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Economy

New details show extent of offshore tax havens

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A screen shot of a search for offshore companies with links to Japan in the ICIJ's database.   © Kyodo

LONDON/HANOI/TOKYO -- New revelations from the Panama Papers give a glimpse into an obscure world of some 210,000 paper companies scattered across 21 tax havens, with ties to corporations and individuals around the globe.

Western media have delved into the searchable database created by the International Consortium of Investigative Journalists, which broke the leaked documents, to shed light on connections to their countries. USA Today and The Washington Post report that at least 36 Americans accused of financial fraud and other crimes are named in the documents, including a former pro football player named by the Post.

The Canadian Broadcasting Corp. reports that a Canadian ex-attorney was involved in the creation of more than 1,000 companies for tax avoidance purposes. Tax authorities have begun investigating individuals named in the documents, according to a local newspaper.

Media in China and a number of other Asian countries have not reported on the latest Panama Papers revelations, but there have been calls for figures previously named to explain themselves.

A relative of Chinese President Xi Jinping is among the Chinese individuals named in the documents. The ICIJ's website cannot be accessed in China, and internet searches for "Panama Papers" there are blocked. Cambodia's Justice Ministry denies reports that Minister Ang Vong Vathana was involved in the creation of a paper company in a tax haven.

Fiscally troubled Southeast Asian countries can hardly afford to let tax revenues slip through their fingers. Indonesian President Joko Widodo has ordered financial and tax authorities to investigate Indonesians named in the documents. The leader of Thailand's ruling junta, Prayuth Chan-ocha, has also called for a probe.

New Zealand Prime Minister John Key called characterizations of his country as a tax haven "utterly incorrect." Mossack Fonseca, the Panama-based law firm from which the documents were leaked, is said to have used New Zealand as a tax shelter for clients. The country is mentioned 61,000 times in the documents, according to local media. There are even reports of a connection between Mossack Fonseca and an attorney to Key himself.

Japan links

The names of about 230 Japanese nationals and roughly 20 Japanese companies have arisen in connection with the offshore entities in the Panama Papers. The National Tax Agency said it will "work to ensure proper and fair taxation by undertaking tax audits and other actions" if it determines that any wrongdoing has occurred.

Japanese companies named in the documents denied seeking to avoid taxes.

Trading houses Itochu and Marubeni said they set up offshore entities for the purposes of expanding their commodity-related businesses. SoftBank Group said it took part in a project at the request of a Chinese information technology company and has since withdrawn from it.

Japan Petroleum Exploration also offered an explanation, saying that it received shares issued in connection with oil and gas operations in Indonesia and that earnings from wells in production since 2012 have been subject to taxes there.

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