BUSINESS NEWS - The secret world of offshore banks and money-laundering has been under the microscope ever since the financial crisis. Now it is the turn of lawyers, registrars and the hidden network of facilitators.

The treasure trove of 11.5 million documents leaked – or more precisely stolen – from Panama law firm Mossack Fonseca lifts the lid on the extraordinary practices of the global elites.

The papers show how front companies and special financial arrangements are being used by off-shore organisations alleged to be linked to terrorist organisations, drug cartels, sanctions-busting operators, sports and film stars and politicians.

The files on 213 000 companies first slipped to Germany’s Suddeutsche Zeitung newspaper and then shared with the International Consortium of Investigative Journalists (ICIJ) form the biggest data leak in history.

It will have long-lasting ramifications as the avalanche of allegations has barely begun.

Yet the scandal has already triggered a string of criminal investigations around the world, kicking off in Australia and New Zealand within hours. Later, German Vice-Chancellor Sigmar Gabriel said the files went far beyond issues of tax evasion, touching on vital national interests and the rule of law.

“It is about organised crime, evasion of UN sanctions and terrorist finance,” Gabriel said.

“This shadow economy is a risk for global security. We must ban the anonymous letterbox companies.

“The international community must ostracise any country that allows these dirty dealings,” Gabriel said.

Mossack Fonseca’s clients include 23 people under sanctions for helping North Korea, Russia, Iran, Syria, and Zimbabwe.

The Israeli newspaper Haaretz reported that 33 of those named were on the US blacklist for terrorism.

Panama has cornered the trade in anonymous shell companies that allow owners to disguise their identity and carry out global operations secretly.

While this may be legitimate for those in the limelight trying to protect their privacy or to safeguard sensitive corporate dealings, many use it to avoid detection for moneylaundering, tax avoidance or predatory behaviour.

The country has pushed through reforms in a bid to clear its name and get off a “grey list” of uncooperative tax havens, but has clearly not yet done enough.

Clamps and laws in a growing number of countries have resulted in “undeclared clients” having to come clean, but those not willing to comply still use Panama.