Australian and foreign-owned companies who are laughing all the way to the bank

QANTAS AIRWAYS LIMITED with an income of $14.90 billion stated it had no taxable income in in 2013-14 so paid no tax. Hmmmm…..

ENERGYAUSTRALIA HOLDINGS LTD earning 8.84 billion and EXXONMOBIL AUSTRALIA PTY LTD bringing in $9.94 billion in that same financial year also had no tax to pay.

News Corp’s APN NEWS & MEDIA (owner of most of the regional newspapers in Northern NSW ) with a taxable income of $21.29 million in 2013-14 also paid no tax.

They are among the hundreds of Australian and foreign-owned companies with incomes of over $100 million a year which the Australian Tax Office (ATO) lists as paying no tax.

ATO Corporate Tax Transparency - 2013-14 Report of Entity Tax Information

Corporate tax transparency – further contextual background

Oxfam calls on major parties to address the fact that multinational tax dodging is costing Australia billions

Medianet Release
Multinational tax dodging costs us billions Nearly $AU9 billion that could be spent on schools, hospitals and critical infrastructure in Australia and in poor countries is instead being hidden by Australian-based multinationals in tax havens, according to an Oxfam report released today. According to The Hidden Billions – How tax havens impact lives at home and abroad, and based on the latest available data, tax haven use by Australian-based multinationals cost Australia around USD $5 billion (AUD $6 billion) in lost tax revenue annually, and cost developing countries an estimated USD $2.3 billion (AUD $2.8 billion) every year. The report is being launched with an online poll that shows 90 per cent of Australians polled think the Government should do more to stop multinational corporations avoiding paying tax in Australia and in every country in which they operate. Oxfam Australia Chief Executive Dr Helen Szoke said the report showed how much the public lose out when big companies do the wrong thing and governments don't step in and stop them. "The Oxfam report, for the first time, puts dollar figures on what Australians and poor people in our region are missing out on because Australian-based multinational companies aren't paying their fair share of tax like the rest of us," Dr Szoke said. The Oxfam-commissioned poll also found: ·         60 per cent of Australians polled believe the main thing the Federal Government should do to raise revenue is crackdown on tax avoidance by multinationals; ·         90 per cent of Australians polled believe the Federal Government should legislate to prevent all multinationals operating in this country from moving their profits to tax havens to avoid paying tax here; ·         87 per cent think that those Australian companies who operate in developing countries and in Australia should publicly report their earnings and how much tax they pay everywhere. Globally, tax-dodging is rampant in developing countries, with big companies ripping USD $172 billion (AUD $209 billion) of tax revenue out of their economies in 2014, money that could have been used to fight poverty and generate equality and prosperity. Dr Szoke also said The Hidden Billions report found that use of tax havens overseas by big businesses based in Australia would cost developing countries USD $4.1 billion (AUD $5.6 billion) in desperately needed revenue for essential public services over the next five years, including many of Australia's poorest neighbours. "Over the next five years, it's estimated that Indonesia will be deprived of around USD $360 million (AUD $493 million) that could have gone towards education, and PNG stands to lose around USD $17 million (AUD $23 million) in expenditure on essential services such as hospitals, schools and sanitation," Dr Szoke said. "This is shocking, given in PNG, 60 per cent of the population don't have access to clean water. "In Ghana, funding lost due to the use of tax havens by Australian-based multinationals could pay for an estimated additional 1,400 primary school teachers, and nearly 600 nurses, a year.  In The Philippines, an estimated 1,700 new classrooms per year could be built. "It doesn't have to be this way. Australia should show that it's tackling this issue by making the tax affairs of Australian-based multinationals public – not only for their operations in Australia, but for every country in which they operate. "Our research relies on IMF data, which shows the flow of money from Australian-based multinationals.  Unfortunately, there is no way to find out which individual companies are dodging tax, as they're not required to publish their tax affairs on a country-by-country basis."  Dr Szoke said this lack of public reporting enabled big companies to hide billions of dollars they should be paying in tax. "Other countries, including the US, France and Canada, have made tax reporting public for high-risk sectors in big business, such as for mining companies and big banks; it's time Australia caught up," she said. Dr Szoke said the report showed that Australia was a major part of this global problem that affected so many lives here and overseas. "With inequality worsening around the world, making the fight against poverty even harder, companies must pay their fair share of taxes, so that the revenue can be used to improve people's lives, both here and for the world's poorest people," Dr Szoke said. Oxfam is calling on all political parties to commit to: ·         Make tax transparent at home and abroad; ·         Curb irresponsible use of tax havens; ·         Make multinational ownership information public; ·         Support developing countries with tax infrastructure, and, ·         Support global action to end tax dodging. Notes to editors: Research Now conducted the online poll of a nationally representative sample of 1009 Australians, from 25-27 May.
	© Australian Associated Press, 2016

Adani threatens to take his bat and ball and go home - half the Australian east coast rushes to open the door

Essential Research poll, commissioned by environmental activists 350.org, The Sydney Morning Herald, 17 December 2015:

The Australian, 4 June 2016:

Indian billionaire Gautam Adani may abandon his proposed $16 billion coalmine in central Queensland if environmentalists continue to delay the project in the courts.

In his first interview with the Australian media, Mr Adani said he was disappointed the “pit to plug’’ project had yet to receive the green light after six years of environmental assessments and court battles.

Mr Adani, who late last year appealed to Malcolm Turnbull to act over the legal activism, said he hoped the court challenges to Australia’s largest proposed coalmine would be finalised early next year.

With one court case yet to be heard in the Federal Court, and at least two groups threatening High Court action, Mr Adani warned he could not wait indefinitely. The self-made billionaire, who plans to export up to 60,000 tonnes a year of Australian coal through the Great Barrier Reef, said he was already scouting alternatives to feed his power stations in India.

“You can’t continue just holding,’’ he said at the headquarters of his $US26 billion ($36bn) energy and infrastructure conglomerate in Ahmedabad, northwest India. “I have been really disappointed that things have got too delayed.’’

Mr Adani confirmed he had met the Prime Minister last December to implore him to deliver greater certainty on projects like his proposed Carmichael mine. It is forecast to deliver thousands of jobs to the economically depressed central Queensland region. “We were suggesting how to bring in the certainty of the timings,’’ he said. “We were asking how we get certainty of the time schedules … that is the most important for us in committing all of our resources.’’

The Carmichael mine, rail and port project promises to open up the untapped Galilee coal province to other mega-mines, including one being planned by Gina Rinehart in a joint venture with another Indian giant, GVK.

Mr Adani’s comments come after the focus of the federal election this week turned to measures to tackle coral bleaching on the Great Barrier Reef and climate change…..

Australian Federal Election 2016: which major political party is likely to put brakes on the petroluem industry's risky commercial ambitions in the Great Australian Bight?

For the second time in less than a year multinational gas and petroleum giant BP plc (British Petroleum) has not met all environmental assessment criteria according to the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA):

BP Developments Australia Pty Ltd (BP), in its capacity as operator of the proposed Great Australian Bight (GAB) Exploration Drilling Program proposes to drill four exploration wells in Commonwealth marine waters in the GAB. Exact well locations are yet to be determined for all wells; however they will be drilled within a defined ‘drilling area’. The drilling area is the previously acquired Ceduna 3D seismic survey area, which covers 12,100 km2 across Exploration Permit for Petroleum (EPP) 37, EPP 38, EPP 39 and EPP 40. BP and Statoil are the registered titleholders of EPPs 37, 38, 39 and 40, with BP being the Operator. The drilling area has water depths ranging between 1,000 and 2,500 m Lowest Astronomical Tide. At the closest point, the drilling area is located approximately 395 km west of Port Lincoln and 340 km southwest of Ceduna in South Australia (SA). The project is scheduled to commence in the summer of 2016-2017, with each well taking between 45 and 170 days to drill. The wells will be drilled using a dynamically positioned semi-submersible mobile offshore drilling unit (MODU). The purpose of the drilling program is to determine whether the target formations have commercially recoverable volumes of hydrocarbons. Additional project details are available on BP’s project website www.bpgabproject.com.au.

National Offshore Petroleum Safety and Environmental Management Authority, 17 May 2016:

On 16 May 2016, NOPSEMA provided BP an opportunity to modify and resubmit their environment plan for exploration drilling in the Great Australian Bight. If BP accepts this opportunity, the modified plan is expected to be resubmitted by 15 July, at which time NOPSEMA will recommence the assessment.

An opportunity to modify and resubmit is a normal part of NOPSEMA’s environment plan assessment process. In fact, NOPSEMA is required by law to provide a titleholder (the company proposing the activity) a reasonable opportunity to modify and resubmit their plan if it doesn’t meet the regulatory requirements for acceptance. NOPSEMA will typically provide two opportunities to modify and resubmit, but is not restricted to providing only two opportunities.

If a titleholder has been given a reasonable opportunity to modify their plan and NOPSEMA determines that it still doesn’t meet the regulatory requirements for acceptance then NOPSEMA will refuse to accept the plan. Since NOPSEMA was established on 1 January 2012, 4% of all environment plans submitted for assessment have been refused.

NOPSEMA has updated the status of the assessment on the Great Australian Bight Exploration Drilling Program submission page. Stakeholders are encouraged to subscribe to the page to receive email alerts of any changes.

For more information about the environment plan assessment process see NOPSEMA’s Assessment process and FAQ pages at nopsema.gov.au.

The Wilderness Society re-released this animated graphic on 17 May 2016:

The oil and gas independent regulator, NOPSEMA, has handed down its decision. It has once again knocked back BP’s environment plan. BP has shown it has learnt nothing from its Gulf of Mexico disaster.

BP now has the opportunity to resubmit its application to drill in the Great Australian Bight as early as July. However, BP still hasn’t released its oil spill modelling, so we released independent modelling which shows some the far-reaching impacts of a potential spill.

https://youtu.be/B5OnMGtx1cQ

An explanation of NOPSEMA’s environmental approval process can be found here.

BP currently owes the United States of America an est. US$7.1 billion in fines and compensation for the environmental damage caused by it Deepwater rig oil spill in the Gulf of Mexico in 2010.

This multinational is not the only oil and gas corporation with exploration permits in the Great Australian Bight - Santos, Chevron and Murphy Australia Oil received exploration permits in 2013-2015 which are current until 2020-2021. Joining Bight Petroleum Pty Ltd in the race to drill and be damned.

Petroluem exploration leases current in 2016

In November 2013 the Abbott Government ordered a review of certain national marine reserves. In effect by establishing this review it sought to block any increase in level of environmental protection afforded the Great Australian Bight when the GAB Commonwealth Marine Reserve was extended to cover 45,926 km2 with a depth range of 15 to 6,000 metres as part of a wider extension of national marine reserves by the former Labor federal government.

At the time of writing unpublished review recommendations have been in the hands of the Turnbull Government since December 2015 and to date mining exploration is still allowed within the waters of these south-west marine reserves at the discretion of the government of the day.

Although the current petroleum leases appear to be adjacent to but outside the boundaries of the GAB Commonwealth Marine Reserve it is clear from the aforementioned major spill modelling that oil/chemical contamination would reach both this reserve and major commercial fishing grounds within the Bight and Bass Strait.

Before casting your vote on 2 July 2016  you might consider this question: Which major political party is likely to put the brakes on these risky commercial ambitions in the Great Australian Bight?

BP plc BACKGROUND AS A SERIAL OFFENDER

Corporate Research Project, accessed 18 May 2016:

Starting about 2000, BP attempted the difficult feat of depicting itself as an environmentally friendly oil company. Some of its initiatives were merely symbolic—adopting a sunburst logo and claiming that its initials now stood for “Beyond Petroleum”—while others were concrete steps, such as (modest) investments in solar power. BP’s campaign was all the more difficult because of its involvement in controversial Alaskan oil and gas production, and because its environmental compliance record was far from unblemished.

For example, in 1990 BP agreed to pay a $2.3 million fine as part of a settlement of an $11 million suit that the U.S. Environmental Protection Agency (EPA) brought against the company in connection with illegal discharges from BP's Marcus Hook refinery into the Delaware River. Several months later the state of California sued the company over a 400,000-gallon spill of crude oil that occurred in February 1990 near Huntington Beach.

In July 1991 BP was one of ten major oil companies the EPA cited for discharging contaminated fluids from service stations into or directly above underground sources of drinking water. BP agreed to pay a fine of $74,000, and to clean up the contaminated water sources by the end of 1993.

In 1992 the EPA charged BP Chemicals with violating hazardous waste laws at its plant in Lima, Ohio, and sought almost $600,000 in penalties.

In 2000 a federal judge imposed a $500,000 criminal fine on BP for failing to report the illegal disposal of hazardous waste on Alaska’s North Slope. The company was also ordered to establish a national environmental management system to prevent future violations. The total cost to the company from this and a related civil matter was said to be more than $20 million.

In 2002 BP was fined £1 million by UK authorities for violating safety regulations in connection with several accidents at a refinery in Grangemouth, Scotland (later sold by BP).

In 2003 California’s South Coast Air Quality Management District filed an omnibus complaint against BP, seeking $319 million in penalties for thousands of air pollution violations over an 8-year period at the company’s refinery in Carson. BP acquired that facility through its purchase of Atlantic Richfield in 2000. The agency later filed another suit against BP for $183 million. In 2005 the parties reached a settlement under which BP agreed to pay $25 million in cash penalties and $6 million in past emissions fees while spending $20 million on environmental improvements at the refinery and $30 million on community programs focused on asthma diagnosis and treatment.

In 2005 BP was accused of trying to cover up deficiencies in the anti-corrosion coating on the 1,000-mile-long Baku-Tbilisi-Ceyhan pipeline that carries oil from Azerbaijan to the Mediterranean. BP is the lead participant in the joint venture that operates the pipeline, the largest shareholder in the consortium that owns it, and the operator of the oil fields that supply it.

In March 2006 more than 250,000 gallons of crude oil spilled at BP’s Prudhoe Bay operations in the Alaskan tundra. Several month later, the company shut down the huge Prudhoe Bay oil field because of additional leakage caused by corrosion in the transit line that carried crude oil to the Trans-Alaska Pipeline. There were press reports that BP had been warned of the problem more than two years earlier. In May 2007 the House Energy Committee released documents suggesting that cost-cutting pressures weakened preventive maintenance and other safety practices in the period leading up to the leaks.

In October 2007 BP agreed to pay a total of $60 million in fines to the EPA. The amount included $50 million for violations of the Clean Air Act in connection with the 2005 explosion at the Texas City, Texas refinery in which 15 workers were killed. The company also pleaded guilty to a felony violation of the act and was to serve three years of probation. Apart from the fine, BP agreed to spend $265 million for a facility-wide study of its safety valves and a renovation of its flare system to prevent excess emissions.

At the same time, BP agreed to pay the EPA a $12 million fine in connection with the March 2006 oil spill in Alaska, pleaded guilty to one misdemeanor violation of the Clean Water Act, and was ordered to serve three years probation on this offense as well. The company was also required to replace 16 miles of pipeline at a cost of $1.56 billion.

Later, in October 2010, BP agreed to pay $15 million in Clean Air Act penalties in connection with violations at the Texas City refinery.

In 2008 BP and several other oil majors agreed to pay $422 million to settle suits that had been brought by public water systems in 20 states and consolidated in federal court relating to the contamination of groundwater supplies by the carcinogenic gasoline additive MTBE.

At its annual meeting in mid-April 2010, BP faced a barrage of criticism over its involvement in controversial tar sands oil production in Canada.

Only days after that meeting, BP had to contend with a much bigger problem: an explosion at its Deepwater Horizon oil platform in the Gulf of Mexico that killed 11 workers and opened a massive underwater oil leak. While the disaster continued, government investigators were looking into indications that BP pushed for work on the well to move ahead despite evidence of unsafe conditions……

Read the full post here.

The Turnbull Government and multinational tax avoidance

On 2 October 2014 the Australian Senate referred the matter of corporate tax avoidance and aggressive minimisation to the Economics References Committee for inquiry and report by the first sitting day of June 2015 and, after repeated extensions, on 2 May 2016 the Senate granted the committee a further extension to report by 30 September 2016. 

The committee’s interim reports clearly indicated that the Australian taxation system was being gamed by foreign-based multinationals using aggressive tax practices such as avoidance of permanent establishment, excessive debt loading, aggressive transfer pricing, and the use of tax havens.

On 11 December 2015 the C’wealth Multinational Anti-Avoidance Law (MAAL) came into effect and, its provisions applied from 1 January 2016 to corporations with global annual incomes of AU$1 billion and over and consolidated groups with a parent entity having a global annual income of AU$1 billion and over.

MAAL was designed to counter the erosion of the Australian tax base by multinational entities using artificial or contrived arrangements to avoid a taxable presence in Australia, adding to anti-tax avoidance measures already found in the Income Tax Assessment Act 1997.

However, less than three months later on 26 April 2016, the Australian Taxation Office (ATO) discovered that some taxpayers are entering into artificial and contrived arrangements to avoid the application of the MAAL.

On 3 May 2016 the Turnbull Government released a consultation paper on its proposed Diverted Profits Tax (DPT).

The DPT will impose a 40 per cent tax rate on corporations and consolidated groups with global annual incomes in excess of AU$1 billion that reduce the tax paid on the profits generated in Australia by more than 20 per cent by diverting those profits to low tax jurisdictions. The government hopes to have this new law in place by 1 July 2017.

According to the consultation paper both the Multinational Anti-Avoidance Law and the Diverted Profits Tax are based on Britain’s diverted profits tax introduced on 1 April 2015.

One can only hope that both these laws will be more effective than the U.K. law on which they are based. Because less than eight months after that law was introduced it was found to be ineffective in stopping large multinationals from diverting profits to low tax jurisdictions. As an example, Google with its U.K. advertising revenue held in low taxing Ireland had not had to make payments under the new diverted profits tax.

There is no way that multinationals operating in Australia will not mount legal challenges if the ATO attempts to impose penalties under provisions in MAAL and DPT. 

To some extent the loser will always be federal government revenue because, successful or otherwise, the corporate millions spent in legal fees fighting the tax man are apparently tax deductible.

Australian Federal Election 2016: it couldn't happen to a more deserving multinational

The Australian, 28 April 2016:

Broadspectrum has entered a trading halt this morning as it seeks to clarify the impact of a potential closure of the Manus Island detention centre.

The detention centre operator’s Manus Island contract is highly lucrative and investors fear it may be taken away after the PNG Supreme Court labelled the detention centre “unconstitutional and illegal” this week.

That ruling preceded PNG Prime Minister Peter O’Neill’s assertion on Wednesday that the centre would “now be closed”, but there remains little clarity on the way forward with the Commonwealth insisting the asylum seekers will not come to Australia.

“The trading halt is requested following press speculation in relation to developments following the PNG Supreme Court decision and their possible impact on Broadspectrum,” the firm said in a statement.

It said it intended to release an update on Friday, April 29.

The action has come as an $800 million takeover offer for Broadspectrum appeared likely to fall over before Monday’s deadline.

In May 2016 Broadspectrum (Australia) Pty Ltd formerly Transfield Services (Australia) Pty Ltd has barely ten months left to run on its $2.189 billion contract with the Australian Government to provide operational, welfare and security services to asylum seekers on Nauru and Manus Island, so it is highly likely that there will be relatively low compensation payable to this multinational corporation flowing from the closure of the both Nauru and Manus Island off-shore detention centres.

Perhaps this is the moment that the federal government can finally begin to rid itself of a corporation plagued by allegations of human rights violations and violence.

Biggest sovereign wealth fund in the world excludes China Shenhua Energy & Whitehaven Coal

In 2015 Shenhua Energy Company announced a fall in net profit of 56.9 percent.

In 2016 another nail in its coal coffin was revealed.....

Bloomberg, 14 April 2016:

Norway’s $860 billion sovereign wealth fund unveiled the first list of miners and power producers to be excluded from its portfolio following a ban on coal investments.

The 52 companies being barred include American Electric Power Co. Inc., China Shenhua Energy Co. Ltd., Whitehaven Coal Ltd., Tata Power Co. and Peabody Energy Corp., according to a statement from Norges Bank Investment Management, the unit of Norway’s central bank that manages the world’s biggest wealth fund. The exclusions are based on new criteria introduced by the government in February impacting companies that base at least 30 percent of their activities or revenues on coal.

“We’re reviewing all relevant companies by the end of 2016, and there will be further exclusions,” NBIM spokeswoman Marthe Skaar said by phone.

The fund has already divested stocks and bonds from the 52 companies, Skaar said. Based on current valuations and allocations in line with the fund’s benchmark index, the securities would represent about 19 billion kroner ($2.3 billion), she said. Most of the companies were out of the portfolio by the end of 2015 because 28 of them overlap with a list of so-called risk-based divestments, which the fund initiated as early as 2013, before it was clear there would be a new exclusion criterion based on coal, she said.

Norges Bank has estimated that the ban on coal investments, which was agreed in Parliament last year against the initial reluctance of Norway’s minority, Conservative-led government, would force the fund to sell holdings valued at about 55 billion kroner in 120 companies. The central bank said in a letter to the Finance Ministry last year that most of the companies will have been evaluated by the end of 2016, and that some could remain in the investment portfolio while the fund continued a dialog on their future use of coal……

The world's biggest private coal miner Peabody Energy which is also on the sovereign wealth fund exclusion list, and also operates in the Gunnedah region, is currently seeking bankruptcy protection in the US. 

A brief look at how Australians view Shenhua:

https://youtu.be/s0ZsO_ef0pc

Global corruption of democracy in the 21st Century

The Guardian UK, 11 April 2016:

Because at root, the Panama Papers are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.

Following on from LuxLeaks, the Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Discussion of offshore centres can get bogged down in technicalities, but the best definition I’ve found comes from expert Nicholas Shaxson who sums them up as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…

“Those who exited our societies are now also exercising their voice to set the rules by which the rest of us live”

But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. Think of the billionaire Koch brothers, whose fortunes will shape this year’s US presidential elections. In Britain, remember the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative party’s election funds – and so effectively bought the Tories their first taste of government in 18 years.

To flesh out the corrosion of democracy that is happening, you need to go to a Berlin-born economist called Albert Hirschman, a giant in modern economic thinking. Hirschman died in 2012 at the age of 97, but it’s his concepts that really set in context what’s so disturbing about the Panama Papers.

Hirschman argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.

In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it……

Australian Federal Election 2016: nowhere to run to, nowhere to hide

It is not just individual taxpayers who should be worried about being caught out using Panama-based firm Mossack Fonseca & Co to allegedly hide unexplained wealth or avoid/evade tax on income earned in this country.

The Turnbull Government should also be worried because this story is likely to run right through the federal election campaign this year and, it is not outside the realms of possibility that names will surface which include known Liberal Party political donors.

It is already a problem for the Prime Minister and Cabinet because along with many other federal government departments/agencies, the Australian Dept. of Defence and Department of Immigration and Border Protection have previous and current contracts with Wilson Security Pty Ltd, a client of Mossack Fonseca.

Neither Defence nor Immigration appear to have conducted genuine due diligence on this company during tender processes, as evidence by their response here and here.

On 4 April 2016 ABC News reported:

Leaked documents have revealed that two brothers embroiled in a massive Hong Kong corruption scandal were ultimately in control of an Australian security company that earned roughly half a billion dollars in lucrative government contracts.

The two billionaire brothers, Thomas and Raymond Kwok, were charged with bribing a Hong Kong government official in July 2012 in a case that shook the Hong Kong establishment.

Soon after their arrest, the leaked documents, obtained by the ABC's Four Corners, show the brothers covertly remained directors of the offshore company that ultimately controls Wilson's operations in Australia — Wilson Offshore Group Holdings (BVI) Limited…..

In December 2014, Thomas Kwok was convicted of the bribery offences and sentenced to five years in prison.

His brother Raymond Kwok was acquitted of all charges.

According to Jason Sharman, professor at the Centre of Governance and Public Policy at Griffith University, the "common sense" definition is that the company listed as the ultimate holding company is "not only the legal owner but the entity in control," he said.

"You would expect that if you've got a company at the top of the chain that is in control of a lot of assets, people would really want to know who they are working for, who they are owned by and who they are being directed by," said Professor Sharman…..

Since the arrest of the Kwok brothers in July 2012, Wilson Security secured a sub-contract to provide garrison services for Australia's offshore detention centres on Nauru and Manus Island as well as various other contracts with Defence, The Australian Tax Office and the Department of Prime Minister and Cabinet.

The Kwok brothers maintained effective control as directors via a covert manoeuvre facilitated by Mossack Fonseca.

Two weeks after the brothers were charged, both Thomas and Raymond Kwok removed themselves as directors from Wilson Offshore Group Holdings (BVI) Limited but replaced themselves with two mysterious new directors that were companies, Winsome Sky and Harmony Core.

The leaked files show the directors of those mystery companies were in fact the Kwok brothers themselves.

Thomas Kwok signed on as the director of Winsome Sky on July 30, 2012, and on the same day Raymond signed on as the director of Harmony Core……

Wilson Offshore Group Holdings (BVI) Limited was originally registered in 1991 under a different name, Covert Investments.

Thomas and Raymond Kwok, as well as their older brother Walter, were early directors of Covert Investments before it changed its name to Wilson Offshore Group Holdings (BVI) Limited in 2004.

BACKGROUND

The company founded by Jürgen Mossack and Ramón Fonseca says of itself:

Established in 1977, the Mossack Fonseca Group is a leading global company which provides comprehensive legal and trust services.

With over 500 staff members across every continent, the Mossack Fonseca Group provides excellent services based on more than 35 years of experience. As part of its added value, the Group offers personal advice and a world-class online experience through a virtual Client Portal which is available 24 hours a day. Our web-based Client Information Portal application allows clients to reserve companies online, verify the status of companies, and pay invoices, in addition to other transactions.

Our service and research-oriented professionals specialize in trust services, wealth management, international business structures, and commercial law, among other areas.

Our product and service portfolio is constantly updated and renewed, enabling the Group to find the appropriate solution for your business. We offer research, advice and services for the following jurisdictions: Belize, The Netherlands, Costa Rica, United Kingdom, Malta, Hong Kong, Cyprus, British Virgin Islands, Bahamas, Panama, British Anguilla, Seychelles, Samoa, Nevada, and Wyoming (USA).

Our law firm has specialized attorneys experienced in all areas of law such as shipping, immigration, contracts and intellectual property, as well as commercial law in general. We also assist clients in physically relocating to Panama and supporting them with regard to all of the steps required, from handling immigration matters and buying or renting property to establishing their business in Panama.

Australian Taxation Office media release 4 April 2016:

ATO statement regarding release of taxpayer data

Recently, the ATO received data in relation to a Panamanian law firm containing names of a significant number of Australian residents. Currently we have identified over 800 individual taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong.

These cases relate to the release of data by transparency or media organisations in Australia and overseas. ATO intelligence on tax evasion comes from a variety of sources, including from concerned citizens, advisers, partner agencies and international bodies. For example the ATO has raised tax liabilities of around $400 million from data supplied by confidential informants.

Deputy Commissioner Michael Cranston said that since the completion of the offshore disclosure initiative 'Project DO IT', the ATO has ramped up its compliance work to deal with those taxpayers who have failed to disclose offshore income and assets. Sharing information and coordinating action closely with other tax administrations is a large part of this work.

"We promised the community that following Project DO IT we would continue to build our intelligence base, undertake audits, apply significant penalties and refer the worst cases for criminal investigation" Mr Cranston said.

"We have been analysing the latest data against information these taxpayers had reported to the ATO and against the information we already have. We are also working closely with the AFP, Australian Crime Commission and AUSTRAC to further cross-check the data and strengthen our intelligence. Some cases may be referred to the Serious Financial Crime Taskforce.

This Taskforce builds on the success of Project Wickenby where we raised $2.29billion in tax liabilities and there were 46 criminal convictions.

"The information we have includes some taxpayers who we have previously investigated, as well as a small number who disclosed their arrangements with us under the Project DO IT initiative. It also includes a large number of taxpayers who haven't previously come forward, including high wealth individuals, and we are already taking action on those cases" Mr Cranston said.

"Through data analysis we have been able to identify patterns such as clusters of individual taxpayer and advisers for further investigation."

"The message is clear - taxpayers can't rely on these secret arrangements being kept secret and we will act on any information that is provided to us" Mr Cranston said.

The Sydney Morning Herald, 4 April 2016:

More than 11.5 million documents have been leaked from Mossack Fonseca's files, revealing the secrets of hundreds of thousands of clients – including several thousand Australians – covering a period over almost 40 years, from 1977 until as recently as last December.

The release of the documents on Monday follows a 12-month investigation by media groups including The Australian Financial Review, led by the International Consortium of Investigative Journalists (ICIJ) in Washington…..

The files show how Mossack Fonseca thwarted Australian regulators and police inquiries, continued to act for individuals accused of fraud and embezzlement, and lobbied actively to prevent Australia from signing agreements that would allow the exchange of tax information with Samoa, a key tax avoidance jurisdiction.

While most investors and corporations who use tax havens have legitimate reasons to use these structures, the leaked records also show some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals, and tax avoidance.

"Some cases may be referred to the Serious Financial Crime Taskforce," ATO deputy commissioner Michael Cranston told the Financial Review, confirming the Australian link with Mossack Fonseca.

The data includes high wealth individuals "and we are already taking action on those cases", Mr Cranston said.

"ATO intelligence on tax evasion comes from a variety of sources, including from concerned citizens, advisers, partner agencies and international bodies…..

Mr Cranston said some of the Australians under scrutiny had previously been investigated by the Tax Office but the probe included a "large number of taxpayers who haven't previously come forward".

The ATO investigation is based on a smaller set of files detailing Mossack Fonseca's Luxembourg operations, which were sold to the German government by a former employee, triggering scores of raids by tax investigators who targeted Commerzbank​ clients in Germany in February last year.

German newspaper Süddeutsche Zeitung​, working with the ICIJ, subsequently obtained much more extensive files, with a total 2.6 terabytes of data for Mossack Fonseca's entire global operations, from an anonymous informant. No payment was made……

The Panamanian firm is one of the top five global groups providing corporate registry services in 21 low-tax jurisdictions around the world for more than 214,000 companies, trusts and foundations, providing an essential services for legitimate companies and investors, including BHP Billiton.

But the files show that the firm also protects its less reputable clients, keeping Swiss advisory firm Strachans on its books despite a decade of Project Wickenby investigations initially focused on Strachans that led to 46 criminal convictions, including a jail term for a Strachans partner, Philip de Figueiredo.

Another Wickenby target, Rockhampton-born lawyer Peter Borgas, based in Switzerland, remained a valued Mossack client even after he was arrested in Sydney in 2013 (the charge was dropped five months later).

Last December, Mossack decided it would not act on its probity concerns for a firm controlled by Tan Yixin, a Chinese executive jailed for 3½ years for bribes and leaking secrets to Australia's Rio Tinto, because "the client will destroy us with their comments" in the high-growth Chinese market.

When the Australian Federal Police wrote to Mossack Fonseca's British Virgin Islands office in July 2012 to enforce an Australian court order to sell a Perth apartment on which a BVI company, Anchorville Holdings Ltd, allegedly held a mortgage, Mossack replied that Anchorville had been struck off in 2007 and asked the AFP to stop sending letters.

Perth entrepreneur Roger Bryer had lived for a decade in the spectacular Perth penthouse, which was tied up in lengthy criminal trials over a $US15 million ($19.5 million) embezzlement case involving Commerzbank. Most of the proceeds had been transferred to Australian accounts controlled by Mr Bryer, to invest. Mr Bryer told police he had no knowledge the money was stolen. It was not suggested that he had acted improperly.

In 2012, the DPP applied to sell the penthouse as part of the proceeds of crime, but Anchorville had been set up as mortgagee on it.

Rebuffed by Mossack Fonseca, the AFP obtained a BVI search warrant in November 2012. A Mossack executive produced old documentation showing Anchorville was owned by yet another nominee company.

Meanwhile, Mossack had contacted the original registered owner of Anchorville and offered to reinstate the company, for $5487. As part of that reinstatement, new documents were registered in 2013 that showed that Bryer had owned Anchorville since 2001.

Mr Bryer told the Financial Review on Sunday that he had made it clear to the AFP that he controlled Anchorville and the matter had been completely resolved in a confidential settlement with the AFP and DPP on February 6, 2013.

While Anchorville was set up as a mortgagee company, its mortgage on the penthouse was not valid.

"I have very grave doubts as to whether they were acting legitimately," Mr Bryer said of Mossack Fonseca. "None of it was credible for that company."…..

In 2008, Sydney developer George Ghossayn​, who at the time was a regular in the appointment diary of Labor powerbroker Eddie Obeid​ before later switching his support to the Liberal Party, was setting up an offshore partnership with fellow developer Fouad Deiri​, in a BVI company, Fitall Development Limited.

In September 2013, convicted cocaine dealer-turned-Queensland property developer Joseph Frangieh​ took control of a Seychelles company, Silver Tiger Enterprises Limited.

In late 2011, sports promoter Dominic Galati​ was publicly challenging to replace Frank Lowy as chairman of Football Federation Australia, "because I believe that someone has to be a voice out there for the people that are passionate about this game".

Behind the scenes, Galati was involved in setting up half a dozen companies in Samoa, which were transferred to a new Hong Kong company, Global Wealth Group, controlled by Galati, William Aloisi, John McGeary and Roy Bijkerk.

William Aloisi's website describes him as an investment banker. Mr McGeary is a greyhound trainer, while Bijkerk is a convicted cocaine importer who has built a property empire through Guardian Care Properties.

A remarkable 269 shareholdings of companies in the British Virgin Islands, Samoa, the Seychelles and Panama, almost all of them holding bearer shares, are linked to just four addresses on the Gold Coast associated with family members of Ian Taylor, a New Zealand businessman who, with his father Geoffrey Taylor, has set up shell companies that have since been linked to arms deals, Mexican drug lords and Russia's largest tax fraud.

There has been no suggestion of illegality by the Taylors.

Ian Taylor has previously told Fairfax that "only a small handful" of their companies were misused.

"Clients of certain nationalities are discriminated against only due to their citizenship.

Read the full article here.

The Australian, 4 April 2016:

More than 1000 Australian links to companies have been found in a data leak of millions of documents from a Panama law firm…..

The passports of hundreds of Australian citizens connected to companies as directors, shareholders and beneficial owners, are included according to the ABC.