PANAMA PAPERS – A BLESSING IN DISGUISE?

 Article by ILAYDA NIJHAR*

The past few days has been shocking for many following the release of eleven million records and files by the world’s fourth biggest offshore law firm, Mossack Fonseca, which has served in the interests of over 300,000 companies. The documents themselves publicise the different routes taken by certain individuals to protect and hide their assets via offshore tax regimes. Among those whose personal finances were revealed were 12 national leaders, over 140 politicians amongst other high ranking individuals. The documents shed light upon how individuals were aided in evading tax and avoiding sanctions. The leak is the biggest of its kind, even more so than the 2010 WikiLeaks scandal and the 2013 Snowden case which saw the release of classified intelligence documents.

So how has the revealing of secret financial information impacted nations and their citizens? Some of the names involved in the released files are Sigmundur Gunnlaugsson, prime minister of Iceland, Nawaz Shaif, Pakistan’s prime minister, Petro Poroshenko, president of Ukraine as well various links to Russian president Vladimir Putin. Already we have witnessed the resignation of Iceland’s prime minister following major unrest and protest. The pressure has also led to the reshuffling of his government. A similar example of tax avoidance can be witnessed with the case of British Prime Minster David Cameron whose family has been hiding large amounts of money abroad and entirely avoiding any form of tax obligations – surely going against Conservative principles?

Although the Panama paper leak scandal has caused outrage and fury across the globe and put leaders to shame, the perception is quite the contrary in Russia. Despite the release of confidential documents which claim that Putin was involved in money laundering of around $2 billion, including those in his inner circle, many do not see it as a cause for concern. Although there is clear evidence which shows that major Russian firms such as the national Bank Rossiya were involved in various tax dodging deals, there has been no sign of remorse on the Russian side. The reception of the story was delayed and cut short with many state owned TV stations ignoring the news with only the NTV reporting the events and labelling the allegations as Putinophobia. There has been an immediate negative response from Russia in regard to the accusations with many claiming that Putin has once again merely become a key target from an orchestrated media attack. More so, Dmitry Peskov, Putin’s spokesman stated that the release of the documents were directly targeted to discredit Putin and his administration. Yet we must also note and consider that Putin’s name does not actually appear in the files but more so the various links to him personally.

The Panama Paper leak had been viewed by millions as simply outrageous and the actions as criminal by the leaders who have been involved. However it its the timing of the release which plays a key role in the attitude adopted by the Russians. Relations between Russia and the Western world have been deteriorating for a long period of time with statements such as the beginning of a ‘new cold war’ featuring regularly when diplomatic disputes go astray. Many Russians see this as a deliberate act to destabilise the nation and cause further trouble domestically with WikiLeaks recently announcing that Washington was behind the leak and further stating that the attack was ‘produced’ to target Putin and Russia.

When relations are so fragile, it takes very little to cause even further distrust and indignation. Moscow may see this as an opportunity to strengthen their speech against those who do not align with Russian interests. With parliamentary elections only months away, the Panama Paper scandal may be a blessing in disguise to those whose agenda depends upon further breaking away from the Western world and their politics. World leaders regularly project their concern regarding the way Russia carries out its matters and they succeed in imposing any form of sanctions they see fit, yet they fail to acknowledge their own levels of corruption and malfeasance as highlighted through the release of the Panama Papers. After years of ongoing anti-Russian rhetoric and diplomatic affairs aimed at excluding Russia from frontline decision making, it comes as no surprise that Russia has adopted a strong and justified stance against those who actively work against their interests.

*Ilayda Nijhar is a second year Russian and Politics student studying at Queen Mary, University of London. She also continues her studies in Russia where she advances her language and writes articles about Russian affairs and politics.