On Sunday, April 3rd 11.5 million documents were leaked from the Panamanian law firm, Mossack Fonseca. With 2.6 terabytes of data included, this is the largest data leak the internet has ever seen. Events of the past, inclusive of the Wikileaks incident of 2010, pale in comparison to these documents which have been dubbed the “Panama Papers.”

What are the Panama Papers?

The Panama Papers are a series of documents which include offshore entities, financial records and correspondence stretching back 40 years to date. The 214,000 offshore entities across more than 200 countries were the main topic of interest, as these accounts are commonly used as tax havens for corruption. They found that most of the offshore accounts were used to hide income and transactions worth billions of dollars. Of course, this couldn’t have been done alone, as the law firm worked with more than 500 top banks, worldwide, through the process.

The Panama Tax Haven

Tax havens are countries or independent areas where taxes are levied at a low rate. More bluntly, this is how the rich and powerful hide their wealth. Panama, specifically, has passed laws in favor of corporate and individual financial secrecy. With no tax treaties and no exchange controls in place, Panama is allowed to prohibit financial institutions from releasing information about offshore accounts or account holders.

Who was named?

The documents included the names of 12 current and former world leaders and 128 politicians and public officials. Those accused included associates of Russian Leader, Vladimir Putin. They also mentioned the Prime Minister of Iceland, the President of Ukraine, the Prime Minister of Pakistan, Argentina’s President and a long list consisting of many more powerful leaders and public figures. Among them, the President of FIFA, Gianni Infantino, was found to have signed documents connected to these offshore accounts.

What are the consequences?

Aside from the negative reputation that those named in the papers may now possess, it is important to note that the papers do not necessarily document any illegal activity. Holding money with an offshore company is not against the law, but it could be used to mask tax evasion or money laundering. With every new leak, the secrecy of tax havens and these offshore accounts is starting to crumble, slowly breaking down the only thing they have to offer: secrecy.