The International Consortium of Investigative Journalists (ICIJ) has published Mauritius Leaks online, a collaborative investigation by 54 journalists in 18 countries. At the heart of the investigation are more than 200,000 documents alleged to be from the Mauritius office of law firm, Conyers Dill & Pearman.
In a statement, Conyers said it ‘recently became aware that confidential information relating to our former Mauritius office was illegally obtained and sent to reporters working with the International Consortium of Investigative Journalists and other investigative media groups’.
Conyers chairman Christian Luthi was quoted in the company statement as saying: “Conyers strictly adheres to the laws of all the jurisdictions in which we operate and upon which we are asked to advise. The firm does not and will not comment on confidential matters relating to our clients… We have comprehensively investigated Conyers’ information technology infrastructure, and based on our investigations to date we are confident that Conyers’ systems have not been compromised. We take information security protocols very seriously. Conyers’ technology practices regarding data protection and information security meet or exceed current industry standards.”
The law firm is investigating the extent of the data leak ‘as a matter of urgency’ and said that ‘only a limited number of files from our former Mauritius office were taken’. The documents include emails, contracts and business plans from major players in financial services and law, including accountancy group KPMG and law firm Clifford Chance. In fact, KPMG, PricewaterhouseCoopers, Deloitte and EY all have offices on Mauritius. The ICIJ said it approached KPMG and that while the firm did not comment on specifics, it said its ‘tax professionals act lawfully’ and ‘with integrity’.
The ICIJ says the documents reveal attempts by corporations and individuals to exploit tax rules that allow them to avoid taxes of such countries as Egypt, Mozambique and Thailand.
Conyers ceased operations in Mauritius on 1 April 2018, selling the business to three former employees who now operate as Venture Law Limited. Venture Law has engaged a third-party data security company and launched its own investigation to determine the scope of the issue and has reported the matter to the relevant authorities in Mauritius.
ICIJ claims Mauritius allows multinationals to route investments through ‘resident’ shell companies, which pay an effective corporate income tax rate of 3% or less, to avoid paying substantially higher taxes in other countries. ICIJ has published details of more than 200 companies, whose names appeared in its investigation, saying it is doing so in the public interest.
Mauritius is among 34 tax jurisdictions that has taken steps to avoid being blacklisted by the European Union in 2020 under its listing process. The work is due to be completed by the end of 2019. At the end of 2017, Mauritius was put on the EU ‘grey list’ of non-cooperative jurisdictions because of its ‘Global Business Company’ tax regime.
Molly Scott Cato, MEP, a past member of the European Parliament’s Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), commented: “Mauritius’ claim to be compliant with international standards has been shown to be a sham. While many small African businesses are paying taxes, wealthy corporations operating in some of the world’s poorest countries are avoiding paying their fair share.”
KPMG has been approached for comment.