Why the controversial Pandora Papers will be important to bankers and tax dodgers

What is the Pandora Papers?

The financial records, which contain details of 8,500 bank accounts in more than 250 overseas jurisdictions, were leaked in 2017 to a French investigative website, Tax Refuge Watch. It was initially reported that the information involved 830 “complex” offshore accounts and 38 “intake/flow” accounts, which were designed to hide ownership by bypassing address changes. The Financial Action Task Force has since clarified that the vast majority of the names involved are not fictitious, that the accounts are set up to hide assets from tax authorities and that few of them were considered suspect by jurisdictions involved.

So why haven’t countries been able to track down the money?

There are several potential explanations. For example, some of the details contained in the accounts were probably wrong or false. This means it would be difficult to confirm their ownership or face the threat of court action by parties who claim the identities are false. There may also be a conspiracy theory element.

Why have we not seen much action?

In some cases, governments said the leaked records lacked legal significance. Other governments were reluctant to pursue activities deemed to be largely legal – such as buying used goods from third parties or investing in foreign countries – when their citizens were being prosecuted on legal charges for money laundering or other illicit activities.

Why do we care?

The revelations have triggered concerns about how individuals and companies are able to avoid paying tax. In addition, it raises awareness about tax evasion schemes. Among the disclosures is a Swiss bank account held by Tony Blair, the former prime minister.

• John Crace is the Guardian’s economics editor

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