The Pandora Papers revealed that it is challenging to work out who is behind complex offshore set-ups. An investigation of more than 11.9 million records from 14 offshore service providers was conducted in 2021. Over 27,000 companies, foundations and trusts, and approximately 29,000 beneficial owners were covered in the files. For banks, fintechs, investment companies or professional services, the problem is not just about offshore wealth. Hidden ownership can make the source of funds, an entity’s ownership, or a customer’s changing risk profile harder to understand. This is where the lessons learned from the Pandora Papers hacks are relevant to today’s AML operations.
Pandora Papers Leaks Showed the Complexity Behind Ownership
They do not automatically make offshore companies illegal. Companies and trusts can exist for legitimate commercial and financial reasons. The risk arises when complexity is used to obscure ownership, control, assets, or the origin of funds. The Pandora Papers leaks highlighted this issue. More than 200 countries and territories were linked to offshore structures via records. The ICIJ also identified over 330 politicians and high-ranking public officials from more than 90 countries and territories. A company name rarely tells the whole story about a financial institution. Ownership may pass through multiple hands and jurisdictions before reaching the structure’s ultimate owner. This makes the problem of AML a practical one. Risk teams need to look beyond the immediate customer and understand the relationships around them.
From Panama Papers to Pandora Papers, Ownership Remains a Risk
In 2016, one offshore service provider was found in the Panama Papers investigation. The Pandora Papers came from 14 providers and revealed more than twice as many beneficial owners as the Panama Papers. The difference matters because the offshore ecosystem is not built around one company or one jurisdiction. Structures may include law firms, corporate service providers, trusts, holding companies and financial institutions in multiple markets. FATF has long focused on beneficial ownership in the fight against financial crime. Its standards are designed to make it more difficult for criminals to disguise themselves within companies and intricate legal and business structures. In 2022, the FATF made further enhancements to global beneficial ownership standards in Recommendation 24. In order to effectively assess risks, compliance teams must include ownership information as a key part of the risk assessment process, not just as an onboarding formality.
What the Pandora Papers Mean for Financial Institutions
The bank may check a company’s record against sanctions lists and find that this is not the case. This does not necessarily imply that there is no broader risk in the relationship. The customer may have an intricate ownership structure. A director may have adverse media that is relevant. It is possible that a beneficial owner may have relationships that are not apparent in the initial screening result. That’s where ownership checks help, alongside adverse media and entity screening. AML teams should not analyse each signal individually, but rather use information to connect them. AML Watcher supports this approach by screening multiple sanctions lists, PEP lists, watchlists, and adverse media. It also features international leaks intelligence, including the Panama Papers and Pandora Papers. Such coverage may be used by a compliance team to find information that can’t be found in a standard watchlist search.
Why Offshore Risk Needs More Than Name Matching
The hardest part of working with large financial datasets isn’t finding a name. It is choosing the right information with which to review the customer. The wrong common name will return the wrong data. A company incorporated overseas may have more than one director or more than one beneficial owner. A person may also appear in various bodies and at various levels. AML Watcher’s TruRisk is designed to provide context for screening results. It relies on date of birth, location, and other available attributes rather than a name alone. In adverse media, it relates reporting to the person or entity in question and takes into account the relevance and timeliness of the information. This is particularly helpful for compliance teams when they are faced with a substantial amount of data. The objective is not to flag every connection. It is to help analysts focus on connections that truly impact a risk decision.
Turning Offshore Intelligence Into Stronger AML Decisions
The Pandora Papers did not create the offshore financial system. They exposed how difficult that system can be to see from the outside. For financial institutions, that visibility remains important long after the headlines disappear. Beneficial ownership, adverse media, PEP exposure, sanctions, and corporate relationships can all contribute to the risk picture. Treating each signal separately can leave gaps between them. Modern AML technology can help bring those signals closer together. AML Watcher combines screening capabilities with contextual risk assessment through TruRisk, while supporting ongoing monitoring and entity-level analysis. Its screening infrastructure covers 235+ countries and states, 215+ sanction regimes, and 50,000+ adverse media sources. For banks, fintechs, and firms dealing with complex corporate structures, the Pandora Papers’ lesson is clear: knowing the customer is not always enough. Understanding who owns, controls, and connects to that customer matters just as much. Explore AML Watcher to bring offshore intelligence, adverse media, sanctions, PEP, and broader AML screening into a more connected risk process.
