. Also see daily insights and responses by Global Witness.

Get RSS feed of these results

All components of this story

17 November 2017

Paradise Papers: corporate duty to respect human rights in the spotlight

Author: Matti Kohonen, Christian Aid, L4BB

...Some practices revealed in the Paradise Papers are likely to be considered illegal and laws may be changed to outlaw them. But we should also be asking if the practices are abusive in terms of human rights conventions and instruments. 

...The State duty to protect human rights is well established, including ensuring effective tax systems to promote child rights.

...This is being tested in Switzerland, where financial secrecy laws are considered to harm the realisation of women’s rights, under the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).

[UN Committee on Economic, Social and Cultural Rights General comment No. 24 (2017)] recognises tax evasion and avoidance as contributing to all forms of discrimination...

...The Paradise Papers are a reminder of the human rights responsibility of lawyers and law firms.

...Where tax abuse is concerned, the Paradise Papers provide a wealth of information for human rights monitoring and investigations.

Read the full post here

15 November 2017

Commentary: Paradise Papers must compel governments to urgently address corporate secrecy

Author: Tutu Alicante, Euractiv

"Paradise Papers highlight the link between grand-scale corruption and poverty", 14 Nov 2017

A French court’s decision on 27 October to convict (in abstentia)... the vice-president of Equatorial Guinea... for embezzling his government out of tens of millions of euros and laundering the proceeds in France was a significant symbolic moment in the global fight against grand corruption.

...The Paradise Papers...highlight the scale of global financial secrecy and the many ways it enables actions that are detrimental to ordinary citizens in both the Global North and South.

...The Teodorin case illustrates how grand corruption hurts the world’s poorest....

...Meanwhile 75% of the people in my country – oil-rich Equatorial Guinea – live in poverty, many without reliable access to quality healthcare, education, sanitation, or electricity.

...[T]he Teodorin case highlights the degree to which corrupt officials in poor countries rely on enablers in the Global North to help launder, hide, and spend their stolen loot.

... Judgments like this are a step in the right direction, but to be more than symbolic they must be accompanied by effective action from the international community that prevents the abuse of the global financial system in the first place....Governments around the world should require that the true ownership of companies – as well as trusts, whose secrecy also makes them easy vehicles for corruption – be publicly available, so that citizens can see who controls them....The European Union is currently considering regulations that could do just that. ...

Read the full post here

8 November 2017

Commentary: Multinationals' tax avoidance drives decrease in public funding and higher taxes on lower-income households

Author: Gabriel Zucman, University of California, Berkeley, in Guardian (UK)

"The desperate inequality behind global tax dodging", 8 Nov 2017

...Our research shows that six European tax havens alone... siphon off a total of €350bn every year...Globally... more than €600bn is artificially shifted by multinationals to the world’s tax havens each year.

Who loses? By and large, the US and the bigger European countries, where most of the multinationals’ workers and consumers are located. 

... [T]he taxes multinationals dodge have to be compensated for by higher taxes on lower-income households... In the absence of higher taxes, public spending has to fall. The revenue EU countries lose to tax havens represents the equivalent of about half of public spending on higher education. 

...The veil of secrecy that used to surround the activities of tax havens has begun to lift. Yet much of the data is still missing. ..It is impossible to properly fight tax evasion in such statistical fog.

...A number of big banks, such as Credit Suisse and HSBC, have been fined by the US. But...Threatening to withdraw banking licences would be a stronger deterrent.

[Also refers to Google]

Read the full post here

7 November 2017

Paradise Papers leak reveals secrets of the world elite's hidden wealth

Author: Juliette Garside, Guardian (UK)

5 Nov 2017

... [A] leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth. The project has been called the Paradise Papers.

It reveals [...] Aggressive tax avoidance by multinational corporations, including Nike and Apple. [...] The secret loan and alliance used by the London-listed multinational Glencore in its efforts to secure lucrative mining rights in the Democratic Republic of the Congo.

...[M]ultinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.

...At the centre of the leak is Appleby, a law firm with outposts in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey. 

...It acted for the establishment offshore, providing the structures that helped to legally reduce their tax bills.  Appleby says it has investigated all the allegations, and found “there is no evidence of any wrongdoing, either on the part of ourselves or our clients"...

[See The Guardian's series on the Paradise Papers here]

Read the full post here

6 November 2017

New Offshore Leak Raises Concerns about House Tax Bill

Author: FACT Coalition

5 Nov 2017

A new leak of documents from an offshore law firm...expose a number of tax avoidance techniques used by the wealthy and multinational corporations to avoid taxes.

The new "Paradise Papers" stories ... raise questions about how the tax measures currently proposed by Congress will address offshore tax haven abuse, according to the Financial Accountability and Corporate Transparency (FACT) Coalition.

Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:

"The Paradise Papers investigation demonstrates the extent to which creative lawyers, accountants, and multinational corporations will go to game the system and dodge their taxes.... These abuses only hurt U.S. domestic and small businesses as well as middle-class taxpayers who pay for them in some combination of higher taxes, larger deficits, and cuts to vital services.

"Given the list of major U.S. companies and prominent officials in this leak, the tax overhaul currently being discussed by Congress offers a prime vehicle to ensure that we close these loopholes and level the playing field for American taxpayers..."

[Also refers to Apple, Glencore, Nike, and Uber]


Read the full post here

6 November 2017

The facts about Apple’s tax payments

Author: Apple

...We’re presenting the facts on this page in response to reporting by the International Consortium of Investigative Journalists. Among the inaccuracies in these reports:

  • The changes Apple made to its corporate structure in 2015 were specially designed to preserve its tax payments to the United States, not to reduce its taxes anywhere else. No operations or investments were moved from Ireland.
  • Far from being “untouched by the United States,” Apple pays billions of dollars in taxes to the US at the statutory 35 percent rate on investment income from its overseas cash.
  • Apple’s effective tax rate on foreign earnings is 21 percent — a figure easily calculated from public filings. This rate has been consistent for many years...

Read the full post here

6 November 2017

Updated Statement By Glencore To The International Consortium Of Investigative Journalists, 6 November 2017

...Glencore complies with its tax obligations in line with the laws and regulations in the countries and territories in which we operate. We provide public disclosure of our economic contributions, including our tax, royalty and other payments to Governments. In 2016, Glencore paid $4bn in taxes and royalties to our host governments...

Read the full post here

5 November 2017

Offshore law firm Appleby's response: 'no evidence of wrongdoing'

Author: Appleby, in Guardian (UK)

...Appleby has thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients.

We refute any allegations that may suggest otherwise and we would be happy to cooperate fully with any legitimate and authorised investigation of the allegations by the appropriate and relevant authorities...

[This statement was edited by The Guardian]

Read the full post here