What Are The Panama Papers?

I have written several articles on postings related to politics. A list of links have been provided at bottom of this article for your convenience. This article will, however address different aspects on these political events.

Frankly this is a new subject for me. I researched the subject and have tried to distill it down to a manageable subject matter. I have basically deferred to the experts on the subject, and I therefore have not added a lot of my own input on the subject. Remember the function of this blog is to disseminate data on current events in an accurate and unbiased manner. And the hope is that I will generate active discussions on the subject matter. I also cover historical material when it pertains to current events. The Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities. The documents, some dating back to the 1970s, were created by, and taken from, Panamanian law firm and corporate service provider Mossack Fonseca, and were leaked in April 2016.

The documents contain personal financial information about wealthy individuals and public officials that had previously been kept private. While offshore business entities are legal , reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraudtax evasion, and evading international sanctions.

John Doe“, the whistleblower who leaked the documents to German journalist Bastian Obermayer from the newspaper Süddeutsche Zeitung (SZ), remains anonymous, even to the journalists who worked on the investigation. “My life is in danger”, the whistleblower told them. In a May 6, 2016 statement, John Doe cited income inequality as the reason for the action and said they leaked the documents “simply because I understood enough about their contents to realize the scale of the injustices they described”. Doe added that they had never worked for any government or intelligence agency and expressed willingness to help prosecutors if granted immunity from prosecution. After SZ verified that the statement did in fact come from the source for the Panama Papers, the International Consortium of Investigative Journalists (ICIJ) posted the full document on its website.

SZ asked the ICIJ for help because of the amount of data involved. Journalists from 107 media organizations in 80 countries analyzed documents detailing the operations of the law firm.  After more than a year of analysis, the first news stories were published on April 3, 2016, along with 150 of the documents themselves. The project represents an important milestone in the use of data journalism software tools and mobile collaboration.

The documents were dubbed the Panama Papers because of the country they were leaked from, but the Panamanian government expressed strong objections to the name over concerns that it would tarnish the government’s and country’s image worldwide, as did other entities in Panama and elsewhere. Some media outlets covering the story have used the name “Mossack Fonseca papers”.

Disclosures

A conversation between Süddeutsche Zeitung reporter Bastian Obermayer and anonymous source John Doe. In addition to the much-covered business dealings of British prime minister David Cameron and Icelandic prime minister Sigmundur Davíð Gunnlaugsson, the leaked documents also contain identity information about the shareholders and directors of 214,000 shell companies set up by Mossack Fonseca, as well as some of their financial transactions. It is generally not against the law (in and of itself) to own an offshore shell company, although offshore shell companies may sometimes be used for illegal purposes.

The journalists on the investigative team found business transactions by many important figures in world politics, sports and art. While many of the transactions were legal, since the data is incomplete, questions remain in many other cases; still others seem to clearly indicate ethical if not legal impropriety. Some disclosures – tax avoidance in very poor countries by very wealthy entities and individuals for example – lead to questions on moral grounds. According to The Namibian for instance, a shell company registered to Beny Steinmetz, Octea, owes more than $700,000 US in property taxes to the city of Koidu in Sierra Leone, and is $150 million in the red, even though its exports were more than twice that in an average month in the 2012–2015 period. Steinmetz himself has personal worth of $6 billion.

Other offshore shell company transactions described in the documents do seem to have broken exchange laws, violated trade sanctions or stemmed from political corruption, according to ICIJ reporters. For example:

  • Uruguay has arrested five people and charged them with money-laundering through Mossack Fonseca shell companies for a Mexican drug cartel.
  • Ouestaf, an ICIJ partner in the investigation, reported that it had discovered new evidence that Karim Wade received payments from DP World (DP). He and a long-time friend were convicted of this in a trial that the United Nations and Amnesty International said was unfair and violated the defendants’ rights. The Ouestaf article does not address the conduct of the trial, but does say that Ouestaf journalists found Mossack Fonseca documents showing payments to Wade via a DP subsidiary and a shell company registered to the friend.
  • Swiss lawyer Dieter Neupert has been accused of mishandling client funds and helping both oligarchs and the Qatari royal family to hide money.

Named in the leak were 12 current or former world leaders; 128 other public officials and politicians; and hundreds of celebrities, businessmen, and other wealthy individuals of over 200 countries.

Tax havens

Mossack Fonseca

Individuals and entities may open offshore accounts for any number of reasons, some of which are legal but ethically questionable. A Canadian lawyer based in Dubai noted, for example, that businesses might wish to avoid falling under Islamic inheritance jurisprudence if an owner dies. Businesses in some countries may wish to hold some of their funds in dollars also, said a Brazilian lawyer. Estate planning is another example of legal tax avoidance.

American film-maker Stanley Kubrick had an estimated personal worth of $20 million when he died in 1999, much of it invested in an 18th-century English manor he bought in 1978. He lived in that manor for the rest of his life, filming scenes from The ShiningFull Metal Jacket and Eyes Wide Shut there as well. Three holding companies set up by Mossack Fonseca now own the property, and are in turn held by trusts set up for his children and grandchildren. Since Kubrick was an American living in Britain, without the trust his estate would have had to pay transfer taxes to both governments and possibly have been forced to sell the property to obtain the liquid assets to pay them. Kubrick is buried on the grounds along with one of his daughters, and the rest of his family still lives there.

Other uses are more ambiguous. Chinese companies may incorporate offshore in order to raise foreign capital, normally against the law in China. In some of the world’s hereditary dictatorships, the law may be on the side of the elite who use offshore companies to award oil contracts to themselves, or gold concessions to their children, however such dealings are sometimes prosecuted under international law.

While no standard official definition exists, The Economist and the International Monetary Fund describe an offshore financial center, or tax haven, as a jurisdiction whose banking infrastructure primarily provides services to people or businesses who do not live there, requires little or no disclosure of information when doing business, and offers low taxes.

“The most obvious use of offshore financial centers is to avoid taxes”, The Economist added. Oxfam blamed tax havens in its 2016 annual report on income inequality for much of the widening gap between rich and poor. “Tax havens are at the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share,” said Raymond C. Offenheiser, president of Oxfam America, “depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality.”

International Monetary Fund (IMF) researchers estimated in July 2015 that profit shifting by multinational companies costs developing countries around US$213 billion a year, almost two percent of their national income. Igor Angelini, head of Europol‘s Financial Intelligence Group, said that shell companies “play an important role in large-scale money laundering activities” and that they are often a means to “transfer bribe money”. Tax Justice Network concluded in a 2012 report that “designing commercial tax abuse schemes and turning a blind eye upon suspicious transactions have become an inherent part of the work of bankers and accountants”.

Money-laundering affects the first world as well, since a favored shell company investment is real estate in Europe and North America. London, Miami, New York, Paris, Vancouver and San Francisco have all been affected. The practice of parking assets in luxury real estate has been frequently cited as fueling skyrocketing housing prices in Miami, where the Miami Association of Realtors said that cash sales accounted for 90% of new home sales in 2015. “There is a huge amount of dirty money flowing into Miami that’s disguised as investment,” according to former congressional investigator Jack Blum. In Miami, 76% of condo owners pay cash, a practice considered a red flag for money-laundering.

Real estate in London, where housing prices increased 50% from 2007 to 2016, also is frequently purchased by overseas investors. Donald Toon, head of Britain’s National Crime Agency, said in 2015 that “the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK”. Three quarters of Londoners under 35 cannot afford to buy a home.

Andy Yan, an urban planning researcher and adjunct professor at the University of British Columbia, studied real estate sales in Vancouver—also thought to be affected by foreign purchasers—found that 18% of the transactions in Vancouver’s most expensive neighborhoods were cash purchases, and 66% of the owners appeared to be Chinese nationals or recent arrivals from China. Calls for more data on foreign investors have been rejected by the provincial government. Chinese nationals accounted for 70% of 2014 Vancouver home sales for more than CA$3 million. On June 24, 2016 China CITIC Bank Corp filed suit in Canada against a Chinese citizen who borrowed CN¥50 million for his lumber business in China, but then withdrew roughly CA$7.5 million from the line of credit and left the country. He bought three houses in Vancouver and Surrey, British Columbia together valued at CA$7.3 million during a three-month period in June 2014.

International banking

“This issue will surely be raised at the G20 summit,” predicted Tomasz Kozlowski, Ambassador of the European Union (EU) to India. “We need to strengthen international cooperation for exchange of tax information between tax authorities”.

Panama, Vanuatu and Lebanon may find themselves on a list of uncooperative tax havens that the Organisation for Economic Co-operation and Development (OECD) re-activated in July 2016 at the request of G20 nations, warned Le Monde, a French newspaper that participated in the investigation. Those three countries followed none of the OECD’s three broad guidelines for international banking cooperation:

  • information exchange on request
  • a signed multilateral agreement on information standards
  • a commitment to implement automated information exchange in 2017 or 2018

The OECD, the G20, or the European Union could also institute another list for countries that are inadequate in more than one area. Countries meeting none of these criteria, such as Panama, Vanuatu and Lebanon, would go on the blacklist. Countries that meet only one criterion would go on the greylist. In April 2016, if this greylist had been in place it would have included nine countries: Antigua and BarbudaBahrainBruneiDominicaLiberiaNauruSamoaTobago and the United Arab Emirates.

People named

While offshore business entities are not illegal in the jurisdictions where they are registered, and often not illegal at all, reporters found that some Mossack Fonseca shell corporations seem to have been used for illegal purposes including fraudkleptocracytax evasion and evading international sanctions.

Reports from April 3 note the law firm’s many connections to high-ranking political figures and their relatives, as well as celebrities and business figures. Among other things, the leaked documents illustrate how wealthy individuals, including public officials, can keep personal financial information private.

Initial reports identified five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates as well as government officials, close relatives, and close associates of various heads of government of more than forty other countries. Names of then-current national leaders in the documents include President Khalifa bin Zayed Al Nahyan of the United Arab Emirates, Petro Poroshenko of Ukraine, King Salman of Saudi Arabia, and the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson.

Former heads of state mentioned in the papers include:

  • Argentinian president Mauricio Macri who was president from December 2015–December 2019. Moreover, the moral problem, the oppositers reclaimed illegality because he never put this in his patrimonial declarations. For one of the official source of Panama papers: “Macri’s official spokesman Ivan Pavlovsky said that the Argentine president didn’t list Fleg Trading Ltd. as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. “This is why Maricio Macri was occasionally its director,” he said, reiterating that Macri was not a shareholder.” 
  • Sudanese president Ahmed al-Mirghani, who was president from 1986–1989 and died in 2008.
  • Former Emir of Qatar Hamad bin Khalifa Al Thani owned Afrodille S.A., which had a bank account in Luxembourg and shares in two South African companies. Al Thani also held a majority of the shares in Rienne S.A. and Yalis S.A., holding a term deposit with the Bank of China in Luxembourg. A relative owned 25 percent of these: Sheikh Hamad bin Jassim Al Thani, Qatar’s former prime minister and foreign minister.

Former prime ministers:

  • Prime Minister Bidzina Ivanishvili of Georgia
  • Pavlo Lazarenko of Ukraine
  • Prime Minister Ayad Allawi, a former vice president of Iraq, owned property through Mossack Fonseca shell companies registered in Panama and the British Virgin Islands, for security reasons following an assassination attempt, according to his spokesperson, who added that any income from the properties was reported and taxes paid “promptly and on time.”
  • Ion Sturza of Moldova.
  • Ali Abu al-Ragheb of Jordan.

The leaked files identified 61 family members and associates of prime ministers, presidents and kings, including:

Other clients included less-senior government officials and their close relatives and associates, from over forty countries.

Over £10 million of cash from the sale of the gold stolen in the 1983 Brink’s-Mat robbery was laundered, first unwittingly and later with the complicity of Mossack Fonseca, through a Panamanian company, Feberion Inc. The company was set up on behalf of an unnamed client twelve months after the robbery. The Brinks money was put through Feberion and other front companies, through banks in Switzerland, Liechtenstein, Jersey, and the Isle of Man. It issued bearer shares only. Two nominee directors from Sark were appointed to Feberion by Jersey-based offshore specialist Centre Services. The offshore firms recycled the funds through land and property transactions in the United Kingdom. Although the Metropolitan Police Service raided the offices of Centre Services in late 1986 in cooperation with Jersey authorities, and seized papers and two Feberion bearer shares, it wasn’t until 1995 that Brink’s-Mat’s solicitors were finally able to take control of Feberion and the assets.

April 2016

The world responded

Within days of publication, protesters hit the streets, politicians resigned, police raided offices and prosecutors launched investigations.

The impact didn’t stop after the initial uproar.

Investigations were sparked in more than 82 countries.

The Case:

The Panama Papers case (officially titled Imran Ahmed Khan Niazi v. Mian Muhammad Nawaz Sharif), or the Panamagate case, was a landmark decision by the Supreme Court of Pakistan that disqualified incumbent Prime Minister of Pakistan Nawaz Sharif from holding public office for life.

Opposition politicians Imran Khan and Sheikh Rasheed petitioned the court in the aftermath of the Panama Papers leak, which uncovered links between the Sharif family and eight offshore companies. The Court initially ordered the formation of a joint investigation team (JIT) to inquire into allegations of money launderingcorruption, and contradictory statements by Sharif and his relations in a 3–2 split decision on 20 April 2017, with the dissenting judges ruling that Sharif be disqualified. After the JIT submitted its report and subsequent arguments were heard, the Court disqualified Sharif from holding public office by unanimous verdict.

The case has been described as the most publicized in Pakistan’s history, as well as a “defining moment” for the country.

Background

Panama Papers leak case

On April 3rd, 2016 the International Consortium of Investigative Journalists (ICIJ) made 11.5 million secret documents, later known as the Panama Papers, available to the public. The documents, sourced from Panamanian law firm Mossack Fonseca, among other revelations about other public figures in many other countries, included details of eight offshore companies with links to the family of Nawaz Sharif, the then-incumbent Prime Minister of Pakistan, and his brother Shehbaz Sharif, the incumbent Chief Minister of Punjab. According to the ICIJ, Sharif’s children Maryam NawazHassan Nawaz and Hussain Nawaz “were owners or had the right to authorise transactions for several companies”. Mossack Fonseca records tied the children to four offshore companies, Nescoll Limited, Nielson Holdings Limited, Coomber Group Inc., and Hangon Property Holdings Limited. The companies acquired luxury real estate in London from 2006 to 2007. The real estate was collateral for loans of up to $13.8 million, according to the leaked Panama Papers.

Failure to form judicial commission

Facing growing criticism, Sharif announced the formation of a judicial commission under a retired judge of the Supreme Court of Pakistan, in a nationwide address on April 5th, 2016. However, former justices Tassaduq Hussain JillaniNasir-ul-MulkAmir-ul-Mulk Mengal, Sahir Ali, and Tanvir Ahmad Khan all refused to participate and no commission was formed. The federal government remained committed to forming a commission, negotiating its terms of reference with opposition parties Pakistan People’s Party and Pakistan Tehreek-e-Insaf. In a second address on 22 April 2016, Sharif announced he would resign if proven guilty. The latter effort failed when Chief Justice of Pakistan Anwar Zaheer Jamali, cited broad, open-ended terms of reference and the limited scope of the law in this area, and declined to form “a toothless commission, which will serve no useful purpose.”

Prime Minister’s speech

In a televised address to the National Assembly of Pakistan on May 16th 2016, Sharif suggested forming a joint committee to draft the terms of reference for establishing a judicial commission. He said he was not afraid of accountability, while criticizing opposition figures: “Today, people living in bungalows and commuting in helicopters are accusing me of misconduct. Can they explain before the nation as to how they earned all this money and how much tax they paid?” In his speech, Sharif said he would clear the air about the London flats, but did not return to the subject. He reiterated that the flats had been purchased with money earned from the sale of Jeddah Steel Mills, which had belonged to his father. Later, Sharif omitted any reference to his family’s business connections with the Qatari royal family during his 16 May speech, inviting allegations of contradictory statements.

Opposition response

Following Sharif’s speech, PTI chairman Imran Khan filed a petition through counsel Naeem Bokhari with the Supreme Court of Pakistan on 29 August 2016, seeking Sharif’s disqualification as prime minister and as a member of the National Assembly of Pakistan. Other political leaders including Sheikh Rashid Ahmed of Awami Muslim League, and Siraj-ul-Haq of Jamat-e-Islami, also expressed support for the petition. It targeted Sharif’s children, his son-in-law Muhammad Safdar, and his brother-in-law and the incumbent finance minister Ishaq Dar as well. PTI workers staged a sit-in outside Sharif’s private residence at Raiwind near Lahore on 30 September 2016. Khan subsequently called on supporters to “lock-down” Islamabad until Nawaz Sharif “resigned or presented himself for accountability”.

Supreme Court of Pakistan

Initial hearings

The court’s initial five-member bench for hearing the case was headed by Chief Justice Jamali and comprised Justices Asif Saeed Khan Khosa, Amir Hani Muslim, Sh. Azmat Saeed, and Ijaz-ul-Ahsan. The hearings began 1 November 2016. PTI leader Imran Khan was represented by Bokhari and Hamid Khan. Legal counsel for Sharif and his children were senior lawyers Salman Aslam Butt and Akram Sheikh. The court also accepted additional petitions filed by other opposition figures, including Jamaat-e-Islami leader Siraj-ul-Haq and Sheikh Rashid Ahmad. In their reply, Sharif lawyers Butt and Shoaib Rashid informed the bench that though they owned properties abroad, Hassan and Hussain Nawaz had been running a business lawfully for decades, that Maryam Nawaz was not dependent on her father, nor was she the beneficial owner of the cited offshore companies, Nielsen and Nescoll, but a trustee. Justice Khosa required counsel to satisfy the bench that the money had been lawfully earned and transferred. The court also questioned the quality of PTI’s evidence, with Justice Saeed remarking that newspaper clippings were only good for “selling pakoras” the day after publication.

Qatari letter

On 14 November 2016, Sharif lawyer Sheikh dramatically produced a letter written by Hamad bin Jassim bin Jaber Al Thani, the Prime Minister of Qatar from 2007 to 2013. The letter, marked private and confidential, read:

[My father Jassim] had longstanding business relations with (Sharif’s father) Mian Mohammad Sharif which were coordinated through my eldest brother… Mian Sharif expressed his desire to invest a certain amount of money in the real estate business of Al Thani family in Qatar. I understood at that time, that an aggregate sum of around Dirhams 12 million was contributed by Mian Sharif, originating from the sale of business in Dubai (for four flats: 16, 16A, 17 and 17A Avenfield House, Park Lane, London, registered under the ownership of two offshore companies, while their bearer share certificates were kept in Qatar). These were purchased from the proceeds of the real estate business… I can recall that during his lifetime, Mian Sharif wished that the beneficiary of his investment and returns in the real estate business [should be] his grandson Hussain Nawaz Sharif.

Justice Khosa observed that the document had “completely changed the public stand of the Prime Minister.” When asked why Sharif had not mentioned the Qatari letter in his 16 May speech, Butt replied, ‘Those were not legal testimonials, rather mere political statements.” Expressing inability to furnish a “40-year-old” money trail, Butt explained that business families at the time conducted transactions over parchis, slips of paper. A second letter written by Al Thani was produced on 26 January 2017, clarifying that the “investment was made by way of provision of cash which was common practice in the Gulf region at the time of the investment. It was also, given the longstanding relationship between my father and Mr. Sharif, a customary way for them to do business between themselves.”

Fresh hearings

Following the superannuation and retirement of Chief Justice Jamali in December, a new bench headed by Justice Khosa was formed to hear the case afresh. The bench retained justices Sh. Azmat Saeed and Ijaz-ul-Ahsan, and included justices Ejaz Afzal Khan and Gulzar Ahmed. The Sharif family also reshuffled its legal team: Butt and Sheikh were replaced with Makhdoom Ali KhanShahid Hamid, and Salman Akram Raja. The move came following widespread criticism over the team’s handling of the case, and the Qatari letter’s introduction. On the petitioners’ side, lead counsel Hamid Khan too recused himself from arguing the case, claiming, “I can contest a case in the court, but am unable to indulge in a media war” after media reports surfaced that the party was unsatisfied with his performance. Fresh hearings resumed on 4 January 2017 with the reconstituted bench, new defence counsel, and a truncated petitioner’s side.

Petitioner’s case

The PTI’s case was relitigated entirely by Bokhari, alongside Maleeka Bokhari and Akbar Hussain. Bokhari referred to interviews with different members of the Sharif family, highlighting that each gave differing versions of the ownership structure of the London properties. He argued that the Sharif family had failed to present any record regarding banking transactions, or refer to trust deeds or the Qatari connection earlier. He maintained that Maryam Nawaz had declared her taxable income as zero in tax returns, and remained a dependent on her father. He added that Hussain Nawaz had given Rs. 810 million to his father, without any of it being taxed.

Bokhari also highlighted the National Accountability Bureau‘s failure to pursue its own reference filed against Hudaibiya Paper Mills in 2000, implicating the Sharif family and Ishaq Dar in money laundering in late 1990s.

Defence case

Sharif’s lawyer Makhdoom Ali Khan, appeared as lead counsel, assisted by Saad Hashmi and Sarmad Hani. Makhdoom quoted the court’s own decision on Article 62 (1)F of the Constitution, under which the petitioners sought Sharif’s disqualification, as “a nightmare of interpretations and feast of obscurities.” Makhdoom distinguished the case from that of Yusuf Raza Gilani, who was disqualified as prime minister in 2012 for contempt of court. Dismissing the Gilani precedent, Makhdoom argued, “My Lords you need to look at the background and understand the context of this judgment.” Regarding Maryam Nawaz’s dependence status, Makdhoom maintained she was listed as the prime minister’s dependent on tax forms because there was no other column on the sheet.

To illustrate that it was not difficult to transport 12 million dirhams in cash, Hassan and Hussain Nawaz’s counsel Salman Akram Raja placed the novels War and Peace and The Brothers Karamazov on top of each other, demonstrating that the thickness of both books, amounting to over 3,000 pages, would be the same as two million dirhams in cash.

FBR and NAB

Throughout the case, the court questioned the non-functioning of state institutions in pursuing the Panama affair. Muhammad Irshad, Chairman of the Federal Board of Revenue informed the court that notices had been issued to 343 individuals following the Panama Papers leaks, and that Hassan, Hussain and Maryam Nawaz had responded to the notices. FBR lawyer Mohammad Waqar Rana said that no immediate steps had been taken in pursuance of the Panama scandal, arguing that separate laws and institutions were available for money laundering cases. “So in other words, what you are saying is that the FBR did not take any steps regarding money laundering?” Justice Gulzar observed. The FBR failed to satisfy the court over actions taken. “Thank you very much for not assisting the court,” Justice Khosa admonished the FBR side.

The NAB (National Accountability Bureau) was represented by Chairman Qamar Zaman Chaudhry and Prosecutor General Waqas Qadeer Dar. During their submissions, the case shifted focus to the Hudaibiya criminal reference filed by NAB earlier. The reference was based on a confession by Ishaq Dar in 2000, admitting to laundering $14.86 million for the Sharif family. Dar had been placed under house arrest at the time by the military regime of Pervez Musharraf, and maintained the confession had been acquired under duress. The case was quashed by the Lahore High Court in 2014, when Dar was finance minister. “There are reservations regarding NAB’s failure to register an appeal,” the bench remarked. “When a criminal gets bail in a case of petty theft, NAB registers an appeal. This is a case worth millions and no appeal was registered,” Justice Khosa observed. Chaudhry restated his decision not to register an appeal. Justice Saeed warned the NAB team to “be prepared to face serious consequences.”

Attorney-General’s submissions

The Attorney-General for PakistanAshtar Ausaf Ali, was put on notice to assist the Court on 22 February 2017. Ausaf, with Asad Rahim Khan, Salaar Khan, and Shahzaib Khan submitted that anyone could file an appeal against the Lahore High Court’s decision in the Hudaibiya reference, let alone NAB. Justice Saeed commented that NAB had “died in front of us yesterday”. Ausaf further submitted that the prime minister did not have immunity in Code of Criminal Procedure cases under the Constitution. Ausaf was warned “not to become a party to the case” but assist the court.

Final submissions

Following Bokhari’s rebuttal to the defence case, the petitioners appeared before the bench on 23 February 2017, including Imran Khan, Siraj-ul-Haq, and Sheikh Rashid Ahmad. The Court reserved its judgment on that day.

Verdict

The verdict in the case was announced at 2:00 p.m. PST on 20 April 2017. The Supreme Court in a 3–2 decision ruled that there was insufficient evidence to order Sharif’s removal from office, but ordered further investigation into corruption allegations. The court ordered the formation of a Joint Investigation Team (JIT) under a three-member special bench, which was later known as the JIT implementation bench. The two dissenting judges on the bench, Justice Asif Saeed Khosa and Justice Gulzar Ahmed, were of the opinion that Sharif had not been honest to the nation and should be disqualified from office.The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed.

The Panama Case JIT had powers to investigate all respondents and related parties, including the prime minister, and was ordered to complete its investigation within 60 days and present its findings to the Supreme Court every 15 days.

The detailed, 540-page verdict in the case was released on April 20, 2017. It was primarily authored by Justice Ejaz Afzal Khan and was noted for its harsh criticism of state investigative institutions, NAB and the FIA, as well as the government for their handling of the Panama Papers leaks. It chastised the defendants for not being ‘completely honest with the court’.

Scope of investigation

The scope of the JIT’s investigation included the following ten points, as outlined by the Special Bench of the Supreme Court:

  1. How did Gulf Steel come into being?
    1. What led to its sale?
    2. What happened to its liabilities?
    3. Where did its sale proceeds end up?
    4. How did they reach Jeddah, Qatar, and the UK?
  2. Whether respondent numbers 7 and 8 (Hussain and Hassan Nawaz Sharif), in view of their tender ages, had the means in the early nineties to possess and purchase the London flats?
  3. Whether the sudden appearance of al-Thani’s letter is a myth or reality?
  4. How bearer shares crystallized into the flats?
  5. Who, in fact, is the real and beneficial owner of Nescoll Limited and Nielsen Enterprises.
  6. How did Hill Metals Establishment come into existence?
  7. Where did the money for Flagship Investment Limited and other companies set up/taken over by respondent number 8 (Hassan Nawaz Sharif) come from?
    1. Where did the working capital for such companies come from?
  8. Where do the large sums, running into millions (Rs. 810 million), gifted by respondent number 7 (Hussain Nawaz Sharif) to respondent number 1 (Nawaz Sharif) drop in from?

JIT report and recommendations

Despite controversies, On 10 July 2017, JIT submitted a 275-page report in the apex court. The report requested NAB to file a reference against Sharif, his daughter Maryam, and his sons under section 9 of National Accountability Ordinance. JIT found that Sharif, his sons and his daughter Maryam Nawaz could not justify their income and assets, adding that Maryam Nawaz had been proved the beneficial owner of Nielsen and Nescoll. The report further stated that Maryam was involved in falsifying evidence before the Supreme Court. The basis for this was the use of the Calibri font, first released to the public in January 2007, in documents said to be from 2006. Among other critical findings was the discovery of an offshore company, FZE Capital, managed by Nawaz Sharif until 2014, and the complete lack of supporting record in the United Arab Emirates related to the sale of Gulf Steel Mill, important to the case as it formed the basis of the ‘Qatari letter’ money trail.

Final verdict

Following the JIT report to the court on 10 July 2017, the Supreme Court began to hear arguments a week later. On 21 July 2017, the court concluded the hearings and reserved its judgement. On 28 July 2017, the court announced its unanimous decision and disqualified the Prime Minister from holding public office, finding that he had been dishonest in not disclosing his employment in the Dubai-based Capital FZE company in his nomination papers. The court also ordered National Accountability Bureau to file a reference against Sharif, his family and his former Finance Minister Ishaq Dar, corruption charges.

After the verdict

Following the verdict, Nawaz Sharif was disqualified from serving as Prime Minister, and also as leader of the National Assembly. The NAB was ordered by the court to investigate corruption charges against Sharif, his three children and his son-in-law. Sharif was subsequently barred from public office for life, after the Supreme Court held in Sami Ullah Baloch v. Abdul Karim Nousherwani that electoral disqualification under Article 62(1)(f) would continue in perpetuity.

In response to the apex court’s recommendation, NAB filed three references against the former Prime Minister. They pertained to Avenfield flats in London, Flagship Investment offshore company, and the former Al-Azizia Steel Mill respectively. The case would now proceed in an accountability court of the Islamabad circuit, under Judge Muhammad Bashir.

On 6 July 2018, the court sentenced Nawaz Sharif to 10 years imprisonment in the Avenfield reference. The sentence extended to his daughter Maryum Nawaz, and Son-in-Law Retired Captain Safdar, who were given 7 years and 1 year imprisonment respectively. Sharif and his family appealed against the verdict in the Islamabad High Court.

In September 2018, Islamabad High Court suspended the verdict as, according to the presiding judge, Athar Minallah, NAB “was unable to prove a financial link between the former prime minister and the apartments in question”.

On 24 December 2018, Sharif was acquitted by the accountability court in the Flagship Investment case due to dearth of evidence. He was, however, sentenced to 7 years imprisonment and fined Rs. 5 billion in the Al-Azizia Steel Mill case.

On 25 March 2019, Nawaz Sharif was granted a 6-week bail on medical grounds by the Supreme Court with the condition that any medical treatment he receives must be from within Pakistan. 4 weeks later, on 25 April 2019, Sharif filed a review petition in the apex court, pleading to grant him “permanent bail” on the basis of a fresh medical report that stated he suffers from “acute anxiety and depression that will lead to sudden death”. He also requested the court to allow him to go abroad for medical treatment. Both requests were turned down, and Nawaz was put back in jail on May 7th.Meanwhile, his appeal against the Al-Azizia sentencing remains subjudice in the Islamabad High Court.

March 2018

New rules force corporate transparency

In Indonesia, the government decreed that all companies must reveal their true owners. The country was one of a number that introduced new rules to combat corruption and other illicit activities.

“One of the enduring benefits of the Panama Papers is that we now have the laws, and we have the government buy-in and commitment to support us.”

Chris Jordan, Australian Tax Office

Resources:

en.wikipedia.org, ” Panama Papers,” By Wikipedia editors; icij.org, “What happened after the Panama Papers?” By Amy Wilson-ChapmanAntonio Cucho and Will Fitzgibbon; cnn.com, “The Panama Papers: 7 things to know,” By  Charles Riley, Laura Perez Maestro, Euan McKirdy, Elizabeth Gonzalez and Alla Eshchenko;

Addendum:

The Panama Papers: 7 things to know:

What are the Panama Papers?

ICIJ and an international coalition of media outlets investigated the trove of papers, which allegedly reveal a clandestine network involving associates of Russian President Vladimir Putin, and business ties between a member of FIFA’s ethics committee and men whom the United States has indicted for corruption.

Why are they called the Panama Papers?

The more-than 11 million documents, which date back four decades, are allegedly connected to Panama law firm Mossack Fonseca. ICIJ reports that the firm helped establish secret shell companies and offshore accounts for global power players. ICIJ reports that a 2015 audit found that Mossack Fonseca knew the identities of the real owners of just 204 of 14,086 companies it had incorporated in Seychelles, an Indian Ocean archipelago often described as a tax haven. And as Gerard Ryle, the director of ICIJ, told CNN’s Christiane Amanpour: “These documents, if nothing else, raise an awful lot of questions.”

Who is mentioned in the documents?

The documents reference 12 current or former world leaders, as well as 128 other politicians and public officials. In addition to allegations involving associates of Putin — the Russian leader isn’t himself mentioned by name in any of the documents — and FIFA, the papers also accuse the prime minister of Iceland, Sigmundur David Gunnlaugsson, of having ties, through his wife, to an offshore company that were not properly disclosed, while Argentina’s President Mauricio Macri is alleged to have failed to disclose links to a company in his asset declarations.

How have the accused responded to the Panama Papers?

The Kremlin has dismissed the allegations as “a series of fibs” aimed at discrediting Putin ahead of elections.A statement from the Icelandic prime minister’s office said the offshore firm he’s linked to was a holding company for his wife’s assets, enjoyed no tax advantages and was created to avoid conflicts of interest in Iceland, while a spokesperson for Argentina’s Macri said the president had never owned a stake in the firm he was linked to.However, Britain, France, Australia and Mexico have vowed investigations for possible tax evasion.FIFA’s ethics committee said it has launched a preliminary investigation into one of its members, Uruguayan lawyer Juan Pedro Damiani, who is alleged to have had dealings with companies linked to a former FIFA official, Eugenio Figueredo, and two other men who are all under investigation for corruption.”Our firm did not maintain any business relationship or conduct business with or for Mr. Eugenio Figueredo, nor for any of the other people mentioned in the newspaper article,” the legal firm J.P. Damiani said in a statement to CNN.

What is Mossack Fonseca saying?

On Monday, the firm released a statement:”Our industry is not particularly well understood by the public, and unfortunately this series of articles will only serve to deepen that confusion. The facts are these: while we may have been the victim of a data breach, nothing we’ve seen in this illegally obtained cache of documents suggests we’ve done anything illegal, and that’s very much in keeping with the global reputation we’ve built over the past 40 years of doing business the right way, right here in Panama.”Obviously, no one likes to have their property stolen, and we intend to do whatever we can to ensure the guilty parties are brought to justice.

“But in the meantime, our plan is to continue to serve our clients, stand behind our people, and support the local communities in which we have the privilege to work all over the world, just as we’ve done for nearly four decades.”Firm co-founder Ramon Fonseca Mora told CNN earlier that the information published is false and full of inaccuracies and that parties “in many of the circumstances” cited by the ICIJ “are not and have never been clients of Mossack Fonseca.” The firm provided longer statements to ICIJ.

How did ICIJ get the documents?

An anonymous source gave the documents to Germany’s Suddeutsche Zeitung and the newspaper shared them with ICIJ. Other media organizations that reported on the documents include the BBCThe Guardian and McClatchy.The anonymous source “claimed to be concerned about what he or she saw in the documents. Of course, the documents started as a trickle but turned into a flood, a torrent in the end,” says Ryle.”The person claimed that their life was in danger if they ever became known as the source of this material because of course there are so many powerful people that are being revealed here.”CNN is unable to independently verify the reports and is seeking comment from the most prominent figures mentioned. They are spread across Europe, Asia, the Middle East, Africa and the Americas.

What are the consequences of this leak?

Ryle says the biggest consequence of the leak is the massive blow to secrecy — the biggest selling point of offshore tax havens.”The offshore world really only has one product and that is secrecy and when you take away that product they don’t have anything for sale.”For years and years they’ve been getting away with this secrecy and we’re also seeing in the documents that every time the governments and the authorities try to crack down, they’re finding new ways to get around those obstacles or barriers.”

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