[JURIST] A UN human rights expert on Friday called on [press release] the international community to put an end to financial secrecy in wake of the recent release of thousands of confidential financial documents known as the “Panama Papers” [materials]. UN Independent Expert on foreign debt and human rights Juan Pablo Bohoslavsky [official profile] stated that secrecy revealed by documents such as the Panama Papers, which expose how various wealthy people and politicians systematically hide assets in offshore accounts, can have dire effects on society and the wolrd economy. He said:

Tax evasion and the flow of funds of illicit origin undermine justice and deprive Governments of resources needed for the realization of economic, social and cultural rights. … The clients may have had different motives for depositing their assets into more than 210,000 secret shell companies. But tax evasion, hiding corruption and criminal funds appear to be a prominent reason.

Bohoslavsky also noted [UN News Centre report] that shell corporations have been used in the past for drug trafficking, illegal arms trades and even authoritarian rulers’ violations of human rights.

The Panama Papers [Guardian backgrounder] are a collection of more than 11.5 million documents that were leaked last week from the fourth largest offshore law firm in the world, Mossack Fonesca [firm website]. The documents reveal how wealthy individuals can utilize offshore tax regimes to their benefit. The clientele of the firm include many of the world’s richest individuals, celebrities, and politicians. The documents allegedly illustrate [JURIST report] how Mossack Fonseca laundered money and helped their wealthy clients avoid tax consequences and dodge sanctions. It is reported [BBC report] that 12 heads of state are among those implicated by the Panama Papers, and Iceland’s prime minister has already resigned his post as a result of the leak. Mossack Fonseca has denied any wrongdoing, claiming they were the victim of a data breach and that they have not engaged in any illegal activity.