China's Epic Offshore Wealth Revealed: How Chinese Oligarchs Quietly Parked Up To $4 Trillion In The Caribbean -- By Tyler Durden, Zero Hedge

The last time the International Consortium of Investigative Journalists made a splash in the financial media was in April of last year year when it disclosed a trove of secret documents revealing a massive treasury of offshore wealth parked away from taxation-happy host governments. The context was clear: in the aftermath of the Cyprus deposit confiscation, public opinion had to turn against those who were exploiting offshore tax loophole in order to avoid a panic that the same "bail in" could happen to the common man.

Needless to say, the circumstances surrounding the release then were rather curious: one day thousands of files - revealing the names behind covert companies used by people from American doctors to Russian executives and international arms dealers - just happened to turn up at a source's house.

Well, the ICIJ is back in the spotlight once again, this time revealing "nearly 22,000 tax haven clients from Hong Kong and mainland China. Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals."

Once again, the source of this treasure trove of data is secret, although we feel the recent Bloomberg cover up (and suspension and termination of Michael Forsyth) regarding a certain investigation into Chinese tycoons' connections with Communist party leaders may have something to do with it. All ICIJ says on the matter is that "In November, a mainland Chinese news organization that was working with ICIJ to analyze the offshore data withdrew from the reporting partnership, explaining that authorities had warned it not to publish anything about the material. ICIJ is keeping the identity of the news outlet confidential to protect journalists from government retaliation." But where the data comes from is largely irrelevant.

What is relevant is that once again the two largest Swiss banks are about to be embroiled in yet another money laundering scandal, this time involving the parking of wealth belonging to China's aristocracy - including its princelings - in various Caribbean, and mostly British Virgin Island, tax havens.
From the ICJC's findings:

PricewaterhouseCoopers, UBS and other Western banks and accounting firms play a key role as middlemen in helping Chinese clients set up trusts and companies in the British Virgin Islands, Samoa and other offshore centers usually associated with hidden wealth, the records show. For instance, Swiss financial giant Credit Suisse helped Wen Jiabao’s son create his BVI company while his father was leading the country.

The files come from two offshore firms — Singapore-based Portcullis TrustNet and BVI-based Commonwealth Trust Limited — that help clients create offshore companies, trusts and bank accounts. They are part of a cache of 2.5 million leaked files that ICIJ has sifted through with help from more than 50 reporting partners in Europe, North America, Asia and other regions.

Since last April, ICIJ’s stories have triggered official inquiries, high-profile resignations and policy changes around the world.

Until now, the details on China and Hong Kong had not been disclosed.

What is notable, if not unexpected, is just how pervasive the parking of offshore capital has been, and confirms that it is not inflow of money that the PBOC has to be afraid of when its internationalizes the Yuan, it is the outflow that will be far more worrisome.

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