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Pandora Papers: ‘This is a global network of which Canada is a hub’ – Global News

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The Pandora Papers, the latest leak of offshore financial records, don’t seem to have a particular focus on Canada — at least based on what has been revealed so far.

But they nonetheless shed light on a global network of illicit financial flows of which “Canada is a hub,” says James Cohen, executive director of the Canadian chapter of Transparency International.

The nearly 12 million documents from 14 offshore services providers offer more detail on how the wealthy can shelter their money from the prying eyes of tax authorities and law enforcement.

Read more:
Pandora Papers — Global powers deny wrongdoing in offshore finance data dump

The document dump, obtained by the Washington, D.C.-based International Consortium of Investigative Journalists, a network of reporters and media organizations, follows the Panama Papers and the Paradise Papers leaks.


Click to play video: 'Pandora Papers: White House says Biden administration committed to ‘additional transparency’'



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Pandora Papers: White House says Biden administration committed to ‘additional transparency’


Pandora Papers: White House says Biden administration committed to ‘additional transparency’

Here are some key questions about how the wealthy hide their money and what the practice means for Canada:


Is it illegal for Canadians to set up offshore accounts?

No, it isn’t. It is perfectly legal for Canadians to have financial accounts and assets abroad.

“Canadians and others are allowed to put their money where they want,” says Michael Smart, an economics professor at the University of Toronto.

There are plenty of legitimate reasons for holding funds and assets outside of one’s country of residence, such as doing business and investing abroad or simply owning a vacation home abroad, for example.

But offshore financial systems can be a way to shelter wealth from tax and law enforcement authorities.

“It can be very difficult for the Canada Revenue Agency and the other national tax authorities … to know what’s going on there, know how much tax should be paid at home on the amounts that are flowing through those places,” Smart says.

Read more:
‘Pandora Papers’ — World leaders, celebrities among hundreds named in secret financial leak

At issue is both tax evasion and tax avoidance, says Andre Lareau, a law professor at Universite Laval. The first involves breaking the law. Tax avoidance is a murkier concept. It generally involved minimizing one’s tax burden in ways that are within the letter but not the spirit of the law, Lareau says.

In 1988, Canada added a “general anti-avoidance rule” to the Income Tax Act that has served as the reference point to draw the line between acceptable strategies to minimize tax and tax avoidance, which abuses the law, Lareau says.


Click to play video: '‘Pandora Papers’: UK’s Boris Johnson, Jordan’s King Abdullah comment on financial leak'



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‘Pandora Papers’: UK’s Boris Johnson, Jordan’s King Abdullah comment on financial leak


‘Pandora Papers’: UK’s Boris Johnson, Jordan’s King Abdullah comment on financial leak


Where are these offshore accounts?

The term “offshore” originates from some of the small island countries that have become famous for being tax havens. Some of the financial services providers involved in the Pandora Papers leak, for example, operate in the British Virgin Islands and Cyprus.

But the latest leak makes it clear that offshore locations aren’t the only place where the wealth can set up opaque financial structures.

“One revelation already coming out of the Pandora Papers is that South Dakota is a very prominent jurisdiction for anonymous companies to be incorporated,” Cohen says.

And in 2016, the Panama Papers revealed Canada itself is a tax haven for some. The country’s pristine international reputation and lax anti-money laundering regime have made it an especially attractive destination for criminals looking for a place to park their funds, Cohen says.


How do the wealthy hide their money?

It takes money to hide your money. Circumventing taxes and investigators usually requires sophisticated legal and tax strategies.

“The root of the problem are tax advisors,” Lareau told Global News. While Canada has monetary penalties for tax pros who help clients perpetrate tax fraud, it should introduce jail sentences for added deterrence, he argues.


Click to play video: 'Panama Papers: Names of hundreds of Canadians released'



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Panama Papers: Names of hundreds of Canadians released


Panama Papers: Names of hundreds of Canadians released – May 9, 2016


Who owns offshore accounts?

Whether or not the account is actually “offshore,” sheltering wealth usually involves setting up complex financial structures that make it difficult to figure out who ultimately owns what.

“You have Company 123 owned by Company ABC owned by Company QWR and then behind that, there’s finally Bob, who owns 25 per cent … or more of that company,” Cohen says, giving an extremely simplified example.

“Who is Bob? Where did Bob get that money from?” he asks.

While financial institutions have an obligation to address that question and verify who they’re really doing business with, it wasn’t until June of this year that Canada introduced similar requirements to others, including tax advisers and real estate agents.

But even with stricter rules in place, it can often be difficult for private-sector entities to assess who really owns what, Cohen says.

Read more:
CRA identifies nearly 900 Canadians in Panama Papers, 5 investigations underway

That’s why Canada needs a publicly searchable registry of beneficial ownership, he adds.

In 2019, British Columbia created a publicly searchable registry of information about beneficial ownership of land in the province. Quebec, meanwhile, now requires beneficial ownership to be reported in its existing corporate registry.

In its 2021 federal budget, the Liberal government announced $2.1 million to support the creation of a public corporate beneficial ownership registry by 2025. And during the federal election, the Conservatives, NDP and Greens also called for the creation of a similar database to help tackle tax dodging and money laundering.

And it’s crucial that any such registry be publicly available, Cohen says.

“We can say, ‘Let’s put more money into the RCMP and CRA,’” he says. “But at the end of the day, we look at the Pandora Papers and the Paradise Papers and the Panama Papers. These were journalists and civil society groups that are digging through the data to find out who is involved faster than even the authorities can work through that data.”

© 2021 Global News, a division of Corus Entertainment Inc.

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U.N. plane aborts landing as air strike hits Ethiopia’s Tigray

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An Ethiopian government air strike on the capital of the northern Tigray region on Friday forced a U.N. aid flight to abort a landing there, the United Nations said.

In neighboring Amhara region, people were fleeing intensified fighting.

Humanitarian sources and the Tigray People’s Liberation Front (TPLF), which controls the area, said a university in the regional capital Mekelle was hit by the air strike.

Government spokesman Legesse Tulu said a former military base occupied by TPLF fighters was targeted, and he denied the university was hit.

Reuters was not able to independently confirm either account. TPLF-controlled Tigrai TV reported that 11 civilians were wounded in the air strike. It was at least the fourth day this week that Mekelle had been attacked.

The United Nations suspended all flights to Mekelle after a U.N. plane with 11 passengers had to abort landing on Friday.

The flight from Addis Ababa had been cleared by federal authorities but was told by the Mekelle airport control tower to abort the landing, U.N. spokesman Stephane Dujarric said

“This is the first time that we had a flight turn around, at least to my knowledge, in the recent past in Ethiopia because of air strikes on the ground,” senior U.N. aid official Gemma Connell, who heads U.N. humanitarian operations in southern and eastern Africa, told reporters in New York on Friday.

The passengers were aid workers traveling to a region where some 7 million people, including 5 million in Tigray, need humanitarian help, she said.

The flight safely returned to the Ethiopian capital Addis Ababa, Dujarric said.

‘THE WHOLE CITY IS PANICKING’

The two sides have been fighting for almost a year in a conflict that has killed thousands of people and displaced more than two million amid a power struggle between the TPLF and the central government of Prime Minister Abiy Ahmed in Addis Ababa.

The TPLF dominated the Horn of Africa country’s ruling party for decades before Abiy, who is not a Tigrayan, took office in 2018.

The government has stepped up air strikes on the Tigray capital as fighting has escalated in Amhara, a neighbouring region where the TPLF has seized territory that the government and allied armed Amhara armed groups are trying to recover.

Residents in Dessie, a city in Amhara, told Reuters people were fleeing, a day after a TPLF spokesperson said its forces were within artillery range of the town.

“The whole city is panicking,” a resident said, adding that people who could were leaving. He said he could hear the sound of heavy gunfire on Thursday night and into the morning, and that the bus fare to Addis Ababa, about 385 km (240 miles) to the south, had increased more than six-fold.

There are now more than 500,000 displaced people in the Amhara region, the National Disaster Risk Management Commission told Reuters.

Seid Assefa, a local official working at a coordination centre for displaced people in Dessie, said 250 people had fled there this week from fighting in the Girana area to the north.

“We now have a total of 900 (displaced people) here and we finished our food stocks three days ago.”

Leul Mesfin, medical director of Dessie Hospital, told Reuters two girls and an adult had died this week at his facility of wounds from artillery fire in the town of Wuchale, which both the government and the TPLF have described as the scene of heavy fighting over the past week.

(Reporting by Addis Ababa newsroomAdditional reporting and writing by Maggie Fick and Ayenat Mersie in Nairobi, additional reporting by Michelle Nichols in New York; Editing by John Stonestreet, Peter Graff, Alex Richardson, William Maclean)

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Nigerian state to shut camps for people displaced by insurgency

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Nigeria‘s Borno state, the epicentre of an ongoing Islamist insurgency, will shut all camps that are holding thousands of internally displaced persons by the end of the year, its governor said on Friday, citing improved security in the state.

The conflict between the insurgents and Nigerian’s armed forces has also spread to Chad and Cameroon and has left about 300,000 dead and millions dependent on aid, according to the United Nations.

Borno, which shares a border with Niger, Cameroon and Chad has for more than a decade been the foremost outpost of an insurgency led by Islamist group Boko Haram and later its offshoot Islamic State for West Africa Province (ISWAP).

Speaking after a meeting with President Muhammadu Buhari in Abuja, Borno governor Babgana Zulum said security had improved in the state so much that those living in camps in the state capital Maiduguri could return home.

“So far so good, Borno State government has started well and arrangements have been concluded to ensure the closure of all internally displaced persons camps that are inside Maiduguri metropolis on or before 31st December, 2021,” Zulum said.

But humanitarian groups say most families are unwilling to return to their ancestral lands especially in the northern parts of Borno, which they deem unsafe.

Buhari has in the past months claimed his government was gaining ground on the insurgents. Last week the country’s top general said ISWAP leader Abu Musab al-Barnawi was dead, without giving details.

Zulum said Borno state authorities would continue to repatriate Nigerian refugees from a camp in Cameroon.

Boko Haram’s leader Abubakar Shekau died in May and Nigeria says hundreds of fighters loyal to the Islamist group have been surrendering to the government since then.

 

(Reporting by Maiduguri newsroom, Writing by MacDonald Dzirutwe; Editing by David Gregorio)

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Exclusive-U.S. hopes to soon relocate Afghan pilots who fled to Tajikistan, official says

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The United States hopes to soon relocate around 150 U.S.-trained  Afghan Air Force pilots and other personnel detained in Tajikistan for more than two months after they flew there at the end of the Afghan war, a U.S. official said.

The State Department official, who spoke on condition of anonymity, declined to offer a timeline for the transfer but said the United States wanted to move all of those held at the same time. The details of the U.S. plan have not been previously reported.

Reuters exclusively reported first-person accounts from 143 U.S.-trained Afghan personnel being held at a sanatorium in a mountainous, rural area outside of the Tajik capital, Dushanbe, waiting for a U.S. flight out to a third country and eventual U.S. resettlement.

Speaking on smuggled cell phones kept hidden from guards, they say they have had their phones and identity documents confiscated.

There are also 13 Afghan personnel in Dushanbe, enjoying much more relaxed conditions, who told Reuters they are also awaiting a U.S. transfer. They flew into the country separately.

The Afghan personnel in Tajikistan represent the last major group of U.S.-trained pilots still believed to be in limbo after dozens of advanced military aircraft were flown across the Afghan border to Tajikistan and to Uzbekistan in August during the final moments of the war with the Taliban.

In September, a U.S.-brokered deal allowed a larger group of Afghan pilots and other military personnel to be flown out of Uzbekistan to the United Arab Emirates.

Two detained Afghan pilots in Tajikistan said their hopes were lifted in recent days after visits by officials from the U.S. embassy in Dushanbe.

Although they said they had not yet been given a date for their departure, the pilots said U.S. officials obtained the biometric data needed to complete the process of identifying the Afghans. That was the last step before departure for the Afghan pilots in Uzbekistan.

PREGNANT AFGHAN PILOT

U.S. lawmakers and military veterans who have advocated for the pilots have expressed deep frustration over the time it has taken for President Joe Biden’s administration to evacuate Afghan personnel.

Defense Secretary Lloyd Austin was pressed on the matter in Congress last month, expressing concern at a hearing for the pilots and other personnel.

Reuters had previously reported U.S. difficulties gaining Tajik access to all of the Afghans, which include an Afghan Air Force pilot who is eight months pregnant.

In an interview with Reuters, the 29-year-old pilot had voiced her concerns to Reuters about the risks to her and her child at the remote sanatorium. She was subsequently moved to a maternity hospital.

“We are like prisoners here. Not even like refugees, not even like immigrants. We have no legal documents or way to buy something for ourselves,” she said.

The pregnant pilot would be included in the relocation from Tajikistan, the U.S. State Department official said.

Even before the Taliban’s takeover, the U.S.-trained, English-speaking pilots had become prime targets of the Taliban because of the damage they inflicted during the war. The Taliban tracked down the pilots and assassinated them off-base.

Afghanistan’s new rulers have said they will invite former military personnel to join the revamped security forces and that they will come to no harm.

Afghan pilots who spoke with Reuters say they believe they will be killed if they return to Afghanistan.

 

(Reporting by Phil Stewart; editing by Grant McCool)

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