Who will bell the cat?

It is hardly likely to take the Danish route to investigate the ‘who’ and the ‘how’ of the Panama scandal

Denmark has become the first country in the world to apparently buy data from the Panama Papers leak, and now plans to investigate whether 500-600 Danes who feature in the offshore archive may have evaded tax. According to a report by Luke Harding in The Guardian ("Panama Papers: Denmark buys leaked data to use in tax evasion inquiries" -- September 7), Denmark will pay up to DKK9m (£1m) for the information, which comes from the Panamanian law firm Mossack Fonseca. An anonymous source is said to have approached the Danish government over the summer.

The source, the report said, sent over an initial sample of documents and the government reviewed them. After concluding they were genuine, it secretly negotiated support for the controversial deal from political parties in parliament.

Going by how our government has played with the case since Panama Papers were leaked in April this year, it is hardly likely to take the Danish route to investigate the ‘who’ and the ‘how’ of the scandal. In any case, considering the government’s reluctance even to discuss the matter in parliament, it is again hardly likely the so-called ‘John Doe’ would approach it for a deal. But no need to give up hope. The other day former finance minister Dr Salman Shah, speaking at a seminar "Challenges to Democracy' organised by Trust for Democratic Education and Accountability mentioned a far more effective and perhaps relatively more economical way of getting to the bottom of the scandal. The Stolen Asset Recovery (StAR) initiative launched in 2005 jointly by the UN Office on Drugs and Crime (UNODC) and the World Bank Group in response to the serious problem of theft of public assets from developing countries is available for the asking, he said.

The cross-border flow of global proceeds from criminal activities, corruption and tax evasion is estimated at between $1 trillion and $1.6 trillion per year. Corrupt money associated with bribes received by public officials from developing countries is estimated at $20 billion to $40 billion per year — a figure equivalent to 20 to 40 per cent of flows of official development assistance (ODA). These estimates, while imprecise, give an idea of the large magnitude of the problem and the need for concerted action to address it. Indeed, the coming into force in 2005 of the landmark UN Convention Against Corruption (UNCAC), which devotes a chapter to asset recovery, signals the growing global consensus for urgent action. Stolen assets are often hidden in the financial centres of developed countries; bribes to public officials from developing countries often originate from multinational corporations; and the intermediary services provided by lawyers, accountants and company formation agents, which could be used to launder or hide the proceeds of asset theft by developing country rulers, are often located in developed country financial centres.

Jurisdictions where stolen assets are hidden, often developed countries, may not be responsive to requests for legal assistance. The international legal framework underpinning StAR is provided by the UNCAC, the first global anticorruption agreement, which entered into force in December 2005. The UNODC is both the custodian and the lead agency supporting the implementation of UNCAC, as well as the secretariat to the Conference of State Parties. A fundamental premise of the StAR Action Plan is that a successful effort on stolen asset recovery calls for global action. Examples of proposed actions include: implementation of UNCAC, including developing and strengthening partnerships with multilateral and bilateral agencies in pursuit of this effort and developing a pilot programme aimed at helping countries recover the stock of stolen assets by providing the needed legal and technical assistance. This could include help on filing a request for mutual legal assistance and advice of experts. At the 2007 IMF-World Bank Spring Meetings, during a side event introducing the StAR Initiative, representatives of developed and developing countries and multilateral development banks expressed strong support for the Initiative. The consensus was that StAR is an idea whose time has come and that every country or international agency must do its part to make it succeed. In this sense, StAR was described as the “missing link” in an effective anti-corruption effort. But the big question is: who will file the request on Pakistan’s behalf? "Judiciary," asserts Dr Salman Shah. 

Published in The Express Tribune, September 10^th, 2016.

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