Offshore havens: The tentacles of banking, accountancy and tax law stretch around the globe Joe Parks/Flickr

For those of us who have been investigating offshore secrecy for decades, the Panama Papers leak has not come as a surprise. The sordid truth is that offshore law firms are key to the secretive offshore economy.

Mossack Fonseca has reportedly acted for more than 300,000 companies, half of which are understood to be registered in British-administered tax havens, as well as in the UK itself. The law firm operates in tax havens like Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.

The leaks have given an insight on the private wealth of 72 current or former heads of state who have used shell companies and offshore accounts, often through close associates or family members. Mossack Fonseca denies any wrongdoing arguing it has acted beyond reproach for 40 years and that it cannot be blamed for failings by intermediaries.

Firms like Mossack Fonseca create the shell companies and the offshore trusts and foundations which their clients can use to hide their identity. They also provide the nominee directors and shareholders used by their clients to avoid disclosing personal identities.

Law firms use the privilege of client confidentiality arrangements to block investigation and protect their clients from prosecution. The biggest surprise is that they have been able to get away with this monkey business for such a long time.

Mossack Fonseca is one of the giants of the offshore world and has held that position for decades. I used them extensively when I was working offshore in Jersey in the 1980s, and even then they already had a reputation for extreme secrecy and "discretion" on their clients' behalf.

I returned home to Jersey in 1986 to investigate offshore activity from within. Being a Jerseyman gave me the necessary cover, but once I decided to go public with what I found, fellow Jersey residents were not happy about the revelations.

Panama is one of the most secretive and least cooperative jurisdictions on the planet

It is not a coincidence that Mossack Fonseca is based in Panama since this is one of the most secretive and least cooperative tax jurisdictions on the planet. The Tax Justice Network's Financial Secrecy index, which is published every two years, currently ranks Panama at number 13 in the world, which takes account of both the high level of secrecy and weak commitment to tackling money laundering, and also the scale of the offshore economy in Panama.

In a report on the country published in November 2015 the TJN noted that "Panama remains one of relatively few secrecy jurisdictions today that are unashamedly holding out against global transparency measures, and precious little has been done to tighten up".

If the City of London's offshore activities are combined with the activities of the Crown Dependencies and Overseas territories, many of which have high secrecy scores under the Financial Secrecy Index scoring system, the UK would rank higher than Switzerland on the FSI, the latter currently at the top of the global ranking.

Panama stands out from other tax havens as wanting to be seen as a blocker of international attempts to tackle offshore secrecy to such an extent that we described the Panamanian government in 2015 as having "a finger (or two fingers, or a fist and forearm, depending on your cultural background) raised in the general direction of the international community and the rule of law".

Trying to tackle offshore secrecy is like trying to wrestle with a deep sea octopus in the dark.

As most financial investigators know, any offshore structure involving Panama should trigger red warning signals, since this is a tell-tale sign that something is being hidden from someone. Mossack Fonseca, and similar offshore law firms have denied responsibility for the activities of their clients, yet they have a legal duty to flag up suspicious transaction reports whenever there is even the slightest hint that their client might be engaged in nefarious activity.

It is also important to recognise that offshore law firms like Mossack Fonseca do not operate in isolation; they rely on intermediaries, often other law firms or banks, to refer clients and provide support for the sophisticated cross-border structures needed by politically-exposed clients or other members of the global financial elite who want to hide their activities.

So a law firm in Panama may well work closely with a bank in Luxembourg and a company administration agent in Jersey, involving at least three separate secrecy jurisdictions and entirely separate secrecy enablers. This is why trying to tackle offshore secrecy is like trying to wrestle with a deep sea octopus in the dark.

I welcome this leak and hope it will put pressure on the legal profession generally to clean up its act across the world.

John Christensen is Director at the Tax Justice Network