The Paradise Papers, a set of leaked documents concerning offshore investment of more than 120,000 individuals and companies, began to be released on November 5, 2017.
The leak included more than 13.4 million confidential documents that included the names of many prominent figures in the world including Prince Charles, Queen Elizabeth II, and the President of Colombia Juan Manuel Santos. Among those named, 15 to 16 Mongolian individuals and companies were included.
The leaks originate from the law firm Appleby, an offshore legal services provider, who says that a serious criminal act took place and their systems were “accessed by an intruder who deployed the tactics of a professional hacker.” The documents were initially leaked to the German newspaper Suddeutsche Zeitung which collaborated with the International Consortium of Investigative Journalists (ICIJ) to compile and publish the individuals and companies named in the document.
The documents revealed offshore interests of the queen of England and more than 120 politicians around the world. It also exposed ties between Russia and US President Donald Trump’s commerce secretary, the secret dealings of chief fundraiser for Canadian Prime Minister Justin Trudeau and tax engineering of more than 100 multinationals, including Apple, Nike and Uber, according to ICIJ.
Just as the leak of the Panama Papers did, the Paradise Papers have prompted public criticism and allegations of tax evasion and illegal dealings. As a result ICIJ put out a disclaimer that “there are legitimate uses for offshore companies and trusts”, and it does not “intend to suggest or imply that any people, companies or other entities included in ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly”.
It also said that many people and entities may have similar names and suggested that the identities of those named in the database should be confirmed based on addresses or other identifiable information.
Of the 16 Mongolian individuals and companies named in the papers, one which has caught the attention of the Mongolian media is Battushig Batbold, chairman of the board of directors of Altai Holding LLC, Skytel Group and Sky Hypermarket LLC (Emart Mongolia).
Battushig Batbold was listed as a shareholder and beneficial owner of Future Monson Holdings Limited, incorporated on January 20, 2010. While it is common for executives and business owners to have offshore accounts as evidenced by both the Panama Papers and the Paradise Papers, what makes the new revelation significant is that Battushig Batbold’s father is current member of Parliament Batbold Sukhbaatar, who served as the Prime Minister from 2009 to 2012 and as the general secretary of the Mongolian People’s Party.
While it has not been confirmed that it is in fact Battushig Batbold, many have speculated that it is indeed the son of current MP Batbold Sukhbaatar.
If it is in fact the son of MP Batbold Sukhbaatar, it could warrant legal action in accordance to Mongolian law.
In April 2017, Parliament ratified amendments to the Law on Conflicts of Interest, renamed the Law on Regulating and Avoiding Conflicts of Interest Among Public Officials, to help fight money laundering, financial crimes and offshore accounts, and to try to reclaim a large amount of money that has been reportedly stored overseas.
Nearly 38,000 public officials are required to declare all of their assets to the Independent Authority Against Corruption (IAAC). Their family members and business partners are prohibited from having bank accounts or hold real estate in countries and territories identified by the International Monetary Fund, Tax Justice Network, and Organization for Economic Cooperation and Development as being home to illegal tax shelters.
The British Virgin Islands where Future Monson Holdings Limited is registered is included in the list of countries and territories as being home to illegal tax shelters.
Amongst the other individuals named in the leak included Batkhishig Batbayar, who has been reported to be the son of former MP B.Batbayar.
Outside of individuals linked to politicians, several large Mongolian conglomerates and businessmen were listed in the leaks. This includes Golomt Investments Limited and Bodi International LLC linked to Bodi Group. The director Golomt Investments Limited, Ganjoloo Ochirpurev, was named specifically.
In addition chairman of Petrovis J.Oyungerel and former CEO of Petro Matad Douglas McGay were included in the leaks. J.Oyungerel was also mentioned in the Panama Papers.
An individual listed as Chuluunbaatar Baz, thought to be the president of Monnis Group, had registered as a shareholder in Sino Mining Investment Limited in September 2005.
Chimed Enkhtaivan, believed to be the president of Tsagaan Shonkhor Holding LLC, opened an offshore account in the Cayman Islands on January 11, 2013.
An individual that was reported to own 84 exploration licenses by the media, Nomundari Zorigtbaatar, was linked to two companies registered in the British Virgin Islands, Poly Metal Resources Limited and Eastern Metals Investment Limited. Nomundari is the founder and general director of Adamas Mining LLC.
Among the less well-known individuals listed in the leaks included Gankhuyag Chultemsuren, Zuchi Sukhbold, Tuguldur Bat-Och, Battsengel Batsukh, and Uyanga Dashdavaa.
While many have been quick to jump to conclusions in regards to companies registering offshore companies, with many accusing companies and individuals of tax evasion, legally speaking, being listed on the leaked documents does not necessarily mean there has been any wrongdoing. Companies and individuals not related to government officials are afforded the right to incorporate and operate offshore accounts and companies. To reiterate what the ICIJ had disclaimed, there are legitimate uses for offshore companies and trusts.
None of the individuals linked to Mongolia listed in the Paradise Papers have been proven of any wrongdoing. As a result, it would be irresponsible to imply any action of wrongdoing without further investigation. As for Battushig Batbold, if it is confirmed that it is in fact the son of MP Batbold Sukhbaatar, in accordance to the law, he must close his offshore account and bring back his assets to Mongolia by January 1, 2018. The Independent Authority Against Corruption requires that any individuals linked to government officials and named in the Paradise Papers notify the agency by February 1, 2018.
While the perception of offshore accounts and dealings have had largely negative connotations, especially in the past few years due to the Panama Papers, many individuals and companies named in the leaks have acted in accordance to the law. It remains important to make a clear distinction between legitimate and the illegitimate uses of offshore holdings and trusts.