Photo via Marco Bond/Flickr (CC BY 2.0)
British actress Emma Watson is making headlines this week, but not for her upcoming adaption of The Circle opposite Tom Hanks.
As first reported by the Independent, the actress’s name appeared in the Panama Papers database, which was published in a searchable format last week by the International Consortium of Investigative Journalists. ICIJ is the organization behind the disclosure of offshore holdings maintained by world leaders and politicians for tax avoidance purposes.
The news, of course, has gone viral.
The Panama Papers include more than 11.5 million secret files pilfered from the Panamanian law firm Mossack Fonseca. The cache includes information on more than 214,000 offshore entities linked to individuals in over 200 countries and territories; among them, the British prime minister, the king of Saudi Arabia, and the president of Argentina. An investigation into the records was carried out this year by 107 media organizations in 80 countries.
The database also reveals that Watson, who is currently taking a year off acting to read and study, is a shareholder in a company called Falling Leaves Ltd., established in the British Virgin Islands in September 2013.
The existence of an offshore account in Watson’s name is not, however, evidence that Watson has done anything illegal or even dishonest. There are, after all, legitimate reasons for opening a bank account overseas.
For example, in the U.S., where one can be sued for just about anything, an offshore account may be useful for protecting assets from one of the estimated 40 million frivolous lawsuits filed each year. Provided the account holder notifies the Internal Revenue Service of the offshore holdings and pays taxes when legally required to do so, there’s nothing terribly scandalous about it, experts say.
As the ICIJ itself notes: “There are legitimate reasons to create a company in an offshore jurisdiction, and many people declare them to their tax authorities when that is required.”
Watson established the offshore account for privacy purposes, a spokesperson for the actress told the Independent. “Emma (like many high-profile individuals) set up an offshore company for the sole purpose of protecting her anonymity and safety,” the spokesperson said.
Watson's spokesperson added that under United Kingdom law, companies are “required to publish details of their shareholders,” and that arrangement did not sufficiently protect Watson, whose personal safety “has been jeopardized in the past owing to such information being publicly available.”
“Offshore companies do not publish these shareholder details,” the spokesperson said. “Emma receives absolutely no tax or monetary advantages from this offshore company whatsoever—only privacy.”
The Independent points out in its report that having an off-shore account does not equate to illegal activity, but that hasn't stopped the online media machine from running all types of finger-pointing headlines.