The release of the Panama Papers is the latest in a series of leaks in what is a very 21st century problem for institutions who are required to hold their client’s data confidentially. In an age where huge quantities of data can be transferred at the press of a button, and where the international political climate is resolutely hostile to those who are perceived to be evading tax, money laundering or breaching sanctions, those who believe that their confidentiality is assured are at increased risk of discovery.
In respect of those who have concerns about their tax affairs HMRC has today announced that “HMRC can confirm that we have already received a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation. We have asked the ICIJ to share the leaked data that they have obtained with us. We will closely examine this data and will act on it swiftly and appropriately.” As a matter of policy, HMRC is not afraid of using illicitly sourced information to launch investigations. In 2010, following the theft of data from Swiss Division of HSBC by an IT contractor, HMRC acquired the details of hundreds of UK tax payers who held accounts. The first prosecution relating to the material was disposed of in July 2012: Michael Shanley was found to have evaded £430,000 in inheritance tax; he was ordered to pay a fine equating to almost 100% of the tax evaded plus costs. However, when the Swiss private bank Julius Baer suffered a similar leak in 2012 the UK Government declared that it would not “actively seek to acquire customer data stolen from Swiss banks” perhaps seeking to distance themselves from the German tax investigators who paid the bank employee for the information. It appears from the statement released today that HMRC have no qualms about the manner in which the Panama Papers have come to light and plan on making full use of any intelligence it contains.