Ten years after the Panama Papers exposed widespread offshore structures used by celebrities and politicians for tax evasion and money laundering, the global community faces a sobering reality. While some rules have indeed changed, the fundamental business of financial secrecy largely continues unabated, leaving many observers, including former prosecutor Anne Brorhilker, feeling disappointed.
Brorhilker, who pursued Cum-Ex perpetrators as a public prosecutor in Cologne, was no stranger to financial crime. Yet, the sheer scale and intricate details revealed by the Panama Papers in April 2016 were profoundly shocking. The leak, one of the biggest financial scandals in recent history, vividly illustrated how the world’s wealthy and powerful concealed their assets, sparking investigations into tax evasion, money laundering, and corruption. The revelations implicated numerous public figures, even forcing some government leaders to resign.
High-Profile Individuals in the Data Leak
The Panama Papers comprised over eleven million documents from the Panamanian law firm Mossack Fonseca. The firm had reportedly established shell companies for years, helping prominent individuals obscure their wealth. An anonymous source, “John Doe,” provided the data to Germany’s Süddeutsche Zeitung, which then shared the material with the International Consortium of Investigative Journalists (ICIJ). Nearly 400 reporters worked for a year to uncover the story.
The scandal garnered immense attention due to the high density of celebrities and politicians within the documents. Football star Lionel Messi, then-Ukrainian President Petro Poroshenko, and then-Icelandic Prime Minister Sigmundur Gunnlaugsson all appeared with offshore structures. Close associates of Russian President Vladimir Putin moved money via shell companies, and several German banks were identified as having facilitated the creation of such entities.
It’s important to note that shell companies are not inherently illegal, and many structures within the Panama Papers were technically lawful. Corporations often use offshore entities to operate more easily across international borders. However, Mossack Fonseca specialized in highly complex structures involving multiple layers of shell companies and straw persons, explicitly designed to obscure the true identities of owners—a principle frequently exploited for tax avoidance, or worse, money laundering.
“This industry could operate in the shadows for a long time. The leak shined a spotlight on it,” states Anne Brorhilker, who now works for the NGO Finanzwende. “Everyone could suddenly see how professionally the global elite uses offshore structures for concealment. That was a crucial step.”
Shell Company Business Continues to Thrive
Despite the initial shock, what tangible changes have the Panama Papers brought about? The European Union tightened anti-money laundering directives, requiring banks to scrutinize their clients more rigorously. A key development was the introduction of the Automatic Exchange of Information (AEOI), where banks annually send foreign customers’ account data to their home tax authorities without specific request. A study by the German Institute for Economic Research (DIW) last year suggested a decrease in offshore wealth in tax havens since the AEOI was implemented. However, many significant nations, including the USA, have not fully joined the agreement.
In Germany, the “Tax Haven Defense Law” was enacted in 2021, creating a list of tax havens. Companies dealing with these “non-cooperative tax jurisdictions” face stricter reporting requirements. Currently, this list contains eleven countries, none of which are EU members, and notably excludes the USA, despite its limited sharing of tax data.
Mossack Fonseca itself did not survive the scandal, dissolving in 2018. Its founders, Jürgen Mossack and Ramón Fonseca, were briefly held in pre-trial detention in 2017 but were later released on bail. Fonseca passed away in May 2024, and Jürgen Mossack was acquitted in Panama shortly thereafter.
The business of shell companies, however, seems to have flourished. Many suspected at the time that criminal clients would simply shift to other firms, a theory later substantiated by similar investigations like the Paradise and Pandora Papers. A recent study by Oxfam further indicates that national treasuries continue to lose enormous sums.
Trillions Hidden in Tax Havens
According to Oxfam, approximately $3.55 trillion in untaxed assets were hidden in tax havens and undeclared foreign accounts in 2024. Roughly 80 percent of this wealth belongs to the richest 0.1 percent of the world’s population. “The problem persists, and we all pay the price,” says Manuel Schmitt, an expert on social inequality at Oxfam Germany. “This money is missing for schools, hospitals, and climate protection – both at home and worldwide. Those who evade financing the common good in this way exacerbate inequality and undermine our democracy.”
A specific issue in Germany, Brorhilker argues, is the lack of enforcement despite legislative improvements. “There have been a few laws, but they don’t cover everything,” she criticizes. “Crucially, there must be an administration behind them to enforce these laws.” German authorities are poorly positioned, lacking expertise and cross-border cooperation, while perpetrators are often highly professional and financially well-equipped. “This doesn’t deter potential offenders.”
Despite initial steps, the structural problems remain massive, Brorhilker concludes. Indeed, there have been very few criminal trials in Germany directly related to the Panama Papers. A trial against a lawyer, accused of assisting in asset concealment as part of Mossack Fonseca, only began in Cologne in March—nearly ten years after the revelations. This speaks volumes, Brorhilker notes. “Ultimately, one must say: little has changed in the past ten years.”
While awareness has certainly increased since the Panama Papers, she emphasizes: “It must be clear: we can hardly combat this type of crime with many national authorities that barely communicate with each other.” She advocates for a new federal investigative agency, a “powerful group of well-equipped and operationally experienced investigators.” “That is the only realistic way we can more effectively prosecute such crimes in the medium term.”
