Last month, Denmark’s government became the first national government in the world to purchase data from the Panama Papers leak. The small Scandinavian country is reportedly planning to use the data to investigate the roughly 500 Danes named in the paper in order to ascertain whether they have evaded their tax obligations. It has been reported that the documents contain very specific information about specific cases, in addition to providing insight into the strategies Danish citizens have used to evade taxes.
Karsten Lauritzen, Denmark’s tax minister, said that an anonymous source got in touch with the government several months prior about the possibility of the country purchasing documents from the leak. “Everything suggests that it is useful information. We owe it to all Danish taxpayers who faithfully pay their taxes,” Lauritzen said. He explained that although he was initially quite wary about the offer from the unnamed source, it was determined that “the material contains relevant and valid information about several hundred Danish taxpayers.”
To prove the worth of the information, the source allegedly provided an initial sampling of documents leaked from the Panama-based Mossack Fonseca law firm at the center of the leak, which the government then reviewed. The authenticity of the documents was verified and it was deemed that the information contained in them could be of use to the government. It remains unclear who the source is, as he or she communicated with the Danish government solely through encrypted channels.
“The source sent us a ‘sample,’ which we got people to study over the summer holidays. This convinced us of the quality of the documents. They are real and they contain information that is very relevant to us,” explained Jim Sørensen, a divisional tax chief. “They are about specific individuals. They also provide super-interesting information about the methods used by advisors and intermediaries. They can give us a breakthrough in the investigation of tax havens. We have the impression that the source has extremely good insight into everything the press writes in Denmark, and is very well informed about what is going on.”
Back in September, the Danish government had specified that it would be willing pay up to DKK 9 million ($1.3 million) for the information. The deal closed at the beginning of October, at which point is was revealed that the government had paid about DKK 6 million ($900,000).
Other countries, including the UK, have asked journalists to give tax authorities access to the Panama Papers so that they can investigate incidences of tax evasion, requests that have been routinely denied. Denmark’s purchase does raise the possibility that other European governments may also be discreetly buying data on their own citizens. In 2014, for example, the German government paid about €1 million ($1.1 million) for information on German citizens that was revealed in a much smaller Mossack Fonseca leak. Germany subsequently conducted a number of raids on Commerzbank customers who were suspected of evading taxes.
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