The so-called 'Paradise Papers,' leaked from the international law firm of Appleby, reveal the offshore interests and activities of more than 120 politicians and world leaders, including Queen Elizabeth II and 13 advisors/major donors to US President Donald Trump.

They also show the interests of the owners of jets and yachts, including royalty and sports stars, using Isle of Man tax-avoidance structures. At this stage, the media is running over with unsubstantiated speculation about the activities of UHNW investors and "politically exposed persons" whom the leaked records mention but has presented no hard-and-fast evidence of criminal activity.

The previous game-changing international data leak, known as the Panama Papers because it came from the Panamanian law firm of Mossack Fonseca, led eventually to prosecutions and non-prosecution tax settlements all over the world, but only after a gratuitous festival of finger-pointing that amounted to nothing in most cases. With sensational headlines such as "Trump told voters he would put America first but surrounding him are associates who have used tax havens to conduct business," the International Consortium of Investigative Journalists, which has published the data, seems to be inveighing against the wholly legal use of offshore structures. It also appears to be following current fashion in some quarters by conflating illegal tax evasion with perfectly legal tax avoidance. Anglo-Saxon tax authorities all over the world have been trying to do this as well to some extent since the days of Thatcher and Reagan, but especially since the global financial crisis began in 2008.

The revelations have already provoked a spiky reaction from Lord Ashcroft, the UK Conservative Party donor and former deputy chairman, whom the BBC Panorama programme suggested may have ignored some rules in connection with the Punta Gorda Trust. This investment vehicle reportedly contains hundreds of millions of pounds. Ashcroft took to Twitter at 7:24am yesterday to deny breaking the rules and indeed ever controlling the trust. He added: "At no point has it been suggested directly to me, or through others, that I have taken any inappropriate action. No professional trustee has ever resigned because of anything I may have done." Ashcroft, for some reason, retracted his tweet later.

The provenance of the data is unknown. As before with the Panama Papers, it came into the hands of the Süddeutsche Zeitung, a German national daily, and was then passed on to the Washington-based International Consortium of Investigative Journalists. In a message on its website, Appleby hints that it comes from an online hack. Its site says that the ICIJ's investigation involves "allegations made against our business and the business conducted by some of our clients." The firm is based in Bermuda with offices in the British Virgin Islands, the Cayman Islands, Guernsey, Hong Kong, Isle of Man, Jersey, Mauritius, Seychelles and Shanghai. The data - however much exists - could come from any or all of these places.

This time, the hackers/leakers shone a light on a victim-firm that had plenty of records of American activity. At least 31,000 of the individual and corporate clients in Appleby’s records are US citizens or have US addresses - more than from any other country. Appleby also counted the United Kingdom, China and Canada among its most prolific sources of clients.

Although it is not of interest to wealth management firms, it would be churlish to neglect to say that the papers expose the tax engineering of more than 100 multinational corporations, including their use of shell companies in Mauritius and Singapore to reduce taxes. They also shine a light on secretive deals and hidden companies connected to Glencore, the world’s largest commodity trader, and provide detailed accounts of that company’s negotiations in the Democratic Republic of the Congo for valuable mineral resources.

Professor Richard Gordon, the director of the Institute for Global Security Law and Policy at Case Western Reserve University in the US, told Compliance Matters: "Larger governments have said to offshore financial centres: 'You’re competing unfairly. What you’re doing is not fair. Fair competition would be only economic activity that is taking place in the jurisdiction. You have lowered your tax rates so that people bring things to your jurisdiction that they would not otherwise bring and that’s unfair.' There is a threefold problem with that argument.

"First, most onshore governments are doing exactly the same thing. I invite everybody to walk around Miami and look at the very large bank buildings there and you will see the names of banks that no American knows on those buildings. Those buildings are filled with banks aimed at Latin American consumers and the US does not tax or report the interest paid on bank accounts that foreigners hold in the United States. So if you have some money sitting around, put it in a US bank account and it will not be taxed in the US and (as far as I know) we are not planning to tell anybody else about that. This is true for portfolios of bonds as well. When the Organisation for Economic Co-operation and Development (OECD) came up with a definition of 'harmful tax competition,' it excluded that racket. This happened because the US was a member of the OECD and argued that something that it was doing should not be classified as harmful tax competition, which was therefore defined only as a lowering of rates to attract business.

"The second argument against the 'unfairness' of the West’s modern anti-tax-competition drive is that if you say that competition is illegitimate, you are also saying that there is one right way to do something. You are saying that “the way I’m doing it is right and the way you’re doing it is wrong.” However, circumstances are different. Different countries can choose different policies. It is an infringement of Ireland’s sovereignty if France tells Ireland to raise its taxes. Ireland is certainly free to choose its own development strategy and its own tax policies, just as France is. If you try to define what is fair and unfair, I think that ultimately the only outcome is to say: “there are more of us on this side of the argument than on yours.” The applicable legal maxim here is sic utere tuo ut alienum non laedas – use your own property in such a way that you do not injure other people’s.

"I think the third defence of offshore centres in terms of competition is that competition has real benefits. Their governments are different from onshore governments because they are highly dependent on revenue from financial business, they are small and they are agile. They improve the onshore legal situation by continuing to compete and that is of benefit to us all."

When real allegations emerge, supported by arguments from government prosecutors, Compliance Matters will be here to report them.