BOFIT Weekly Review 2016/14
China and Russia see Panama Papers as Western attempt to destabilise their political systems
The unprecedentedly large data leak on offshore companies released last week by the International Consortium of Investigative Journalists (ICIJ) revealed that people close to the Chinese and Russian presidents had used the services of a Panamanian law firm to set up firms in tax heavens. The Chinese government has tried to censor news and discussion concerning the involvement of China’s leadership. The Global Times, which serves an international readership, suggested that the leaks were part of a Western disinformation campaign, noting that Western elites have gone largely unscathed. The paper highlighted suspicions concerning president Putin’s inner circle, but did not mention suspicions on China’s leadership. The Kremlin’s press officer said the leak was an attempt to destabilise Russia before upcoming parliamentary elections.
The Panama Papers story has received considerable attention in the West. While setting up an offshore corporation in a tax haven is not illegal per se, it may be used to avoid taxes or hide illegally obtained assets and bribes.