PP.docx - Noor Us Sabah Gilani – 12519 Assignment 1(Financial Accounting – 4th December 2017 The Panama Papers released 11.5 million documents that

PP.docx - Noor Us Sabah Gilani – 12519 Assignment...

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Noor Us Sabah Gilani – 12519 Assignment 1 (Financial Accounting) – 4 th December, 2017 The Panama Papers released 11.5 million documents that named individuals who were direct clients to the Panamanian Law firm, Mossack Fonseca, which helped these people to setup offshore structures in regions where tax laws are not that harsh. Now these companies known mainly as shell companies are not illegal to form but the Law firm named above helped rich personalities to store their corruptly earn and illicitly sourced money into these shell companies which later transferred this money from one shell company to another as investments only so that identification of the client of Mossack Fonseca remains anonymous and untraceable. This kind of job was done for two main reasons: first for tax evasion, second for money laundering. The trick used by the Law firm was to make the entire track of money complicated; this was their key job and for which they heavily charged their clients. However, due to the leaks of the Panama Papers, clients were exposed and they were asked exactly how they had earned those large sums of money and if earned legally, how come they did not pay any taxes on them. The flow of money was one of the key problems that originated from the leak of Panama Papers. In many cases which were identified in the documents, the money which was illicitly earned travelled from domestic bank accounts owned by individuals to offshore companies and then later given out to the
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