[Revised version – thanks to Lucia Cizmaziova for pointing that I had mistyped the ICIJ data for the UK and Denmark – my spreadsheet is here]

Three years ago the International Consortium of Investigative Journalists (ICIJ) revealed that 11.5 million documents had been leaked from the Panamanian law firm Mossack Fonseca. Recently they toted up the numbers from 22 countries on revenues recovered.

The total comes to $1.2 billion. This figure will include tax settlements covering several years as well as penalties. Currently it amounts to 0.01% of GDP of those countries. There will be other cases still unsettled, so more money will come in. And of course these figures only includes the direct revenues collected as the result of investigations. There are also likely to be additional revenue resulting from broader behaviour changes by taxpayers and from policy changes brought in the wake of the scandal.

Which countries found money?

The UK, Germany, Spain and France found the most money, followed by Australia, Colombia and Ecuador.  ICIJ reports that the UK has recovered $252 million (although this seems to be the  yield according to HMRC).   France was said to have investigated 415 individuals and recovered $136 million. Other countries such as Canada and South Korea have previously reported audits underway, but are not included in  the ICIJ list.

Panama Papers Revenue, $ millions 

Which countries’ citizens hid most of their money?

That bigger countries recovered more money is not surprising, but as a percentage of GDP, it is the smaller countries Iceland, Malta, and Ecuador which stand out as having a greater proportion of their national product discovered as untaxed earnings hidden offshore.

Panama Papers Revenue, % of GDP 

How excited should we be about spending the money on public services?

Estimates of “offshore billions” are often converted into expectations about the number of nurses, schoolteachers or hospitals they could fund. But the sums related to the Panama Papers investigations are pretty small in terms of the public spending they could fund in most countries. Only in Iceland and Malta would they buy more than a cup of coffee per citizen.

Of course the investigations linked to the Panama Papers are not the totality of offshore evasion. But these figures certainly don’t support popular hopes of massive sums. Overall HMRC say that they have raise £2.9 billion from cracking down on offshore evasion since 2010 – this is about £5 per citizen per year.

Panama Papers Revenue, $ per citizen

What does it tell us about offshore finance 

The original ICIJ investigations of the Panama Papers was a process of searching for ‘needles in the haystack’;  corruption, crime and celebrities hidden in obscure shell companies. Less headline-making, but also important is understanding what the Panama Papers might tell us about the haystack itself – the nature of offshore finance in general.

Mossack Fonseca’s efforts at ‘know-your-clients’ were revealed to have been chaotic and deficient, and more illegality was found in their files than in  the later ‘Paradise Papers’. In other words the Panama Papers trawl the dodgier end of the market.  

While we don’t know how many cases have been settled in each country, there is an interesting pattern. The countries with the largest number of entities tagged in Panama Papers database have so far collected relatively smaller amounts of revenue per entity. Whereas countries with fewer entities in the database tended to recover more revenue per entity  (suggesting a higher rate of dodgy entities in these small samples).

Number of entities and revenue recovered per entity

Perhaps the  companies and trusts in the Panama Papers database associated with the international financial centres such as UK and Luxembourg are functionally different from those entities in countries with the smaller samples?

Another potential reason for the different amounts each country has recovered is the amount of effort they have put in, and the amount of information they had access to. Germany paid $5.7 million to an unidentified source to access the full trove of documents, and Denmark is also  known to have paid for access to the full documents. Whereas it seems that investigators in other countries, including the UK’s HMRC only had access to more limited online database of entities, officers and intermediaries, rather than private emails between individuals and the legal firm.

Addition (following a comment from David Lesperance on Twitter)

How does this compare to Gabriel Zucman’s estimates of missing revenue from offshore wealth?

Gabriel Zucman famously estimates that countries are losing $190 billion a year from offshore tax evasion, which is the kind of thing being clamped down on in these investigations. I’ve looked at these estimates before (with Iain Campbell) and I think they are too high (they assume that 80% of offshore wealth goes undeclared).

The 22 countries covered by the ICIJ figures are worth about 20% of global GDP so, very roughly,  taking Zucman’s $190 billion offshore tax evasion estimate, we might expect something in the region of $40 billion related to these countries if the $190 billion estimate is in the right ballpark. The proof in the Panama Papers pudding that only  $1.2 billion has been collected in practice (and this represents several years and penalties) is a datapoint which supports caution about the Zucman estimate.