People and businesses in Russia, Ukraine, Uzbekistan and other countries in eastern Europe and central Asia are using Ireland as a de facto offshore location, according to leaked documents.
The records — dubbed the Pandora Papers — were obtained by the Washington-based International Consortium of Investigative Journalists and shared with 150 news organisations worldwide, including The Irish Times.
The leaked files also include the affairs of more than 330 public officials in more than 90 countries and territories.
The Irish Times reports that an empty office in a serviced office building on Lower Fitzwilliam Street, Dublin 2, is the registered address of more than 800 limited partnerships, a type of legal structure designed to allow investors invest in businesses with limited exposure.
The papers show that the majority of the limited partnerships registered at the address involve partners based in offshore jurisdictions.
They were set up for clients from Russia, Ukraine, and other former Soviet countries.
The people using the partnerships control an entity that is based in an EU member state while keeping their identity secret.
No Irish tax charges are involved as long as the partnerships do not engage in business in the State and the partners are resident outside the State.
The limited partnerships registered at the empty office on Lower Fitzwilliam Street make up one quarter of the total currently registered in the Republic.
The number of limited partnerships in the State has grown ‘significantly’ in recent years, with the bulk of the partnerships having no connection with the Republic, according to The Irish Times.
The Department of Enterprise, Trade and Employment is preparing a new law to update the 1907 Limited Partnerships Act, however, the majority of the submissions it has received relate to the use of the structures by the venture capital and equity investment sector.
The Pandora Papers show that the Czech prime minister, Andrej Babis, put $22 million into a string of shell companies to buy the sizeable Chateau Bigaud, near Cannes, France, in 2009.
Despite a pledge to target tax evasion and corruption, Mr Babis failed to disclose the ownership of the shell companies in the asset declarations he’s required to file as a public official, according to documents obtained by ICIJ’s Czech partner, Investigate.cz.
He has not responded to requests for comment.
A 2020 study by the Paris-based Organisation for Economic Co-operation and Development estimated a minimum of $11.3 trillion is held “offshore”.
The leaked documents show US states play a significant role in offshore-type structures.
Customer assets in South Dakota trusts have more than quadrupled over the past decade, to a figure of $360 billion.
One of the larger trust companies in the state says it has clients from 54 countries and 47 US states, including more than 100 billionaires.
“Clearly the US is a big, big loophole in the world,” said Yehuda Shaffer, a former head of Israel’s financial intelligence unit.
“The US is criticising all the rest of the world, but in their own backyard, this is a very, very serious issue.”
In most countries it is legal to do business in offshore jurisdictions, however, the complexity and secrecy of many jurisdiction means it is possible to avoid scrutiny.