Action required on Pandora papers


The The Malaysian government must act without fear and encourage the investigation of the names mentioned in the Pandora Papers in order to identify possible wrongdoing and ongoing corruption. The main purpose of the investigation is to clear their names.

The government should make it mandatory for all Members of Parliament (MP) and members of the State Assembly to report all their onshore and offshore assets.

This will allow the authorities to detect any new assets or property owned by an MP, especially those in high positions in political parties.

One of the ways to combat corruption and money laundering activities involving offshore accounts is to introduce a central register of beneficial owners of companies registered in Malaysia and those who hold funds in Labuan.

A beneficial owner of a business is a person who genuinely owns, enjoys and controls the business even though the title, in some form of ownership or security, is under another name. It plays an important role in the transparency of ownership.

Many financial criminals use shell companies to hide money and property details through nominees, allowing corrupt criminals to launder and avoid detection of their ill-gotten wealth.

The use of designated directors and shareholders will help obscure the beneficial owners of these companies.

On another note, the Pandora Papers are another avenue in which the Inland Revenue Board can examine whether taxpayer tax returns are consistent with the information that is automatically exchanged and received through Common Reporting Standards (CRS) by countries. participants.

The objective of CRS, developed by the Organization for Economic Co-operation and Development in 2014, is to help the international community fight tax evasion.

The Pandora Papers are the 2021 large-scale investigative journalists project of the International Consortium of Investigative Journalists (ICIJ) located in Washington DC.

The ICIJ worked with 140 media organizations in 117 countries.

The media act as a bipartisan observer reporting to the public on the functioning of the democratic process.

In this context, investigative journalism plays a crucial role in the fight against corruption.

The Pandora Papers leaks include 6.4 million documents, around three million images, over a million emails, and nearly half a million spreadsheets.

Confidential documents incriminate hundreds of global wealthy elites, senior officials, oligarchs and billionaires using shell companies to move wealth overseas, anonymously purchase real estate or luxury goods to avoid tax and corrupt their offshore accounts.

According to the ICIJ, more than 35% of past and current leaders face allegations of fraud, corruption, money laundering and global tax evasion.

Among those named in the Pandora Papers were Malaysian businessmen and politicians.

The Pandora Papers also revealed the owners of more than 1,500 properties in the UK, including the ruling family of Qatar, the current Pakistani finance minister, Sir Philip and Lady Green, the King of Jordan, the prime minister of the Czech Republic and the President of Kenya.

The Australian, British and Pakistani governments launched investigations after secret documents revealed how the elite were protecting their wealth.

The Malaysian opposition leader has failed to launch a parliamentary debate on the revelations of several current government officials on both political sides.

Offshore Financial Centers (OFCs) are estimated to hold up to $ 36 trillion in cash, gold and securities, not counting tangible assets such as real estate, art and jewelry.

A few years ago, the Boston Consulting Group said that Singapore held about one-eighth of the world’s total offshore wealth stock while the International Monetary Fund reported an estimate that over 95% of all commercial banks in Singapore are subsidiaries of foreign banks, which is a testament to its extreme dependence on foreign and offshore money.

Offshore service providers are located in Cayman Islands, Switzerland, Hong Kong, Bahamas, Luxembourg, Ireland, Singapore, Panama, Trinidad and Tobago and Seychelles to name a few. a few.

Offshore countries offer the following services:

1. Ease in the creation of companies;

2. More confidentiality, less regulations;

3. Strict banking secrecy in their laws conceals the identity of the real business owners;

4. There is no low or only nominal tax or corporate tax; and

5. Protection against local, political or financial instability.

In an article by The Guardian, the discussion on offshore centers can get bogged down in technical details, but the best definition comes from expert Nicholas Shaxson who sums it up as follows: “You take your money elsewhere, in another country, in order to escape the rules. and laws of the society in which you operate. In doing so, you are stealing money from your own company for hospitals, schools, roads. “

Many financial criminals have used offshore companies as fronts for drug trafficking, money laundering, arms smuggling, monopolization of industries, privatization, fraud and bribery of politicians and government officials.

A foreign policy article said that the money needed to pay for the pandemic is actually on hand hidden in the OFC, more commonly known as tax havens.

The use of offshore entities outside the country is not illegal provided it is done for legitimate reasons.

Offshore bank accounts in Malaysia are under the control of the Labuan Financial Services Authority.

But the practice is commonly used to dodge taxes. The main problem is how they got the large sums of money and their other sources of funds and wealth.

The United Nations Office for Drug Control and Crime Prevention has stated that “the real problem, therefore, is not in passing general condemnations or in making efforts to eradicate banking secrecy and financial services. offshore, but to ensure that the legitimate uses of these facilities remain available while making them much more difficult to use them directly for criminal activities or to launder the proceeds of drug trafficking and other forms of organized crime ”.

The Covid-19 pandemic revealed many weaknesses in government departments that we thought were our strengths.

With our B40 now the B50, it is important that all taxpayers’ money stays in Malaysia and not funneled into tax havens, in order to help rebuild Malaysians.

Be patriotic and Malaysian for the Malays.

Datuk Sri Akhbar Satar is president of the Malaysia section of the Association of Certified Fraud Examiners. Comment: [email protected]


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