Secrecy for Sale | Methodologies
“settlors” or “protectors” of offshore trusts, as well as power-of-attorney holders who direct the actions of third parties. Many of the structures are designed to conceal the true ownership and control of assets placed offshore. Their identified addresses are spread across over more than 170 countries and territories. A large number of positions are held by so called “nominee directors,” whose names appear again and again, sometimes in hundreds of companies. Nominee directors are people who, for a fee, lend their names as office holders of companies they know little about. It is a legal device widely utilized in the offshore world — akin to having your motor vehicle registered in the name of a stranger. The records indicated that company directors and shareholders were often nominee companies, law firms or other types of “corporate persons,” some of which were managed and owned by still other nominees and companies. ICIJ’s data analysis showed that the people setting up offshore entities lived most often in China, Hong Kong and Taiwan. Another important group of clients comes from Russia and former Soviet republics. This helps explain why the second-
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©2013 Center for Public Integrity
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largest source of capital investment flowing into China is the tiny offshore tax haven of the British Virgin Islands. Similarly, a large source of investment flowing into Russia is from Cyprus, a country that also features heavily in the data — and whose financial stability was recently undermined by a crisis precipitated by Cypriot-based banks being bloated by Russian money. ICIJ’s team of 86 investigative journalists from 46 countries represents one of the biggest cross-border investigative partnerships in journalism history. Unique digital systems supported private document and information sharing, as well as collaborative research. These included a message center hosted in Europe and a U.S.-based secure online search system. Team members also used a secure, private online bulletin board system to share stories and tips. The project team’s attempts to use encrypted e-mail systems such as PGP (“Pretty Good Privacy”) were abandoned because of complexity and unreliability that slowed down information sharing. Studies have shown that police and government agents — and even terrorists — also struggle to use secure e-mail systems effectively. Other complex cryptographic systems popular with com-
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