布鲁金斯学会-从泄露的账户数据中可以看出精英如何使用离岸银行（英文）-2021.5-55正式版

Whatliesbeneath

Evidencefromleakedaccountdata

onhowelitesuseoffshorebanking

MatthewCollin

GLOBALWORKINGPAPER#156

MAY2021

Whatliesbeneath:evidencefromleakedaccountdataonhowelitesuseoshorebanking

MatthewCollin

BrookingsInstitutiony

May5,2021

Abstract

ThispaperusesaccountdataleakedfromanIsleofManbanktoinvestigatethecharacter-isticsofindividualsandrmsthatstoretheirmoneyintaxhavens.Usinginternaldocumentsthatassigntheultimateownershipofcompaniesandtruststhathelddepositsatthebank,Iestablishthreethings:rst,mostcustomersarefromrichcountriesandarelikelytobefromtheupperendoftheincomeandwealthdistributionsofthosecountries.Second,Ishowthatanon-negligibleamountofoshorewealthisconnectedtoasmallnumberofpoliticalelites(socalledpolitically-exposedpersons).Onaverage,theseaccountshavesubstantiallyhigherbal-ancesandaremorelikelytoreceivepaymentsfromothertaxhavens,whichisconsistentwithpolitically-exposedpersonshavingaccesstomoreresourcesthantheaverageoshoreclientwhilealsodesiringtoobscurethatownership.Finally,Ishowthatasubstantialproportionofbankdepositsareobscuredfrompublicly-availablestatisticspublishedbytheBankofInter-nationalSettlementswhicharecommonlyusedtomeasureoshorewealth.WhenIcorrectlyassigndepositstotheirultimatebenecialowner,oshorebankdepositsownedbyresidentsoftaxhavensdropsbyupto32%anddepositsheldbyresidentsofnon-havensdoubles.Iconcludewithrecommendationsonhowreportingrequirementsneedtochangetoimprovetheabilityofregulatorsandtheresearchcommunitytodetectandcounterillicitnance.

JELclassication:D73,E21,H26,H87

Email:mcollin@.IwouldliketothankSydneyGordon,NielsJohannesen,AndreasKern,HomiKharas,DominikaLangenmayr,JakobMiethe,BobRijkers,JasonSharman,JustinSandefur,JaredSchott,BarbaraStage,DavidSzakonyi,GerhardToews,EmileVanDerDoesDeWilleboisandPierre-LouisVezinafortheirhelpfulcommentsandsuggestions,ArunAdvaniforprovidingtheUKwealthdistributiondata,FriedrichLindenbergattheOCCRPandbothLouisGoddardandSamLeonatGlobalWitnessforusefulconversationsaboutthedata.Allerrorsaremyown.Theresultsinthepaperareestimatesusingdatathathasbeenmadeavailablethroughtheleak,buttheyshouldnotbeviewedasdenitivestatementsofanyunderlyingnancialaccountsoractivity.Thementionofanyindividual,company,organization,orotherentityinthispaperdoesnotimplytheviolationofanylawontheirpartandshouldnotbeconstruedassuch.ThispublicationwasmadepossiblebytheDavidM.RubensteinfellowshipattheBrookingsInstitution.Brookingsrecognizesthatthevalueitprovidesisinitsabsolutecommitmenttoquality,independence,andimpact.Activitiessupportedbyitsdonorsre

ectthiscommitmentandtheanalysisandrecommendationsarenotdeterminedorin

uencedbyanydonation.

TheBrookingsInstitutionisanonprotorganizationdevotedtoindependentresearchandpolicysolutions.Itsmissionistoconducthigh-quality,independentresearchand,basedonthatresearch,toprovideinnovative,practicalrecommendationsforpolicymakersandthepublic.TheconclusionsandrecommendationsofanyBrookingspublicationaresolelythoseofitsauthor(s),anddonotre

ecttheviewsoftheInstitution,itsmanagement,oritsotherscholars.

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Introduction

Wealthcantravelaroundtheworldwithrelativeease,butagovernment’sabilitytokeeptrackofitislargelyconnedtoitsownborders.Itisthisinformationasymmetrythatgivesrisetoahostofproblems,therstofwhichistheabilityofpeopletoevadetaxationbyparkingtheirwealthinotherjurisdictions,awayfromthepryingeyesofthetaxauthority.Recentevidencesuggeststhatrandomauditsofwealthyindividualsroutinelyunderestimatetaxevasionbythosewhokeepsomeoftheirmoneyoshore(Alstadster,Johannesen,andZucman2019a;Guyton,Langetieg,Reck,Risch,andZucman2021).Notonlyistheamountofoshorewealththatgoesundeclaredtotaxauthoritieslikelytobesubstantial(Alstadster,Johannesen,andZucman2018),thefactthatthericharemorelikelytoengageinthisbehavior(Alstadster,Johannesen,andZucman2019a;Londo~no-Velezand

Avila-Mahecha2021;Lejour,Rabate,van’tRiet,etal.2020)suggeststhateortstocurbinequalitythroughtaxationbeineectiveuntilauthoritiesimprovetheirabilitytoobservetheirtaxpayers’worldwideincomeandwealth.

Asecond,interrelated,problemisthefactthatpoliticalelitesandtheirassociateswhowishtoabusetheirpublicoceorpoliticalpowerforprivategaincanpullthisomoresuccessfullywhenthegainsareaccruedoshore.Itiseasiertodenyyouhaveamassedalotofwealthwhileinocewhenyourgovernmentlackstheabilitytoobservewhatyouownoverseasandthereisnolocal,conspicuouspotofmoneythatsomeonecanpointto.Thisbehaviorisrifeenoughtobeobservableininternationalstatistics:whenhigh-corruptioncountriesreceiveanin

uxofoil-revenueorforeignaid,oshorewealthownedbyitsresi-dentssurges(Andersen,Johannesen,Lassen,andPaltseva2017;Johannesen,Andersen,andRijkers2020).

Thepresenceofoshorenancialcenters(OFCs)-colloquiallyknownastaxhavens-complicatestheinformationasymmetryproblemevenmore.Historically,manyhavenshaveoeredbothalowleveloftaxationandahighdegreeofnancialsecrecy:lawsandpoliciesthatmakeverydicultforanyone,governmentsincluded,tounderstandwhoownswhat.Ironically,themostconcreteevidencethatmanyOFCshaveactedashavensfortaxevadershasbeengeneratedbytheirgradualembraceoftransparency:severalstudieshaveshownthatforeigndepositsheldinthesejurisdictionsdeclinesharplyaftertheysignagreementstoshareinformationonthesedepositswithforeigntaxauthorities(JohannesenandZucman2014;Beer,Coelho,andLeduc2019;MenkhoandMiethe2019;O’Reilly,Ramirez,andStemmer2019;Casi,Spengel,andStage2020).Today,traditionalsmall-islandhavenshavebeenjoinedbysomeoftheworld’sbiggesteconomies-suchastheUS-asthedestinationforuntaxedandcorruptwealth(VanderDoesdeWilleboisetal.2011;Findleyetal.2014;

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Casietal.2020).Inbotholdandnewdestinationsofillicitnance,multiple,overlappinglegalstructuresthatobscurethetrueownerofwealth(suchasshellcompaniesortrusts)areacommonmeanstomaintainingsecrecy.

Researchersfacethesameinformationasymmetryproblemthatgovernmentsdo:ourattemptstounderstandhowpeopleevadetaxandhowtheyengagewiththeoshorenancialcenterarehamperedbythefactthatmostofthisbehaviorishiddenbyitsverynature.Mostresearchthusreliesoneitherpublicly-available,aggregatestatisticsorcondentialdatafromtaxauthoritiestounderstandhowtheoshoreworldfunctionsandhowtaxpayersinteractwithit.Theseapproachesarehighlyuseful,buttheyarealsoincomplete:tryingtounderstandwhatishappeningtooshorewealthviathesemethodsisanalogoustosittingonaboatandinferringwhatishappeningunderwaterbyobservinghowthewaveschange(orsporadicallyinterviewingpeoplewhoswimtothesurface).

Occasionallythoughwegetapeekbeneaththewaves:overthepastdecadetherehasbeenasurgeinhigh-proleleaksofdatafrombanksbasedintaxhavensandfromtheserviceprovidersthathelppeopleandcompaniesorganizetheiraairsoshore.ThemosthighproleofthesewastheleakofcustomerinformationfromthePanamanianlawrmMossackFonseca(thePanamaPapers).Theseoeranunprecedentedopportunitytobetterunderstandhowpeoplehidetheirmoneyintaxhavens.Yet,possiblybecausetheyareoftenlimitedinboththeirscopeandinwhattheycanmeasure,fewstudieshavereliedonaggregateddatafromtheseleakstodirectlyunderstandtheimpactofpolicy(seeCaruana-GaliziaandCaruana-Galizia(2016)andOmartian(2017)forexamplesofthosethathave).1

Thispapertakesalongdivebeneaththesurface:itusesdataleakedfromabankincorporatedintheIsleofMan-onethatwasapopulardestinationforhighnetworthindividuals-tobetterunderstandwhoholdstheirmoneyinoshorenancialcentersandhowwellourmethodsofmeasuringitmaybeworking.Theadvantageofusingleakeddataisthat,inmanyinstances,itallowsmetopeerthroughtheopaquelegalstructuresthatdominatethenancialindustrytoestablishtheownersofalargeshareofaccounts,asrecordedbythebank.

Indoingso,Iestablishthreedescriptiveresults.Therstisthattheclientsofoshorebanksarelikelytoberich,bothinthattheyresideinrichcountriesandthattheyarelikelytobefromtheupper-endoftheincomeandwealthdistributioninthosesamecountries.

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Inadditiontothese,Londo~no-VelezandAvila-Mahecha(2020),Londo~no-VelezandAvila-Mahecha

(2021)and(Alstadster,Johannesen,andZucman2019a)matchnamesfromtheseleakstoadministrativedata,butmostoftheiranalysesdonotexploitthestructureofthePanamaPapersdatainanysubstantialway

(althoughLondo~no-VelezandAvila-Mahecha(2020)doesuseinformationonthedateanoshorecompanywasincorporatedtostudytheeectsofmovingwealthoshoreonwhatgetsreportedtothetaxauthoritybackhome).

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Whilethisisnotanovel,earth-shatteringnding,itreinforcesgrowingevidencecomingoutofanumberofcountriesthatoshorebankingisaluxuryserviceandthus,totheextentthatitisbeingusedtoevadeoravoidtax,ithasmajorimplicationsfortheabilityofsocietiestoghtinequalityandraiserevenuethroughprogressivetaxation.

Thesecondisthatasignicantshareofoshoredepositsarecontrolledbyclientswhoareconnectedtopolitically-in

uentialpeople,suchascurrentandformerpoliticians,theirfamilyandfriends.Anumberofthesearefromcountriesthatscorepoorlyonpopularmeasuresofcorruptionrisk.Thesepolitically-exposedclientsnotonlyholdgreateramountsofwealththantheaverageoshoreclient,buttheyarealsomorelikelytohaveanaddressinataxhavenandaremorelikelytoreceivemoneyintotheiraccountsfromaccountsinothertaxhavens,allsignsthatsignicantlyraisetheriskthattheseclientshaveaccesstohigherlevelsofwealthandaremorewillingtoengageinactivitythatobscurestheirownershipofit.Thisisdespitethefactthattheseclientswereallsuccessfullyidentiedandweremonitoredbythebankinquestion.

Thethirdresultisthatthelegalarrangementsthatmostcustomersofoshorebanksusedtoorganizetheiraairs,shellcompaniesandtrusts,interferewiththeabilityofpopularmeasuresofcross-borderliabilitiestomeasureoshorewealth.AgrowingamountofworkonthelevelanddeterminantsofoshoredepositsreliesondatafromtheBankofInternationalSettlements’sLocationalBankingStatistics(BISLBS),whichassignsownershipofdepositsbasedontheimmediatecounterparty.Inpractice,thismeansthatdepositsownedbyshellcompaniesbasedintaxhavenswillbeassignedtothosehavens,ratherthantothelocationoftheultimateowner,alimitationwidelyrecognized(andoccasionallyexploited)byresearchersworkinginthisspace(JohannesenandZucman2014;Casi,Spengel,andStage2020).UsingdataontheultimateownerofbanksdepositsfromtheleakcombinedwithreportspreparedfortheLBS,Ishowthatoverhalfofdepositsarecontrolledbyentitiesbasedintaxhavensandthatmanyoftheseareincorrectlyassignedasbeinghavendeposits,despitebeingcontrolledbyresidentsofnon-havenjurisdictions.Thisnotonlyimpliesthatourmeasuresofnon-bankcross-borderliabilitiesmaybedistortedbythepresenceoftaxhavens,itmightalsobiasstudiesontheimpactoftransparencyinitiativesinwaysthatarehardtobound.

Thepaperisorganizedasfollows:inSection2,IdiscusstheIsleofMan’sroleintheo-shorenancialsector,thedatabreachthatIrelyonforthispaper,andaggregatedescriptivestatisticsonboththeclientsandtrendsindeposits.InSection3Idiscussthedistributionofclientsacrosscountriesandtheirlevelsofwealth.Section4presentstheresultsonaccountsmaintainedbyclientswithconnectionstopolitically-in

uentialpeople.Section5discussestheresultsonthemeasurementofoshorewealth.IdiscusspotentialpolicysolutionsandconcludewithSection6.

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Backgroundanddata

2.1 TheIsleofMan

TheIsleofManisoneofthreeBritishCrowndependencies,self-governingjurisdictionssitu-atedaroundtheBritishIsles.Ithasbeenclassiedasan\oshorenancialcentre"(OFC)bytheInternationalMonetaryFund(IMF),adesignationforjurisdictionsthathaveabankingsectorlargelyorientedtowardsnon-residents,veryhighlevelsofexternalassetsandliabilitiesrelativetothesizeoftheeconomy,andservicesthatmakethemparticularlyattractiveforforeignwealthandprots,suchaslowlevelsoftaxation,regulationortransparency.2Withtheexceptionofbankingandretailbusinessesbasedontheisland,whicharetaxedat10%,mostcorporateincomegoesuntaxed.3Topmarginalincometaxratesforresidentsare20%.

Thejurisdictionisconsideredbymanytobeataxhaven.TwodecadesagotheOECDlisteditassuchinaneorttogetittocommittoexchangeofinformationfortaxpurposes(OECD2000).Intherstpublicationofitsmostrecent‘grey’and‘black’lists,theEuropeanUnion

aggedtheIsleofManfor\existenceoftaxregimesthatfacilitateoshorestructureswhichattractprotswithoutrealeconomicactivity."Itranks20outof70inthelatesteditionoftheTaxJusticeNetwork’sCorporateTaxHavenIndex(Atesetal.2020)and43outof133initsFinancialSecrecyIndex(TaxJusticeNetwork2020),twomeasuresaimedatunderstandinghowpopularajurisdictionisforhidingone’swealthorforprotshifting.

Likemanyoshorenancialcenters,theIsleofManhasadoptedanumberofpoliciesoverthepastdecadeaimedatcurbingthesebehaviors,includingmanyofthe‘minimumstan-dards’proposedbytheOECDaspartofitsBaseErosionandProtShifting(BEPS)projectaswellasvariousformsofautomatic-exchange-ofinformationfortaxpurposes(AEOI).Fortheformer,itisunclearatthisstagewhetherthishadmadeamajordentinprotshifting:Trslv,Wier,andZucman(2020)calculatethatin2015nearly80%ofthe$3.1billionincorporateprotsthatwerebookedontheIslewerearticially-shiftedprots.TheIslealsocontinuestoberelativelyattractivetoforeignbanks:asofDecember,2020,over60%ofthenumberofactivebanksinthejurisdictionareforeignbankswithnolocalincorpora-tion.Usingdatafromcountry-by-countryreporting(CbCr)reportsfromEUbanks,Delatte,Capelle-blancard,andBouvatier(2021)showthattaxhavensaccommodatethreetimesasmanyforeign-ownedbanksasotherjurisdictions.

Despitethis,therearesignsthatoshorebankingisonthewane,asthepastdecadehasseenasteadydeclineinbankingdepositscontrolledbyforeigners.Figure1(a)displays

2TheIMFhassinceretiredthetermOFC,afterintegratingitsOFCassessmentprogramintoitsFinancialSectorAssessmentProgram(FSAP).

BusinessesareonlytaxediftheymakemorethanhalfamillionGBPinprotinagivenyear.

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thesumofallnon-bankcross-borderdepositsasmeasuredbytheBIS’sLocationalBankingStatistics.4.Foreign-owneddepositshavebeendecliningsteadilysincethenancialcrisis,atrendthatislikelyattributabletoanumberoftransparencyregimesadoptedbytheIsleofManduringthisperiod.Thisincludesthesigningofanumberoftaxexchange-of-informationonrequestagreementsandthearrivalofboththeUS’sForeignAccountTaxComplianceAct(FATCA)andtheOECD’sCommonReportingStandard(CRS)fortheautomaticexchange-of-information,allpoliciesaimedatallowingforeigntaxauthoritytobetterobservewealthbeingheldontheIsle.Irrespectiveoftheacronym,eachoftheseinitiativeshasbeenshowntohaveacausalimpactontheamountofoshoredepositscontrolledbyforeigners(JohannesenandZucman2014;Beeretal.2019;MenkhoandMiethe2019;O’Reillyetal.2019;Casietal.2020).TheBISalsocollectsinformationonlocallyheldnon-bankdeposits-moneycontrolledbypeopleandentitiesregisteredasbeingintheIsleofMan.Thesesawasharpriseintheearly2010s,aroundthetimemanyofthesetransparencyinitiativeswereadopted.Thismaybedriveninpartbytheuseofoshorecompaniesorentitiesliketruststoobscuretheownershipofbankdepositsfromthepryingeyesofforeigntaxauthorities.

AnotherfeatureoftheIsleofMan’sbankingsectoristhesteadydeclineinthenumberofdeposit-takinginstitutionsoverthepasttwodecades.Figure1(b)showshow,since2004,thenumberofbankshasdeclinedfromnearly60to11.Thishasledtoaconcentrationinthemarketforoshoreservices.Thedistributionofforeigndepositsacrosstheseelevenbanksisnotavailable,buttheaverageamountofdepositsheldbyeachbankhasincreasedsinceadecadeago.

2.2 Leakedcustomerdatafromanoshorebank

OnNovember16th,2019,thejournalistcollectiveDistributedDenialofSecrets(DDOS)

announced

ithadmadeavailabledataobtainedfromtheCaymanNationalBankandTrust,IsleofMan(henceforthCNBIOM)asubsidiaryoftheCaymanIsland-basedCaymanNationlCorporation.ThedatahaspurportedlybeenobtainedbyahackerorhackercollectiveknownasPhineasPhisher,whohackedCNBIOMandturnedoverthedatatoDDOS.5

DDOSdubbedtheleaks\Sherwood"andmadeCNBIOM’sdataavailabletothepublicintwoformats:onewasasearchabledatabaseoflesande-mailshostedontheir\HunterMemorialLibrary"platform,asearchenginewherelescanbelookedupviatheircontents.6Thesecondformatwastheleakeddatainitsentirety:thecontentsofseveraldozenharddriveimagestakenfromCNBIOM’sservers.

Printerfriendlyversionsofallguresandgraphscanbefound

here

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https://unicornriot.ninja/2019/massive-hack-strikes-offshore-cayman-national-bank-and-trust/

6TheHunterMemoriallibrarywasavailableat

/

untilJune,2020.

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Figure1:TrendsintheIsleofMan’soshore nancialsectorovertime

(a)Non-bankdepositsovertime

(b)Numberofbanksinoperation

Source:Figure1(a)showsthetotalamountofnon-bankcross-borderliabilities(deposits)recordedbytheBankofInternationalSettlementsinits

LocationalBankingStatistics

fortheIsleofMan,comparedwiththetotalamountoflocalnon-bankliabilities.Figure1(b)showsthetotalnumberofbanksinoperationintheIsleofMan.Thedottedlineareestimatestakenfromarchivesofthenow-defunctFinancialSupervisionCommission’swebsiteusingtheInternetArchive’s

WaybackMachine

,estimatesfrom2010andonwardarereporteddirectlybytheIsleofMan’sFinancialServicesAuthority(FSA)intheirQuarterlyStatisticalBankingBulletin.

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ThoseharddriveimagescontainedbothworkingdocumentsmaintainedbyCNBIOMstaaswellassnapshots,from2016and2019ofthedatabasesthebankusedtomaintainitscustomerrecords.FromthosedatabasesIhavereconstructedmonthlyandquarterlyaccountestimates,inUSD,foreverycustomerfrom2008untillate2019.7Icanalsoobservethedateofeachaccount’sclosure,aswellasthedatewhenanygivencustomerclosestheirlastaccountwiththebank.Icanalsoobserveprecisechangestoaccountbalances:forexample,whetheranincreaseinthebalanceisduetointerest,capitalgains,wiretransfersinandout,orinter-accounttransfers.However,exceptfora14monthperiodbetweenmid-2018and2019,Iamunabletoobservetheoriginatingordestinationjurisdictionforwiretransfers.

Inadditiontoaccountbalances,thedataalsocontainsup-to-daterecordsonmanydier-entcharacteristicspertinenttoeachclient’staxjurisdiction.Theseincludecorrespondenceaddresses,‘domicilia’indicators(e.g.passports,taxidentiernumbers,reportedbirthlo-cations)andregisteredbenecialownersandbeneciaries(forcompaniesandsometrusts).Thereisalsoaregisterofpolitically-exposedpersons(PEPs)andhighproleindividuals(HPIs)thatCNBIOMmaintainedtokeeptabsonthosewhowerepotentiallyhigher-riskclients.InthatregisterarelistsofPEPs/HPIs,theirnationality,thedatetheywereidentiedandthetheclientstheyareassociatedwith.

Inadditiontocustomerdata,inthelesleakedfromCNBIOM’sserversarequarterlyreportspreparedbythebankfortheBIS’sLocationalBankingStatistics(LBS).TheLBSaggregatesinformationfrom49reportingjurisdictionsonforeignclaimsandliabilitiesfromover200counterpartjurisdictionsaroundtheworld.Itformsthebasisofmostcross-countryanalysesoftheimpactofinformationexchangeonoshorewealth(JohannesenandZucman2014;MenkhoandMiethe2019;Beer,Coelho,andLeduc2019;O’Reilly,Ramirez,andStemmer2019;Casi,Spengel,andStage2020).

Importantly,theleakeddataincludesdetailedExcellesthatCNBIOMstaappearedtousetocompileBISreportsfromitsunderlyingcustomerdata.ThisallowsmetounderstandnotonlyhowmuchoshorewealthCNBIOMassignstoFrance,forexample,butitallowsmetoobservepreciselywhichcustomersthebankassignedtoFrancewhencompilingitsreports.ThusIcanexperimentwithhowchangingthisassignmentdecisionmightaectthestatisticsbeingreported.Thebankappearedtouseits‘default’jurisdictionforallofitsclients,whichinmostcaseswasthesameasacustomer’sprimaryaddress.However,Icaninsteadinvestigatehowusingthejurisdictionofanaccountsbenecialownertoassignownershipwouldchangeaggregatereporting.Thisallowsmetolookfurtherintothesource

7WhilemostcustomersholdaccountbalancesinGBP,manyholdavarietyofdierentcurrencies.UsingexchangeratesmaintainedbytheBankofInternationalSettlements,IhaveconvertedallbankbalancesintoUSD.TheseareveryclosetoCNBIOM’sownexchangerates-butoermorecompletecoverageofthecalendaryear.

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ofownershipthanBISstatisticsarenormallyallowedtoandinvestigatehowthewaythatbanksclassifytheirclientsmightaectestimatesoftheimpactofAEOI,butalsoaggregateestimatesofoshorewealth.

Amoresubstantivebreakdownofhowdatawasprocessedisdescribedinthe

Online

Appendix

.Withtheexceptionofpersonswhohavealreadybeenidentiedinmediastories,nocustomer-identiableinformationisreportedinthispaper,norintheappendix.

Analdisclaimer:theresultsinthispaperareallestimatesusingvariousdatasourcesavailableintheleak,combinedandaggregatedinamultitudeofdierentwaysinagoodfaitheorttoreplicateascloseaspossibletheactualaccountdetailsandcharacteristicsoftheunderlyingcustomerbase.8Butasrecentevidenceasshown,twodierentresearcherscanmakesmall,seemingly-innocuousdecisionswhichcanleadtodierentestimates(Huntington-Kleinetal.2020).Becauseofthis,theresultsinthispapershouldbetreatedasestimates,andnotdenitivestatementsabouttheaccountsofCNBIOM.

2.3 Theethicsofusingleakeddata

Theuseofleakeddatainacademicandpolicypublicationsisbecomingmorecommon,particularlyinthespaceofcross-bordertaxevasionandcorruption.RecentexamplesincludeCaruana-GaliziaandCaruana-Galizia(2016),Omartian(2017),Alstadster,Johannesen,

andZucman(2019a)andLondo~no-VelezandAvila-Mahecha(2020)’suseofbothaggregateandindividual-identiableinformationinthePanamaPapers,andMironovandZhuravskaya(2016)’suseofleakedbanktransferdatafromRussia.Despitethis,mostpublicationsdonotactivelyexploretheethicalconsiderationsofitsusenorciteeortstoreducepotentialharms(Thomas,Pastrana,Hutchings,Clayton,andBeresford2017).InthissubsectionIconsiderthereasonswhyIbelievetheuseofthisdataisethical.Foracompleteethicsstatementwhichdelvesintoallpossibleconsiderations,pleaseseethe

OnlineEthicsStatement

.

Thisresearchprojectispredicatedonthefactthatthereisaverystrongpublicinterestargumentfortheuseofdatathatbetterhelpsusunderstandhowtaxhavensandtheirclientsoperateandthedegreetowhichpoliciesaimedatcurbingtaxevasionandavoidanceareworking.Taxrevenueisusedtofundpublicservices,andbymostaccountsisacrucialbuildingblockofawell-functioningsociety.Recentestimatesputtheamountofoshorewealthbeingheldintaxhavensatroughly8%ofallhouseholdwealth(Zucman2013).Untiltheadventofautomatic-exchange-of-informationagreements,muchofthiswealthwent

Forexample,asdescribedinthe

OnlineAppendix

,IamunabletoexactlyreplicatethecustomerdepositbalancesthatCNBIOMreportsinitannualnancialstatements,althoughmyestimatestypicallyfallwithinafewmilliondollars.Thesedierenceswillbedriventodierentexchangeratesbeingapplied,smalldierencesinthebaseexchangerateforsomeclientaccounts,anddierentdecisionsoverwhichaccountsarebeingincludedinthoseheadlinenumbers.

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unreportedtotaxauthorities,whostruggletodetectoshoreearningsevenwhenauditingtaxpayers(Alstadster,Johannesen,andZucman2019a).Itisonthestrengthofthepublicinterestrationalethatseveralmediaoutletsandcivilsocietyorganizationshaveseenitttodownload,analyzeandreportonthisdata,including

TheGuardian

,the

HYPERLINK"/en/i