From Moscow to Reykjavik to Buenos Aires and beyond, the same two words are suddenly reverberating in financial circles: offshore accounts.
No sooner did a group of media outlets report that some of the world's wealthiest people, including politicians and business figures, had channelled billions through offshore accounts than the inevitable outrage began.
Public officials responded with outrage, bluster, denials, semi-denials or all of the above. Banks like HSBC and UBS Group AG stressed that they follow the rules and carefully vet customers. And regulators said what regulators often do: We'll look into it.
In many ways the articles, published by the International Consortium of Investigative Journalists, simply confirmed what experts have long known: Wealthy people, prominent or not, often use offshore accounts - and, in most cases, those accounts are perfectly legal.
Yet for political and business leaders, as well as their financial enablers, even legal offshore accounts can raise uncomfortable questions. The reports, said to be based on 11.5 million leaked documents from a Panama law firm, have once again trained a spotlight on the offshore ecosystem used by a global elite who at times seem to operate beyond conventional borders. As yet, the full scope of the allegations is unclear.
To some, the Panama Papers, as the documents are being called, could represent the tip of the iceberg. The ICIJ said its cache of leaks outlined more than 200,000 shell companies. The Panama law firm at the centre of the reports, Mossack Fonseca, has denied wrongdoing.
The law firm said in a statement to the ICIJ that it has "always complied with international protocols ... to assure as is reasonably possible, that the companies we incorporate are not being used for tax evasion, money laundering, terrorist finance or other illicit purposes".
"One leak exposed a global web of over 200,000 offshore shell companies: Imagine what leaks at other well-placed law firms and banks would expose?" Mark Williams, a lecturer at Boston University and author of Uncontrolled Risk, a book on the rise and fall of Lehman Brothers Holdings Inc., said in an e-mail.
"Global offshore money laundering is a multibillion-dollar business and remains alive and well," Williams said, speaking generally. "This leak is proof that despite explicit banking laws against tax evasion, criminal uses and money laundering, the global offshore shell game business remains open for the wealthy and well connected."
Within hours of publication, the articles prompted a political storm in Iceland, where the Prime Minister, Sigmundur David Gunnlaugsson, faced a no-confidence vote.
Gunnlaugsson told Parliament that the company mentioned in the ICIJ report "is a company in my wife's ownership and it has always paid taxes and been declared in our tax returns".
The reports drew a salty rebuke from a confidant of Vladimir Putin, the Russian President.
"It's bulls**t," Andrey Kostin, chief executive officer of the Russian VTB Bank, said in an interview with Bloomberg Television. The reports said Putin was linked to a "clandestine network" operated by his associates that had shuffled at least US$2 billion through banks and offshore companies. Almost invariably, the report said, money and power moved through that network "to companies and people allied to Putin".
Ukraine's President, Petro Poroshenko, who was named in ICIJ's reporting, said he didn't handle his own money. Argentina said its President, Mauricio Macri, had been a director of an offshore company but had never held a stake in it.
According to the ICIJ, the trove includes offshore companies linked to 12 current and former world leaders, as well as hidden financial dealings by 128 more politicians, public officials and entertainment celebrities. The account holders include current and former leaders from Georgia, Iraq, Jordan, Qatar, Saudi Arabia, Sudan, and United Arab Emirates.
While offshore holdings are usually legal, they can also be used to hide wealth. Since the 2008 financial crisis, Western governments have sought to shed greater light on offshore banking centers, arguing they can be used to avoid taxes or hide illicit funds.
Perhaps the most explosive claims in the reports involve links to Putin. The documents don't name the Russian President, according to the report. It outlined an example of its findings: the creation, within 24 hours, of a chain of four shell companies in three countries, involving two banks - a process that made the money behind it "all but untraceable".
The money-washing business is global in scope and will not be eliminated until banks, law firms and other enablers are held accountable
The Panama Papers landed at a tricky moment for the financial industry. The world's biggest banks, including HSBC and UBS, have paid billions in fines in recent years for helping wealthy clients evade tax or for failing to have sufficient safeguards in place to prevent money laundering. Such issues are moving to the centre of the political debate as rising inequality in the developed economies prompts a populist backlash.
"The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money," José Ugaz, the chairman of Transparency International, an advocacy group, said.
The reports drew a swift response from authorities in Europe. Regulators in Austria, the Netherlands, Sweden and Switzerland said they would examine the allegations.
Finma, the Swiss regulator, said in an e-mail it intends to "clarify" the extent to which Swiss banks may have used the services of Mossack Fonseca and whether banks violated Swiss provisions or banking supervisory rules.
The Dutch central bank, which is looking into trust companies and the potential for money laundering in professional soccer, will take the Panama files into account in the probe, the Finance Ministry said.
In Spain, where Pilar de Borbon, an aunt of King Felipe VI, was the president of a company registered in Panama, the tax authorities are already looking into potential tax fraud, El Mundo reported, citing a spokesman for the agency. The agency said it had no immediate comment. De Borbon didn't respond to ICIJ's requests for comment, according to the group's website.
The European Central Bank, which regulates Europe's biggest lenders; the UK's Financial Conduct Authority; and Germany's BaFin, declined to comment.
What makes an offshore account legal or not is often simply a question of whether it's declared to tax authorities, said Peter Hahn, a professor at London's Institute of Financial Services.
"Rather than blame the banks for such transactions, international attention should focus on requiring disclosure of the end of the chain owners of shell companies, eliminating the ability of the unscrupulous to misuse the banking system and create vast compliance costs for legitimate businesses," Hahn said.
Williams of Boston University was even blunter.
"The money-washing business is global in scope and will not be eliminated until banks, law firms and other enablers are held accountable and pay for facilitating such illegal actions," he said.
"Fines may not be enough. It might also be necessary to have the power to close down such businesses, creating the ultimate disincentive for such bad actors to break the law."