When Donald Trump imposed tariffs on imports from most countries in the world in early April, the US was heavily criticized. The tariffs even affected remote Australian islands that are inhabited only by penguins, birds and seals.
"Penguins against tariffs"
The case of Heard and McDonald Islands, which are a possession of Australia, seemed particularly absurd, writes the German public media ARD in its publication on the subject. Trump's tariff policy, which also affected these islands, was met with indignation and ridicule.
The islands, which can only be reached by sea and the boat trip takes about two weeks, have become a real celebrity on the Internet, where users have competed to joke that penguins have been spotted demonstrating against Trump's tariffs. There have even been T-shirts with the inscription "Penguins against tariffs", the publication points out and also quotes the reaction of the then Australian Trade Minister Don Farrell: "Poor penguins. I don't know what they did to Donald Trump, but, to be honest, I think this is a rash act." Was it all a mistake? An investigation by the German media WDR, NDR and "Süddeutsche Zeitung" (ZC) shows that there may be something bigger behind this.
How uninhabited islands are traded
According to World Bank trade statistics, Heard and McDonald Islands do indeed do business, including with the United States. Data for the last 15 years shows that metals and machinery are exported to the United States and various goods, including animals, are imported from there.
In 2022, for example, the islands exported more than $1 million in "machinery and electrical appliances" to the United States, the statistics show. Apparently, the Donald Trump administration used these statistics when deciding which countries and territories to impose tariffs on. But how does trade take place on islands that are uninhabited and where there are no buildings, roads or ports, asks ARD.
In any case, the World Bank has no explanation for this, it is clear from the response to a query sent to it by the team of investigative journalists. Australia has not responded to the query, but previous examples of leaked information about offshore zones, such as the "Panama Papers" or the "Pandora" files, give reason to conclude that the inclusion of the islands in the customs policy may not be so absurd.
Part of the offshore world
The leaked information reinforces the impression that Heard and McDonald Islands are more than just a nature reserve. The data includes, for example, tax agreements that Australia concluded between 2008 and 2011. with well-known tax havens, including the Cayman Islands, the British Virgin Islands and Mauritius. In these agreements, the parties agree on mutual exchange of information and other tax issues, which is not unusual.
The documents also explicitly mention the uninhabited Heard and McDonald Islands. Thus - unintentionally or intentionally - these islands have become part of the offshore world, in which remote places can sometimes play a surprising role, ARD further writes.
In 2012, shortly after the conclusion of the agreement, the Heard and McDonald Islands began importing and exporting - at least on paper. The data shows that in 2012 and 2013, goods worth a total of almost half a billion US dollars reached Sub-Saharan Africa through them. In 2017 a new export was made - again to Sub-Saharan Africa and in almost the same amount, the data show.
Address registrations on a deserted island
The islands have also been used for other types of manipulation, it is also clear from the investigation by WDR, NDR and ZC. People registered, for example, in China or Hong Kong, have been identified who have indicated Heard and McDonald Islands as the place where they live. The islands also appear in the instructions for filling out customs documents in Hong Kong - as the place of origin or as the place of delivery of shipments.
The islands are not unknown in the banking world either. For example, in the national bank of the Cayman Islands, which mainly deals with offshore activities, there is information about numerous transfers from or to accounts registered on Heard and McDonald Islands. In September 2018 alone, more than 300 such transfers were registered in a single bank. The National Bank of the Cayman Islands did not respond to a request from investigative journalists from WDR, NDR and ZC.
Major banks have also included the islands in their lists, which means that customers were apparently able to open an account and indicate the uninhabited islands as their place of residence - even though there are not even streets there, we read further in the ARD publication.
In 2019, the Australian government provided data under the guidelines of the Organization for Economic Co-operation and Development (OECD), according to which almost 1 million Australian dollars were held in accounts whose owners indicated Heard and McDonald Islands as their place of residence. Just a year earlier, about 150,000 Australian dollars were reported for the islands.
According to Christoph Trautfetter of the organization "Tax Justice Network", this can bypass the banks' money laundering filter, since the islands do not appear on any blacklists. "If a bank allows account holders to indicate these islands as their place of residence, this cannot be considered honorable," the expert commented.
And what does the Donald Trump administration say on the subject? The US government and US customs authorities did not respond to inquiries from German investigative journalists.
Authors: Petra Blum (WDR) | Katharina Felke (NDR)