Media playback is unsupported on your device Media caption Paradise Papers: Apple’s secret tax bolthole revealed 
 
 The world's most profitable firm has a secretive new structure that would enable it to continue avoiding billions in taxes, the Paradise Papers show. 
 
 They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven. 
 
 It then moved the firm holding most of its untaxed offshore cash, now $252bn, to the Channel Island of Jersey. 
 
 Apple said the new structure had not lowered its taxes. 
 
 It said it remained the world's largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes "did not reduce our tax payments in any country". 
 
 In a further statement the company stressed that no operations or investments had been moved from Ireland. 
 
 The Paradise Papers is the name for a huge leak of financial documents that is throwing light on the world of offshore finance. 
 
 Paradise Papers - Tax secrets of the ultra-rich 
 
 Up until 2014, the tech company had been exploiting a loophole in tax laws in the US and the Republic of Ireland known as the "double Irish". 
 
 This allowed Apple to funnel all its sales outside of the Americas - currently about 55% of its revenue - through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax. 
 
 Instead of paying Irish corporation tax of 12.5%, or the US rate of 35%, Apple's avoidance structure helped it reduce its tax rate on profits outside of the US to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%. 
 
 The European Commission calculated the rate of tax for one of Apple's Irish companies for one year had been just 0.005%. 
 
 Media playback is unsupported on your device Media caption Apple CEO Tim Cook in 2013: "We pay all the taxes we owe. Every single dollar" 
 
 Apple came under pressure in 2013 in the US Senate, when CEO Tim Cook was forced to defend its tax system. 
 
 Angry that the US was missing out on a huge amount of tax, then-Senator Carl Levin told him: "You shifted that golden goose to Ireland. You shifted it to three companies that do not pay taxes in Ireland. These are the crown jewels of Apple Inc. Folks, it's not right." 
 
 Mr Cook responded defiantly: "We pay all the taxes we owe, every single dollar. We do not depend on tax gimmicks... We do not stash money on some Caribbean island." 
 
 Apple's questionnaire 
 
 After the EU announced in 2013 that it was investigating Apple's Irish arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes. 
 
 Media playback is unsupported on your device Media caption Panorama's Richard Bilton tries to speak to Appleby about Apple in Jersey 
 
 In order to keep its tax rates low, Apple needed to find an offshore financial centre that would serve as the tax residency for its Irish subsidiaries. 
 
 In March 2014, Apple's legal advisers sent a questionnaire to Appleby, a leading offshore finance law firm and source of much of the Paradise Papers leak. 
 
 It asked what benefits different offshore jurisdictions - the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey - could offer Apple. 
 
 The document asked key questions such as was it possible to "obtain an official assurance of tax exemption" and could it be confirmed that an Irish company might "conduct management activities… without being subject to taxation in your jurisdiction". 
 
 They also asked whether a change of government was likely, what information would be visible to the public and how easy it would be to exit the jurisdiction. 
 
 Source document: Apple questionnaire (extract) 
 
 Leaked emails also make it clear that Apple wanted to keep the move secret. 
 
 One email sent between senior partners at Appleby says: "For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know." 
 
 Apple chose Jersey, a UK Crown dependency that makes its own tax laws and which has a 0% corporate tax rate for foreign companies. 
 
 Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple's massive $252bn overseas cash hoard, and Apple Sales International (ASI), were managed from Appleby's office in Jersey from the start of 2015 until early 2016. 
 
 This would have enabled Apple to continue avoiding billions in tax around the world. 
 
 Apple's 2017 accounts showed they made $44.7bn outside the US and paid just $1.65bn in taxes to foreign governments, a rate of around 3.7%. That is less than a sixth of the average rate of corporation tax in the world. 
 
 Apple and Ireland vs the EU 
 
 In August 2016, after a three-year investigation, the European Commission finds that Ireland gave an illegal tax benefit to Apple. 
 
 The EC says Apple must repay Ireland taxes for the period within its remit of investigation, 2003-2013, a total of €13bn (£11.6bn) plus interest of €1bn. 
 
 Ireland and Apple launch an appeal. 
 
 Apple's Tim Cook calls the EC ruling "total political crap", with "no reason for it in fact or in law". Ireland says the EU is encroaching on sovereign taxation. It fears multinationals will go elsewhere. 
 
 Ireland agrees to collect the €13bn, to be held in a managed escrow account pending the appeal verdict. 
 
 In October 2017, the EU says it will take Ireland to court as it has not yet collected the money. Ireland says it is complicated and it needs time. 
 
 Massive GDP spike 
 
 When the "double-Irish" loophole was shut down, Ireland also created new tax regulations that companies like Apple could take advantage of. 
 
 One of the companies that Apple moved to Jersey, ASI, had rights to some of Apple Inc's hugely valuable intellectual property. 
 
 If ASI sold the intellectual property back to an Irish company, the Irish company would be able to offset the enormous cost against any future profits. And since the IP holder, ASI, was registered in Jersey, the profits of the sale would not be taxed. 
 
 It appears Apple has done just that. There was an extraordinary 26% spike in Ireland's GDP in 2015 which media reports put down to intellectual property assets moving into Ireland. Intangible assets rose a massive €250bn in Ireland that year. 
 
 Ireland's department of finance denied that the new regulations had been brought in to benefit multinationals. 
 
 It said Ireland was "not unique in allowing companies to claim capital allowances on intangible assets" and had followed "the international norm". 
 
 Media playback is unsupported on your device Media caption Investigative journalist Richard Brooks on Apple’s questionnaire and the Isle of Man’s response to it 
 
 Apple declined to answer questions about its two subsidiaries moving their tax residency to Jersey. 
 
 It also declined to comment when asked whether one of those companies had helped create a huge tax write-off by selling intellectual property. 
 
 Apple said: "When Ireland changed its tax laws in 2015, we complied by changing the residency of our Irish subsidiaries and we informed Ireland, the European Commission and the United States. 
 
 "The changes we made did not reduce our tax payments in any country. In fact, our payments to Ireland increased significantly and over the last three years we've paid $1.5bn in tax there." 
 
 Find out more about the words and phrases found in the Paradise Papers. 
 
 Your browser does not support this Lookup Your guide to financial jargon Enter your search term 
 
 The papers are a huge batch of leaked documents mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions, which reveal the financial dealings of politicians, celebrities, corporate giants and business leaders. 
 
 The 13.4 million records were passed to German newspaper Sueddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists (ICIJ). Panorama has led research for the BBC as part of a global investigation involving nearly 100 other media organisations, including the Guardian, in 67 countries. The BBC does not know the identity of the source. 
 
 Paradise Papers: Full coverage; follow reaction on Twitter using #ParadisePapers; in the BBC News app, follow the tag "Paradise Papers" 
 
 Watch Panorama on the BBC iPlayer (UK viewers only) ||||| Money paid for trainers in shops moves in and out of Europe, to Caribbean and even to entities not officially based anywhere 
 
 Everyone knows Nike. Most people probably own a pair of Nikes. 
 
 It is unquestionably one of the best-known brands in the world, making billions of dollars in profit from global trainer sales. With names such as Swoosh, Flight, Force, Tailwind and Pegasus, every shoe is crafted, and every launch anticipated and heavily marketed. 
 
 This is a company that stays one step ahead of its rivals. And one step ahead of the taxman, too. 
 
 Apple secretly moved parts of empire to Jersey after row over tax affairs Read more 
 
 Thanks to documents in the Paradise Papers, it has been possible to piece together the schemes and structures that have helped Nike over the past decade. It is a story involving grey areas and loopholes, tax havens and zero tax rates, and the movement of money and royalties from one jurisdiction to the next. 
 
 At the end of this journey is a limbo land beyond the reach of tax authorities. For the companies that know how to work the system, this is sensible and legal. For campaigners who insist the system is unfair, it is ridiculous. 
 
 Either way, it means money paid for trainers in cities such as London, Paris, Berlin and Madrid has ended up flowing in and out of Europe, on its way to the Caribbean, or to entities that are in effect stateless. And that is all apparently above board as far as tax authorities are concerned. 
 
 Nike did this with the help of smart lawyers, complex laws and compliant governments. Here, we break down exactly how. 
 
 Nike shoes are made in countries such as Vietnam and Indonesia. From there, they are shipped to the company’s futuristic, fortress-style warehouse in Belgium. The Laakdal “logistics” hub is a sneaker storeroom on a monumental scale. When shops need shoes, they come from here. 
 
 
 
 Facebook Twitter Pinterest Vietnamese workers put the finishing touches on trainers at a Nike factory on the outskirts of Ho Chi Minh City. Photograph: Richard Vogel/AP 
 
 Buy a pair of shoes in, say, London, and one would expect the cash to go to the company’s main British subsidiary, Nike UK Ltd. That would make sense, but that is not what happens. The money from sales of shoes flows out of the UK to the Netherlands. 
 
 
 
 That would make sense, but that is not what happens. The money from sales of shoes flows out of the UK to the Netherlands. The Netherlands is significant. In particular, two companies are at the heart of Nike’s Dutch operations. They pay some tax on the near $8bn (£6bn) of revenue they receive from Nike sales across Europe, the Middle East and Africa. 
 
 
 
 In particular, two companies are at the heart of Nike’s Dutch operations. They pay some tax on the near $8bn (£6bn) of revenue they receive from Nike sales across Europe, the Middle East and Africa. However, from 2005 until 2014, Nike was able to shift vast sums of money out of the Netherlands to Bermuda , which is an offshore tax haven with zero tax. Nike did this through a Bermudan subsidiary, Nike International Ltd, which held the company’s intellectual property rights for its sneaker brands – the crown jewels of the Nike empire. Even though this subsidiary did not appear to have any staff or offices in Bermuda, it charged large trademark royalty fees each year to Nike’s European HQ for selling its trainers. The fees allowed Nike to legally shift profits away from Europe to Nike International Ltd. 
 
 , which is an offshore tax haven with zero tax. Nike did this through a Bermudan subsidiary, Nike International Ltd, which held the company’s intellectual property rights for its sneaker brands – the crown jewels of the Nike empire. Even though this subsidiary did not appear to have any staff or offices in Bermuda, it charged large trademark royalty fees each year to Nike’s European HQ for selling its trainers. The fees allowed Nike to legally shift profits away from Europe to Nike International Ltd. In 2014, Nike had to think again. With the deal from the Netherlands due to expire, the company came up with a new plan, again with the agreement of Dutch authorities. This involved moving the company’s intellectual property from Nike International Ltd in Bermuda to yet another subsidiary, Nike Innovate CV. This entity is not based in Bermuda. It is not actually based anywhere. 
 
 How does it work? It is complex – and controversial. The “CV” model allows Nike Innovate to avoid paying local taxes in the Netherlands. Nike Innovate is not being taxed anywhere else, either. Nike is not the only multinational to use the CV model. Many of the US’s largest multinationals use similar subsidiaries. 
 
 A Nike Zoom trainer. Photograph: Nike 
 
 So, Nike Innovate CV is a treasure indeed. It is seemingly beyond the reach of Dutch tax authorities, and it is out of range for the US taxman, even though Nike is a US-registered company with headquarters in Portland, Oregon. Nike Innovate does not seem to have tax residency anywhere in the world. 
 
 
 
 It is seemingly beyond the reach of Dutch tax authorities, and it is out of range for the US taxman, even though Nike is a US-registered company with headquarters in Portland, Oregon. Nike Innovate does not seem to have tax residency anywhere in the world. The CV model, and the one that preceded it in Bermuda, appear to have helped Nike substantially reduce its global tax rate. In May, Nike’s offshore mountain of accumulated profits was worth more than $12bn. And its global tax rate has fallen from 34.9% in 2007 to 13.2% last year. 
 
 
 
 In May, Nike’s offshore mountain of accumulated profits was worth more than $12bn. And its global tax rate has fallen from 34.9% in 2007 to 13.2% last year. Nike was asked about these arrangements. It said: “Nike fully complies with tax regulations and we rigorously ensure our tax filings are fully aligned with how we run our business, the investments we make and the jobs we create. Nike’s European headquarters has been based in the Netherlands since 1999. It employs more than 2,500 people, who oversee Nike operations in over 75 countries.” 
 
 
 
 It said: “Nike fully complies with tax regulations and we rigorously ensure our tax filings are fully aligned with how we run our business, the investments we make and the jobs we create. Nike’s European headquarters has been based in the Netherlands since 1999. It employs more than 2,500 people, who oversee Nike operations in over 75 countries.” But Nike and other multinationals are under pressure. The Organisation for Economic Co-operation and Development has been trying to shut down the Dutch CV model, known in the trade as as the “reverse hybrid mismatch”. And it will be phased out. Under the EU’s anti-tax-avoidance directive, Nike may have to find a new way of funnelling its money by 2021, or pay more tax than it does at the moment. 
 
 
 
 So far, Nike has stayed one step ahead. The race is on again. ||||| A trove of 13.4 million records exposes ties between Russia and U.S. President Donald Trump’s billionaire commerce secretary, the secret dealings of the chief fundraiser for Canadian Prime Minister Justin Trudeau and the offshore interests of the queen of England and more than 120 politicians around the world. 
 
 The leaked documents, dubbed the Paradise Papers, show how deeply the offshore financial system is entangled with the overlapping worlds of political players, private wealth and corporate giants, including Apple, Nike, Uber and other global companies that avoid taxes through increasingly imaginative bookkeeping maneuvers. 
 
 One offshore web leads to Trump’s commerce secretary, private equity tycoon Wilbur Ross, who has a stake in a shipping company that has received more than $68 million in revenue since 2014 from a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin. 
 
 In all, the offshore ties of more than a dozen Trump advisers, Cabinet members and major donors appear in the leaked data. 
 
 The new files come from two offshore services firms as well as from 19 corporate registries maintained by governments in jurisdictions that serve as waystations in the global shadow economy. The leaks were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and a network of more than 380 journalists in 67 countries. 
 
 There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose Brooke Harrington 
 
 The promise of tax havens is secrecy – offshore locales create and oversee companies that often are difficult, or impossible, to trace back to their owners. While having an offshore entity is often legal, the built-in secrecy attracts money launderers, drug traffickers, kleptocrats and others who want to operate in the shadows. Offshore companies, often “shells” with no employees or office space, are also used in complex tax-avoidance structures that drain billions from national treasuries. 
 
 The offshore industry makes “the poor poorer” and is “deepening wealth inequality,” said Brooke Harrington, a certified wealth manager and Copenhagen Business School professor who is the author of ‘Capital without Borders: Wealth Managers and the One Percent.’ 
 
 “There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose,” Harrington said. These people “live the dream” of enjoying “the benefits of society without being subject to any of its constraints.” 
 
 The records expand on the revelations from the leak of offshore documents that spawned the 2016 Panama Papers investigation by ICIJ and its media partners. The new files shine a light on a different cast of underexplored island havens, including some with cleaner reputations and higher price tags, such as the Cayman Islands and Bermuda. 
 
 The most detailed revelations emerge in decades of corporate records from the white-shoe offshore law firm Appleby and corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016. 
 
 At least 31,000 of the individual and corporate clients included in Appleby’s records are U.S. citizens or have U.S. addresses, more than from any other country. Appleby also counted clients from the United Kingdom, China and Canada among its biggest sources of business. 
 
 Nearly 7 million records from Appleby and affiliates cover the period from 1950 to 2016 and include emails, billion-dollar loan agreements and bank statements involving at least 25,000 entities connected to people in 180 countries. Appleby is a member of the “Offshore Magic Circle,” an informal clique of the planet’s leading offshore law practices. The firm was founded Bermuda and has offices in Hong Kong, Shanghai, the British Virgin Islands, the Cayman Islands and other offshore centers. 
 
 Appleby has a well-guarded 100-year reputation and has avoided public scrapes through a mixture of discretion and expensive client monitoring. 
 
 In contrast to Appleby’s public image, the files reveal a company that has provided services to risky clients from Iran, Russia and Libya, failed government audits that identified gaps in anti-money-laundering procedures and been fined in secret by the Bermuda financial regulator. Appleby did not reply to ICIJ’s detailed questions but released an online statement saying it had investigated ICIJ’s questions and is “satisfied that there is no evidence of any wrongdoing.” 
 
 The firm said it is “subject to frequent regulatory checks, and we are committed to achieving the high standards set by our regulators.” 
 
 The leaked cache of documents includes more than half a million files from Asiaciti Trust, a family-run offshore specialist that is headquartered in Singapore and has satellite offices from Samoa in the South Pacific to Nevis in the Caribbean. 
 
 The leaked files also include documents from government business registries in some of the world’s most secretive corporate havens in the Caribbean, the Pacific and Europe, such as Antigua and Barbuda, the Cook Islands and Malta. One-fifth of the world’s busiest secrecy jurisdictions are represented in these databases. 
 
 Yes, the Duchy was aware that the Jubilee Absolute Return Fund was run offshore Chris Addock 
 
 Taken as a whole, the leaks reveal offshore traces of spy planes purchased by the United Arab Emirates, the Barbados explosives company of a Canadian engineer who tried to build a “super gun” for Iraqi dictator Saddam Hussein and the Bermuda company of the late Marcial Maciel Degollado, the influential Mexican priest who founded the Catholic religious order the Legionaries of Christ and whose legacy was marred by allegations of child sexual abuse. 
 
 Queen Elizabeth II has invested millions of dollars in medical and consumer loan companies, Appleby’s files show. While the Queen’s private estate, the Duchy of Lancaster, provides some details of its investments in U.K. property, such as commercial buildings scattered across southern England, it has never disclosed details of its offshore investments. 
 
 “Yes, the Duchy was aware that the Jubilee Absolute Return Fund was run offshore,” said Chris Addock, chief finance officer of the Duchy of Lancaster. 
 
 The records show that as of 2007, the queen’s private estate invested in a Cayman Islands fund that in turn invested in a private equity company that controlled BrightHouse, a U.K. rent-to-own firm criticized by consumer watchdogs and members of Parliament for selling household goods to cash-strapped Britons on payment plans with interest rates as high as 99.9 percent. 
 
 Other royals and politicians with newly disclosed offshore ties include Queen Noor of Jordan, who was listed as the beneficiary of two trusts on the island of Jersey, including one that held her sprawling British estate; Sam Kutesa, Uganda’s foreign minister and a former U.N. General Assembly president, who set up an offshore trust in the Seychelles to manage his personal wealth; Brazil’s finance minister, Henrique de Campos Meirelles, who created a foundation in Bermuda “for charitable purposes”; and Antanas Guoga, a Lithuanian member of the European Parliament and professional poker player, who held a stake in an Isle of Man company whose other shareholders included a gambling mogul who settled a fraud lawsuit in the United States. 
 
 Wesley Clark, a one-time Democratic presidential hopeful and a retired four-star U.S. Army general who served as NATO’s supreme commander in Europe , was a director of an online gambling company with offshore subsidiaries, the files show. 
 
 Queen Elizabeth II has invested millions of dollars in medical and consumer loan companies. i Getty Images 
 
 A spokesman for Queen Elizabeth II told ICIJ partner The Guardian that the Duchy has an ongoing investment in the Cayman Island fund and was not aware of the investment in BrightHouse. The Queen voluntarily pays tax on income from the Duchy and its investments, the spokesman said. 
 
 Queen Noor told ICIJ that “all the bequests made to her and to her children by [the late King Hussein] have always been administered according to the highest ethical, legal and regulatory standards.” 
 
 Brazil’s Meirelles said the foundation he created does not benefit him personally and will support education charities after his death. 
 
 Guoga said he declared his investment in the Isle of Man company to authorities and sold the last of his shares in 2014. 
 
 “I thought you could avoid, not evade, taxes but I found it was not practical,” Kutesa told ICIJ’s media partner The Daily Monitor. He said he did nothing with the company. “ I told Appleby to close it many years ago.” 
 
 Clark did not reply to requests for comment. 
 
 In addition to disclosures about politicians and corporations, the files reveal details about the financial lives of the rich and famous – and the unknown. They include Microsoft co-founder Paul Allen’s yacht and submarines, eBay founder Pierre Omidyar’s Cayman Island investment vehicle, and music star Madonna’s shares in a medical supplies company. Pop singer and social justice activist Bono – listed under his full name, Paul Hewson – owned shares in a company registered in Malta that invested in shopping center in Lithuania, company records show. Other clients listed their occupations as dog groomer, plumber and wakeboard instructor. 
 
 Madonna and Allen did not reply to requests for comment. Omidyar, whose Omidyar Network donates to ICIJ, discloses his investment to tax authorities, a spokeswoman said. Bono was a “passive, minority investor” in the Malta company that closed down in 2015, a spokeswoman said. 
 
 Justin Trudeau and Donald Trump 
 
 Wealthy people across the political spectrum use the offshore system. 
 
 The files reveal that Stephen Bronfman, Canadian Prime Minister Trudeau’s adviser and close friend, teamed up with Liberal Party stalwart Leo Kolber and Kolber’s son to quietly move millions of dollars to a Cayman trust. The offshore maneuvers may have avoided taxes in Canada, the United States and Israel, according to experts who reviewed some of the 3,000-plus files detailing the trust’s activities. 
 
 As the offshore riches grew, lawyers for Bronfman, the Kolbers and other wealthy interests lobbied Canada’s Parliament to fight legislative proposals to tax income from offshore trusts. 
 
 Bronfman remains a key fundraiser for Trudeau, who has championed openness in government and promised a crackdown on offshore tax dodging. In September, Trudeau told the U.N. General Assembly: “Right now, we have a system that encourages wealthy Canadians to use private corporations to pay a lower tax rate than middle-class Canadians. That’s not fair and we’re going to fix it.” 
 
 Kolber’s lawyers said in a letter to ICIJ’s partner CBC that “none of the transactions or entities at issue were effected or established to evade or even avoid taxation.” They added that the trusts “were always in full conformity with all applicable laws and requirements,” and said that no further comment would be provided by Stephen Bronfman. Trudeau’s office declined to comment. 
 
 In the United States, the files reveal personal or corporate offshore ties of key Trump associates who are charged with helping to put “America First.” 
 
 The Appleby files show how Ross, Trump’s commerce secretary, has used a chain of Cayman Islands entities to maintain a financial stake in Navigator Holdings, a shipping company whose top clients include the Kremlin-linked energy firm Sibur. Among Sibur’s key owners are Kirill Shamalov, Putin’s son-in-law, and Gennady Timchenko, a billionaire the U.S. government sanctioned in 2014 because of his links to Putin. Sibur is a major customer of Navigator, paying the company more than $23 million in 2016. 
 
 When he joined Trump’s Cabinet, Ross divested his interests in 80 companies. But he kept stakes in nine companies, including the four that connect him to Navigator and its Russian clients. 
 
 These revelations come against a backdrop of growing concerns about hidden Russian involvement in U.S. political affairs. 
 
 Sibur is “a company with crony connections,” said Daniel Fried, a Russia expert who has served in senior State Department posts in Republican and Democratic administrations. “Why would any officer of the U.S. government have any relationship with a Putin crony?” 
 
 A spokesman for Ross said that the Commerce Secretary never met Putin’s son-in-law or Sibur’s other owners and that he was not on the board of Navigator when it initiated its relationship with Sibur. 
 
 Ross recuses himself from matters that relate to international shipping, his spokesman said, and “has been generally supportive of the administration’s sanctions” against Russian entities. 
 
 The leaked files also led to other discoveries about U.S.-Russian business ties. 
 
 US President Donald Trump and Wilbur Ross first met in 1990. i Getty Images 
 
 A document in the new cache of records helped steer ICIJ and its media partners to public documents and Panama Papers files that illuminate links between a pair of Kremlin-owned financial firms and major investments in Twitter and Facebook. 
 
 In 2011, the investment fund run by tech mogul Yuri Milner received $191 million from one of the Russian government firms, VTB Bank, and quietly invested that money in Twitter. Documents also show that a financial subsidiary of the Kremlin-controlled energy giant Gazprom funded a shell company that invested in a Milner-affiliated company that held roughly $1 billion in Facebook shares shortly before the social network’s 2012 initial public offering. 
 
 More recently, Milner invested $850,000 in Cadre, a real estate firm co-founded by Trump’s son-in-law and White House adviser, Jared Kushner. 
 
 Milner is a Russian citizen who lives in Silicon Valley. His ties to Twitter, Facebook and Kushner’s firm have been previously disclosed. But his links to the Kremlin financial institutions weren’t known. 
 
 VTB confirmed that it had used Milner’s fund to make an investment in Twitter. Facebook and Twitter said they had properly reviewed Milner’s investments. 
 
 In an interview, Milner said he was unaware of any possible involvement by the Gazprom subsidiary in any of his deals and that none of his many investments have been related to politics. He said he used his own money in the Kushner investment. 
 
 On the other side of the U.S. political divide, Ross’ predecessor as secretary of commerce, Penny Pritzker, pledged to sell investments to avoid conflicts of interest after she assumed her post in Democratic President Barack Obama’s Cabinet. The files show that soon after she received Senate confirmation in June 2013, Pritzker transferred her interests in two Bermuda companies to a firm that used the same mailing address as her private investment firm in Chicago. The company was “owned by trusts that are for the benefit of Penny Pritzker’s children,” according to Appleby’s files. These transfers may have fallen short of federal ethics standards for divestment, according to ethics expert Lawrence Noble. 
 
 Republican and Democratic donors alike appear in offshore records, including Randal Quarles, a GOP-leaning donor and the new Wall Street watchdog at the Federal Reserve. Quarles was an officer of two Cayman Island companies, including one that was involved in a loan deal with a Bermudan bank, N.T. Butterfield & Son. Until recently, Quarles held an indirect interest in the bank, which is under investigation by U.S. authorities for possible tax evasion by its American account holders. Private equity funds controlled by Democratic mega-donor George Soros, a hedge fund billionaire, use Appleby to help manage a web of offshore entities, including an investment in one company engaged in reinsurance, or insurance for insurers. His charitable organization, the Open Society Foundations, is a donor to ICIJ. 
 
 A spokesperson at the Federal Reserve said Quarles divested his indirect interest in the Bermudan bank after he was confirmed for the government post. Soros declined to comment. Pritzker did not respond to requests for comment. 
 
 Boardroom secrets 
 
 When Appleby is not serving the interests of some of the world’s wealthiest individuals, it provides nuts-and-bolts legal help to corporations that seek to reduce their taxes in the countries where they do business. Appleby is not a tax adviser, but the firm plays a role in tax programs used by companies across the world. 
 
 In addition to top-flight international banks such as Barclays, Goldman Sachs and BNP Paribas, other elite Appleby clients have included the founder of one of the Middle East’s largest construction conglomerates, the Saad Group, and the Japanese company operating the crippled nuclear power plant in Fukushima. 
 
 The files reveal that America’s most profitable company, Apple Inc., shopped around Europe and the Caribbean for a new island tax shelter after a U.S. Senate inquiry found that the tech giant had avoided tens of billions of dollars in taxes by shifting profits into Irish subsidiaries. 
 
 In one email exchange, Apple’s lawyers asked Appleby to confirm that a possible move to one of six offshore tax havens would allow an Irish subsidiary to “conduct management activities . . . without being subject to taxation in these jurisdictions.” Apple declined to comment on details of the corporate reorganization but told ICIJ that it explained the new arrangements to government authorities and that the changes did not reduce its tax payments. 
 
 The files also reveal how big corporations cut their taxes by creating offshore shell companies to hold intangible assets such as the design of Nike’s “Swoosh” logo and the creative rights to silicone breast implants. 
 
 One of Appleby’s top corporate clients was Glencore PLC, the world’s largest commodity trader. The files contain decades of deals, emails and multimillion-dollar loans to bankroll ventures in Russia, Latin America, Africa and Australia. 
 
 Glencore was such an important client that it once had its own room within Appleby’s offices in Bermuda. 
 
 Inside Appleby’s Bermuda headquarters there used to be a room dedicated to Glencore. i Hidefumi Nogami/The Asahi Shimbun 
 
 Company board meeting minutes document how Glencore representatives leaned on Daniel Gertler, an Israeli businessman with high-level friends in the Democratic Republic of the Congo, to help seal a deal for a valuable copper mine. Glencore lent millions to a company, widely believed to belong to Gertler, described in a U.S. Department of Justice inquiry as a conduit for bribes. Gertler and Glencore were not named in the case. 
 
 Glencore said its background checks on Gertler were “extensive and thorough.” The Justice Department investigation “does not constitute evidence of anything against Mr. Gertler,” his lawyers said, adding that he “rejects absolutely any allegations of wrongdoing or criminality by him.” No loans were used improperly or for inappropriate purposes, Gertler’s lawyers said. 
 
 Offshore operatives 
 
 The offshore industry is a globe-circling labyrinth of accountants, bankers, money managers, lawyers and middlemen who get paid to serve the interests of the rich and well-connected. 
 
 Appleby, for example, is one link in a chain of offshore actors who helped sports stars, Russian oligarchs and government officials to purchase jets, yachts and other luxury items. The offshore experts helped Arkady and Boris Rotenberg, two Russian billionaires and childhood friends of President Putin, buy jets worth more than $20 million in 2013. U.S authorities blacklisted the Rotenbergs in 2014 for their support of “Putin’s pet projects” and for having banked “high price contracts” through the Russian government. Appleby cut its ties with the brothers but, in one case, received approval from the Isle of Man government nearly two years after sanctions were imposed to disburse fees to keep one of the brothers’ companies on the business register. The Rotenbergs did not reply to Süddeutsche Zeitung’s requests for comment. 
 
 Clients prize Appleby for its expertise, efficiency and global network of professionals. Its peers repeatedly crown it Offshore Law Firm of the Year. 
 
 But decades of private documents also show that even one of the offshore industry’s brightest stars has hidden shortcomings: accepting questionable clients and failing to monitor multimillion-dollar money flows. 
 
 Bermuda financial regulators fined the firm’s trust unit for breaching anti-money-laundering rules, according to a confidential 2015 deal struck by Appleby and the regulator. This year, Appleby reached a $12.7 million settlement in a lawsuit in Canada in which nurses, firefighters and police officers accused the firm of unquestioningly circulating money on behalf of a client who designed an alleged alleged tax-avoidance scheme. Appleby and the alleged mastermind did not admit wrongdoing. 
 
 Family-owned Asiaciti advertises itself as helping clients to accumulate and “preserve wealth from the ravages of litigation,” political upheavals and family breakups. It has attracted Chinese millionaires, family members of a Kazakh official convicted of corruption and a broad swath of Americans, including doctors, poker players and a Colorado alfalfa farmer. 
 
 If you say that you’ve cleaned it up, at the end of the day, can you really say that you’ve picked up every piece of seaweed? Adrian Alhassan 
 
 The leaked files from Asiaciti reveal how the firm set up trusts in the Cook Islands for Kevin Trudeau, a U.S. infomercial frontman who sold millions of copies of self-help books such as “The Weight-Loss Cure ‘They’ Don’t Want You to Know About.” In 2014, a Chicago judge sentenced Trudeau to 10 years in federal prison for criminal contempt, calling him a shameless fraudster who was “deceitful to the core” and once even used his mother’s Social Security number in one of his scams. 
 
 Appleby said in its online statement that it is committed to meeting regulators’ standards. Appleby provides advice to clients “on legitimate and lawful ways to conduct their business,” the firm said, and it does not tolerate illegal behavior. 
 
 “It is true that we are not infallible,” Appleby said. “Where we find that mistakes have happened we act quickly to put things right.” 
 
 Asiaciti did not respond to requests for comment. 
 
 Adrian Alhassan, a former compliance manager at Appleby’s Bermuda office told ICIJ that if someone is “hellbent” on breaking the law, there’s only so much an offshore services provider can do. “It’s not the FBI,” he said. If the law firm spent years doing background research on clients, it wouldn’t “get any work done.” 
 
 “It’s like cleaning a beach,” Alhassan said in a telephone interview. “If you say that you’ve cleaned it up, at the end of the day, can you really say that you’ve picked up every piece of seaweed?” 
 
 Deepening inequality 
 
 Tax havens’ secrecy laws entice those who wish to place their wealth and dealings beyond the reach of regulators, investigators and the tax collectors. 
 
 The documents from corporate registries in 19 such jurisdictions reveal company names and details, directors and real owners of companies created in many of the world’s busiest offshore hideouts. 
 
 The documents come from high- and low-profile bastions of financial secrecy such as Marshall Islands, Lebanon and St. Kitts and Nevis, a low-lying Caribbean country recently hit by hurricanes. Some jurisdictions’ records are publicly available but impossible to search by an individual’s name. Others, such as the Cayman Islands’ registry, charge more than $30 for a one-page record that provides only basic information. Six registries do not make information available online. 
 
 The leaked files contain more than a thousand records from Antigua and Barbuda, a Caribbean country that provides no online corporate information and more than 600,000 documents from the online registry of Barbados, which does not list shareholders or directors. 
 
 Over the past decade or more, the European Union and other international organizations have pressured offshore havens to reform their laws and require that offshore go-betweens aggressively screen clients. Progress has been slow, experts say, both because of the challenges of changing practices across a global web of jurisdictions and because powerful people and big companies benefit from the offshore system. 
 
 They do so at the expense of the many – shifting the burden of taxation to middle-income taxpayers and giving multinational corporations an advantage over smaller competitors. Where it hurts most is in nations struggling to provide the basics for their populations. 
 
 In West Africa, Burkina Faso officials who monitor the tax payments of the largest companies doing business there work from cramped offices with broken air-conditioning units. Burkina Faso is among the poorest countries in the world. On average, a citizen there earns less annually than the owner of an offshore company in Bermuda pays in registration fees. The country’s tax office sought $29 million in unpaid taxes and penalties from Glencore, the world’s 16th-largest company and a major user of Appleby’s services. Glencore protested and the penalty was reduced to $1.5 million. 
 
 Helping the rich get richer through offshore maneuvers is not a “benign benefit,” said Harrington, the Copenhagen Business School professor. “When the rich get richer, the poor get poorer, because individual wealthy people are not paying their fair share of taxes.” 
 
 “It won’t be lost on wealth managers and those in the offshore industry,” she said, “that we are reaching sort of French Revolution levels of inequality and injustice.” ||||| Bernie Sanders has warned that the world is rapidly becoming an “international oligarchy” controlled by a tiny number of billionaires, highlighted by the revelations in the Paradise Papers. 
 
 In a statement to the Guardian in the wake of the massive leak of documents exposing the secrets of offshore investors, Sanders said that the enrichment of wealthy individuals and companies in tax havens was “the major issue of our time”. 
 
 He said the Paradise Papers opened the door on a “major problem not just for the US but for governments throughout the world”. 
 
 “The major issue of our time is the rapid movement toward international oligarchy in which a handful of billionaires own and control a significant part of the global economy. The Paradise Papers shows how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes,” the US senator from Vermont said. 
 
 Sanders, who came in a close second to Hillary Clinton in the race for the Democratic presidential nomination last year, pointed the finger of blame for the flourishing of offshore holdings on both Congress and the Trump administration. He told the Guardian that Republicans in Congress were responsible for providing “even more tax breaks to profitable corporations like Apple and Nike”. 
 
 The same tax breaks, he said, were being seized upon by super-wealthy members of Trump’s cabinet “who avoid billions in US taxes by shifting American jobs and profits to offshore tax havens. We need to close these loopholes and demand a fair and progressive tax system.” 
 
 Play Video 2:07 What are the Paradise Papers? – video 
 
 Sanders’ intervention in the debate sparked by the Paradise Papers marks the most prominent political response to the leak in their opening 24 hours. The investigation stems from the leak of some 13m files obtained by Süddeutsche Zeitung in Germany and shared with almost 100 news organisations around the world including the Guardian by the International Consortium of Investigative Journalists. 
 
 One of the most pointed disclosures in the Paradise Papers was that Wilbur Ross, Trump’s commerce secretary, has continued to do business with the son-in-law of the Russian president, Vladimir Putin, as well as a member of Putin’s inner circle who is under US sanctions. Ross, himself a billionaire, has retained since joining the Trump administration his investment in a shipping company, Navigator, that has a partnership with the Russian gas giant Sibur. 
 
 In turn Sibur is part-owned by Kirill Shamalov, the husband of Putin’s daughter. 
 
 Bernie Sanders attacks billionaires and firms exposed by Paradise Papers – live Read more 
 
 The emergence of Ross’s ongoing ties to business interests so close to the Russian president at a time of intense scrutiny of the relationship between the Trump administration and the Kremlin has incensed prominent Democrats involved in Ross’s confirmation to office. Richard Blumenthal, a Democrat who sits on the US Senate commerce committee, accused Ross of deceiving the public as well as lawmakers who had allowed the confirmation to go through having heard Ross promise to divest himself of any interests that carried potential conflict. 
 
 “If he fails to present a clear and compelling explanation, he ought to resign,” Blumenthal told MSNBC in an interview. 
 
 Senator Tammy Baldwin, a Democrat from Wisconsin, said: “In February, I opposed Mr. Ross’ nomination because there were a number of unanswered questions about his ownership stake in the Bank of Cyprus and his connections to Russian President Vladimir Putin, as well as his refusal to divest from a $1 billion co-investment made with the state-owned Chinese Investment Corporation. 
 
 “Despite assurances from the Commerce Department and the White House on the eve of his nomination, these questions remain unanswered over eight months later. These unanswered questions and recent revelations certainly warrant a Commerce Committee hearing and I think an Inspector General investigation is in order. We should get to the bottom of this.” 
 
 On Monday, Ross denied that he had done anything wrong in his handling of his investment in Navigator. In the course of a visit to London, he told UK media that “there is nothing wrong with it. The fact that it happens to be called a Russian company doesn’t mean there is any evil in it.” 
 
 Further responses to the Paradise Papers came from the Democratic leader in the US Senate Chuck Schumer, and the ranking Democratic member of the Senate finance committee, Ron Wyden. In a joint statement they accused Republicans in Congress leading the push towards a reform of the tax code of failing to close egregious loopholes revealed by the leaks. 
 
 As a result Republicans were rewarding, the duo said, “wealthy billionaires like secretary Wilbur Ross for dodging taxes, while punishing many in the middle class with new tax hikes. If you deduct medical expenses or student loan interest from your taxable income, the Republican plan comes after your wallet. But if you stash your billions in secret bank accounts overseas, their plan gives you the green light to keep doing what you’ve been doing.” 
 
 They added that the Paradise Papers were “proof positive that the Republican tax plan favours the wealthy and betrays the middle class in this country, who are the ones left carrying the financial burden of massive corporate tax avoidance”.
– The financial secrets of many of the world's elites are trickling out thanks to the release of what are being called the Paradise Papers. The massive leak of internal documents from Bermuda-based law firm Appleby is spurring headlines like this one: "Lewis Hamilton avoided taxes on £17m jet using Isle of Man scheme." It has also led Bernie Sanders to warn of a "rapid movement toward international oligarchy." In a statement to the Guardian, he says the papers show "how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes." Two apparent examples, as revealed by some of the 13.4 million records being examined: Apple: The tech giant has employed a maneuver called the "double Irish" that allows the company to route its non-Americas revenue in a way that incurs very little tax. The EU in 2013 decided to probe this arrangement, and Ireland cracked down: It announced that firms incorporated there wouldn't be allowed to be stateless for tax purposes, as Apple's Irish subsidiaries were. The Paradise Papers leak reveals Apple found its state. Communications between Applelby and Apple show Apple asking about the benefits that might come from various options (think Bermuda, the Cayman Islands, the Isle of Man). It ended up going with Jersey, an island between England and France, reports the BBC, where foreign companies are taxed at a 0% rate. Nike: The Guardian reports the Paradise Papers spell out exactly how Nike has been able to reduce its tax burden, and says the Netherlands is key. From 2005 to 2014, the revenue from sales throughout Europe went there, and much of it then traveled to Bermuda via its Bermudan subsidiary, Nike International Ltd. That subsidiary was pretty much a shell: no office, no staff, but it possessed Nike's intellectual property rights, which let it impose big royalty fees of Nike's European headquarters, which created the funnel that legally allowed profits to move to the Bermuda subsidiary. Then things got even weirder with the creation of the subsidiary Nike Innovate CV which is based ... nowhere. The Guardian explains.