The Panama Papers database that was made available on the website of the International Consortium of Investigative Journalists on Tuesday Japan time contains about 400 cases categorized as relating to Japan. The database lists about 230 individual names believed to be Japanese and about 20 Japanese companies.

Members of notable Japanese companies interviewed by The Yomiuri Shimbun uniformly expressed confusion, saying things such as, “We have no idea why our names were made public, because we didn’t evade tax.”

However, cases of tax evasion and asset concealment through the misuse of tax havens have been reported in the past.

Experts are calling for the latest cases to be thoroughly clarified by tax authorities.

‘Surprising’ announcement

“We use tax havens so we can facilitate procedures for establishing companies and speed up transactions.

The use [of tax havens] isn’t aimed at tax evasion or reduction,” said a spokesperson of a leading trading company based in Minato Ward, Tokyo.

The company, which founded affiliates in the British Virgin Islands, alleges that it makes tax payments appropriately based on legislation against tax havens and discloses in its financial reports that it takes such actions.

“We could lose social credibility if we’re deemed dishonest simply for being listed in the Panama Papers. It’s extremely upsetting,” the spokesperson said.

Another leading trading firm based in Chiyoda Ward, Tokyo, invested in companies founded overseas, including in Hong Kong.

“We aren’t benefiting from low tax rates. Doing such suspicious things would bring a greater risk if it was found out later and then became problematic,” the firm’s spokesperson said.

The company received a flood of inquiries, mainly from clients, after its name was disclosed in the papers.

“We have the problem of being mentioned in online message boards where there are assumptions that we’re avoiding tax payments,” the spokesperson said.

Money lost

The names of business entrepreneurs are also listed in the papers as stockholders of companies that exist in tax havens.

In 1996, a manager of a leading online shopping company invested ¥800,000(S$10,031) in a company in the Virgin Islands after being approached by a foreigner that an acquaintance introduced to him.

His company’s spokesperson told The Yomiuri Shimbun: “Our manager seems to remember only making a loss.”

About four years ago, a male professor at a private dental university in the Hokuriku region jointly established a company in the Virgin Islands with a Chinese financier who invested money for developing anticancer drugs.

Right after the company was established, however, the professor lost contact with the Chinese financier.

The company was since neglected and has conducted no transactions.

“I have no intention at all of making money [from using tax havens]. All I wanted was to do my research,” the professor said.

Tip of the iceberg?

“It’s unlikely that all the transactions conducted through the use of tax havens are clean,” said Go Kawada, a certified tax accountant and former Sendai Regional Taxation Bureau chief who is an expert on international taxation.

Wrongdoing via tax havens remains rife in Japan. One such case is the massive cover-up of losses by Olympus Corp. that was exposed in 2011.

Three former securities firm employees who helped Olympus hide its losses were found to have kept about ¥2.2 billion in remuneration from Olympus in the bank accounts of paper companies established in tax havens including Liechtenstein.

“Tax havens can be misused not only for out-and-out crimes, but also for tax evasion by exploiting gaps in tax rates, and for asset concealment using the nature of confidentiality of personal information,” Kawada stressed.

Aside from the law firm that became the source of the recent Panama Papers leak, Kawada said there are many brokers who arrange transactions using tax havens.

“The latest disclosure is just the tip of the iceberg,” he said.

Tax authorities in Japan are paying attention to the Panama Papers. The National Tax Agency announced Tuesday that it will try to gather information at every possible opportunity and conduct tax inspections whenever problematic transactions are confirmed, with the aim of realizing adequate and fair taxation.

Japan’s tax authorities are expected to exchange information about the companies and individuals listed in the Panama Papers with their overseas counterparts, according to sources.

They will collate information from the Panama Papers and information declared to them, and conduct inspections if there are problems.

Ten military staff members, including two in charge of the hospital that offered an experimental cancer therapy to a young man who died last month, have been punished.

The punishments were handed out after an investigation confirmed the hospital’s malpractice in business collaboration and the posting of misleading medical advertisements.

Two leaders from the Second Hospital of the Beijing Armed Police Corps were dismissed and six others received demerits.

Two other officials from higher military authorities who oversaw the hospital were given warnings for inadequate supervision, a statement from the Beijing Armed Police Corps said on Tuesday.

Two other individuals who collaborated with the hospital have been transferred to judicial organs on suspicion of having committed crimes, the statement said, without disclosing their identity.

Wei Zexi, a 21-year-old student from Shaanxi province, died on April 12 from synovial sarcoma, a rare cancer, after taking a type of immunotherapy at the hospital’s biomedical centre outsourced to private entities. In an online posting before his death, Wei said he was recommended the hospital while searching for the disease on Baidu, China’s equivalent of Google.

No direct link has been established between Wei’s death and the treatment he received.

The case has attracted widespread public attention, however, as it exposed the controversial paid listing business that Baidu relied on – which ranks search results based on the price advertisers pay – and the poor supervision of some military hospitals.

Military hospitals are not under the jurisdiction of government health authorities. Instead, health bureaus of the Central Military Commission and the national Armed Police Force oversee military-affiliated medical institutes. This creates management loopholes for some hospitals as military rules are not as transparent as government regulations.

Patients who received similar therapy at the hospital said they were not satisfied with the investigation results, and demanded more details and refunds.

A 33-year-old housewife from Shanxi province said the statement failed to mention whether patients involved in such therapy can get refunds.

She received a course of immunotherapy at the hospital last month and paid 28,000 yuan (S$5,900) after being diagnosed with human papillomavirus infection, a sexually transmitted disease. Her condition worsened after the therapy, and she later quit the reatment.

She said she is considering joining other patients to petition higher authorities.

A man surnamed Chen said his mother had received similar treatment for cervical cancer. “I think it (the statement) did not respond to our major concerns,” he said.

The hospital stopped receiving patients on Wednesday.

Liu Yuanli, dean of the School of Public Health at Beijing Union Medical College, urged the government or academic groups in China to set up independent Internet search services particularly for medical and healthcare-related information.

SEOUL – Recent satellite images show no imminent signs of a fifth North Korean nuclear test, following the conclusion of a party congress that many thought Pyongyang would mark with an atomic detonation, a US think tank said Wednesday.

The pictures, dated May 8, show low-level activity at the underground test site at Punggye-ri in the country’s northeast, and vehicles previously observed at the site’s command centre were “no longer present”, according to an analysis by the US-Korea Institute at Johns Hopkins University.

Earlier satellite images had shown closely parked vehicles at the command centre – usually only seen during final test preparations.

North Korea wrapped up its first ruling party congress in 36 years on Monday.

Click on thumbnail to view photos. Source: 

Reuters

South Korean officials and North Korea watchers elsewhere had warned of a high possibility that Pyongyang might – as a show of strength – carry out a test in the run-up to the conclave, or even during the event itself.

“That gathering is now ended and there are no apparent signs that a detonation will occur in the near future,” said the analysis.

But the low-level activity across the complex suggests it “remains capable of supporting additional tests once a decision to move forward is made in Pyongyang”, it said.

North Korea has conducted four nuclear tests. The most recent was on January 6, with Pyongyang claiming it marked the country’s first successful test of a powerful hydrogen bomb.

The UN Security Council responded by imposing its strongest sanctions to date over the North’s nuclear weapons programme.

At the ruling party congress, North Korean leader Kim Jong-Un praised the “magnificent and exhilarating sound” of the January test, and delegates adopted Kim’s report calling for an improved and expanded nuclear arsenal.