The Pandora Papers, the latest data leak of 12 million offshore documents, images and spreadsheets from 14 corporate services providers, has caused some ripples across the world’s media.

More than 600 journalists in 117 countries have sifted through the data, obtained by the International Consortium of Investigative Journalists (ICIJ) and shared with more than 140 media partners around the world.

In the words of the Guardian, “the files reveal how wealthy individuals can shield their income and their assets from taxation and scrutiny by hiding them offshore”.

Although the language used suggests otherwise, the Guardian added not everyone named in the Pandora Papers is accused of wrongdoing, rather that ensuring assets remain hidden could sometimes enable tax avoidance.

So far, the revelations struggle to keep up with the media hype and the volume of coverage. Most media reports focused on property purchases through offshore companies.

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In the UK, 1,500 properties were bought using offshore firms, including one commercial property purchased by former Prime Minister Tony Blair. The King of Jordan, as well as Azerbaijan’s and Qatar’s ruling families have equally amassed fortunes and avoided tax, by acquiring properties around the world through offshore vehicles.

The Czech Prime Minister had failed to declare an offshore investment company that was used to buy luxury properties on the Cote d’Azur. And the family of Kenyan president Uhuru Kenyatta had secretly owned a network of offshore companies.

In some cases, offshore structures had been used by people accused of corruption and other crimes to invest in property assets onshore.

The ICIJ said the files showed that the offshore system continues to thrive despite decades of legislation, investigations and international agreements aimed at combating money laundering and tax dodging.

The data also demonstrated that South Dakota and more than a dozen U.S. states had become leaders in the business of selling financial secrecy.

Explaining why the Pandora Papers were important, the New York Times said, “The report was published against the backdrop of an ever sharpening rich-poor divide in the world, made worse by the pandemic, which has heightened emotional resentments about wealthy privilege in many countries.”

In countries where leaders have limited accountability to the public, this type of revelation could give the public information and insight denied by the political establishment, the newspapers said.

Cayman in the Pandora Papers

Almost nothing in the data refers to the Cayman Islands, unlike the British Virgin Islands, which is connected to two thirds of the offshore companies mentioned.

But this does not mean Cayman is not part of the global media coverage of the data leak.

The Guardian, which led the media investigation in the UK, frequently used Cayman as a brand name to promote its coverage of the Pandora Papers. The newspaper on several occasions noted the documents show how the wealthy create “offshore structures and trusts in tax havens such as Panama, Dubai, Monaco, Switzerland and the Cayman Islands”.

Other media followed suit with similar boiler plate statements.

In an article explaining why the Guardian covered the Pandora Papers, the news organisation said: “When the rich and powerful stash their money in tax havens, they’re essentially buying secrecy. Those wealthy enough to organise their financial affairs in places such as the Cayman Islands and Monaco expect to be shielded from public scrutiny.”

While much of this was legal, the Guardian argued, some of it is not. No evidence of wrongdoing in the Cayman Islands was presented by the news organisation.

The New York Times offered, in the same vein: “Hiding wealth is a specialty offered by tax havens such as Panama, Dubai, Monaco, Switzerland and the Cayman Islands, as well as some American states like South Dakota and Delaware”.

Bloomberg adorned its Pandora Papers explainer with images of Stingray City and defined the term ‘offshore’ as referring to low-tax regimes in territories such as the BVI, Panama or Cayman, but also Switzerland and US states like Delaware, Nevada or South Dakota.

Bloomberg further mentioned Cayman to explain that there are legitimate reasons to use offshore financial centres, such as “US hedge funds and other money managers [pooling] assets into Cayman Islands master funds to reduce financial and administrative costs”.

The ICIJ, and others, highlighted Cayman as one of the traditional offshore havens that have attracted most of the attention of policymakers of the world’s most powerful nations, adding that this had allowed South Dakota, Nevada and other US states to “transform themselves into leaders in the business of peddling financial secrecy”.

The ICIJ noted the Pandora Papers only covered a limited number of corporate services providers and as a result many jurisdictions were not represented in the data. In the Paradise Papers, a leak from offshore law firm Appleby, more of the documents referred to Bermuda and Cayman, because that is where the firm operates and both jurisdictions are “popular havens for corporations”, the consortium said.

None of the 14 corporate services providers that were subject to the Pandora Papers leak have a focus on, or significant presence in, Cayman.

The current data contains more beneficial owners of offshore companies and structures because much of the information comes from providers for the BVI’s Beneficial Ownership Secure Search System, or BOSS, the ICIJ said. Like other offshore centres, the BVI requires service providers to collect and report the names of the true owners of entities registered in the jurisdiction. The information is shared with competent authorities, such as law or tax enforcement, but not available to the public.

Jude Scott, CEO, Cayman Finance

Jude Scott, the outgoing CEO of Cayman Finance, told the Cayman Compass: “Reports like Pandora Papers unfortunately often start with the misconception that zero tax jurisdictions are tax havens. However, if you look carefully at the substance of those reports they show that the Cayman Islands is a transparent, tax neutral jurisdiction that provides essential benefits to the global economy without posing tax harm.”

Indeed, the vast majority of the data that refers to Cayman in this and previous leaks does not show illegal or illicit activity.

Even well-known offshore critic and tax campaigner Richard Murphy said in a couple of blog posts that he had not given the Pandora Papers much attention, because they did not tell anything new, were based on old, and possibly outdated, data and some of the revelations were “pretty weak”.

Asked by the Guardian to comment on Tony Blair’s purchase of a UK business property wrapped in an offshore company, Murphy said he could find no obvious tax abuse because that is how most UK commercial property is now traded. The real scandal was not what Blair did but “the failure of the government to tackle this”.

Richard Murphy

Murphy noted the papers showed remarkably little tax evasion, nor “that much tax avoidance of the sort once seen”. Big business appeared to have cleaned up its act, he argued, because the new systems intended to beat offshore are working. 

“The OECD has delivered real gains,” he added, with the exchange of beneficial ownership and taxpayer information, as well as country-by-country reporting proving to be a real deterrent.

Murphy said the Pandora Papers imply that offshore tax abuse is no longer about personal or corporate income tax abuse, but possibly about the abuse of taxes on capital, and the focus needed to shift.

“No one that I have seen so far is saying the UK is no better regulator of companies than most of tax haven locations, and that it also provides far too much corporate secrecy, which may well be much more damaging to our economy by permitting more domestic tax evasion than happens offshore,” he wrote.

While “tax haven reform” was important, Murphy said, so is UK corporate reform, including his demands to make the accounts of limited liability entities public in all jurisdictions.


It is unlikely that the ‘success’ of the measures against offshore financial centres will eventually lead to a shifting focus. Tax evasion and tax avoidance have long been synonymous with offshore.

This is despite tax gap analyses by tax authorities in the UK, for instance, consistently showing that much more tax money is lost domestically in the black market, where income from trade and services is not reported or underreported, or from VAT fraud, than offshore structuring.

More than 40% of the tax gap in the UK has been linked to small companies. Large businesses make up a fifth and individuals only a tenth of the tax gap.

Paul Byles

A similar misconception surrounds the risk of money laundering.

Economist Paul Byles, director of consulting firm FTS, said, “In some ways the Pandora Papers reaffirm the worst kept secret that the vast majority of money laundering risks resides onshore.

“While virtually every country continues to face the risk of money laundering and similar activity, even with high standards of regulation, the continued depiction of smaller international financial services jurisdictions as being a key part of the global problem would not be supported by any objective assessment.”

Byles believes there are two main reasons why this false narrative has stuck.

“The first is because it’s simply more entertaining to perpetuate the image of a 1980s world in media and movies. It makes absolutely no sense to say that the villain in the next James Bond movie has his bank account in Dakota. So one of the more well known [international financial centres (IFCs)] is mentioned instead.”

The second reason is both geopolitical and economic, he said. “The idea that capital can legally flow through certain smaller IFCs doesn’t sit well with onshore authorities, even when that capital flow is often benefiting the very country from which the criticism comes.”

Addressing this perception had not worked for the past three decades, said Byles, adding that simply saying ‘we are not a tax haven’ will bear very little fruit.

Instead, Byles said, more resources should be spent educating policy makers more directly onshore. And, while it has been difficult to achieve politically, the smaller jurisdictions must get together in a joint advocacy effort.

“Until each IFC puts their political and ‘unique’ circumstances aside they are unlikely to ever work together to advocate on the basis of unfair trade practices and lack of, or threat to deny, access to markets, which is ultimately what this issue represents,” Byles said.

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