Turmoil broke out when documents emerged detailing the use of offshore tax havens by China´s political elite, including family of current and previous top leaders. But there is no reason to assume this was illegal, says professor Paul Gillis of Peking University at the BBC.
“What I think they’ve documented in this report is the extensive use of offshore tax haven companies by individuals, including many who are connected with the government at fairly high levels,” explains Paul Gillis, professor of accounting at Peking University.
“What it doesn’t tell us is what these companies were actually being used for and whether those purposes were legitimate or illegitimate.”
So are the people named in the leaked documents guilty of anything?
“I think the real concern is if these entities were used to take money that was obtained in illegitimate ways and to hide it outside of China, outside of the jurisdiction of Chinese regulators who might get it, and in ways that evade China’s foreign currency laws and its tax laws,” he said…
“China has adequate laws to regulate this area. It really comes down to enforcement. Likewise, the United States had adequate laws on foreign bank accounts too, but it was unable to enforce them until it was able to force the Swiss banks to disclose who was actually using those accounts,” Paul Gillis said.
New information on those who appear to be involved in offshore banking will soon be released. The ICIJ will soon publish an online list of 37,000 people from China, Hong Kong and Taiwan whose names appear on the leaked documents.
“If the tax bureau does what I expect they’ll do, they’ll take that list and they’ll start asking questions,” Paul Gillis predicts.
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