Who Says Offshore Banking Is Dead
After September 11, the Offshore Review readers that have contacted me, have changed their approach to the type of offshore structure they want to create.
In one respect, several of the emails I receive begin like this: “In view of all the recent erosions of confidentiality, I don’t suppose it is now possible to set up a useful offshore structure…” and I don’t doubt that there are several others who decide not to contact consultants like me because they agree with such views.
In another respect, as some governments are ensuring their power more and more these days, especially with asset forfeiture and reporting demands on banks, there are also some clients who desire to protect their hard earned assets. But their inability to realize that the rules have changed and that the action they take has to be different.
Back in the day, creating an offshore company and bank accounts in safe offshore islands was the way to do protect oneself.
These banks didn’t ask for much and even when certain signatories where identified, it was under the assumption that this information would be kept confidential. It used to be considered a criminal offence for banks or other financial institutions to reveal this kind of information to anyone.
The present controversy of money laundering from terrorists has made it more difficult to create accounts with the ease of the old days.
Big Brother governments today are instituting reporting demands on banks that previously did not have to do so. Being forced to shut down or potentially being sued is enough to have some of these banks report anything that is demanded.
Some of those jurisdictions that did not have to meet those demands before are now complying even though they’re telling their clients everything is confidential. Failing to report means banking licenses revoked (even in some of the Caribbean offshore islands).
Regardless of the confidential process of setting up an account, the ID required, or the nominees on record, it is safe to assume that sooner or later the confidential information will be at the hands of Big Brother.
What are some the proactive approaches to this kind of problem?
1) Presently having an account with a bank, broker, or credit card issuer requires some kind of ID that could potentially be revealed to the government. If the account is under an IBC and you are the director or the beneficial owner, then the best way to address this situation is by selling the IBC to another person or entity. Anything before that is considered potential irreversible damage, but anything after is on the right track. Who is doing the buying of your IBC is also important. The transaction can still be traced back to you so be careful! The new possibilities for ownership can fall under an IBC, a trust, or another individual trustee. I highly suggest expert advice during this process because it could bring negative consequences in the future.
2) If you current situation is one in which you are starting from scratch and would like to start on the right track with an anonymous account, then there are options. However, be careful of any packages presented to you that require any kind of ID that will be presented to the bank. By providing an ID when you are told it will be kept confidential still leaves you vulnerable to future scenarios where your personal identification may be leaked.
3) Some of the options include: Trusts, Individual Trustees, Banking Groups, or other third party arrangements to open such accounts. Whoever is going to “stand in” for you as the signatory or beneficial owner of the account will need to be a trustworthy person.
Though many IBC owners have their legal names on the accounts, the accounts have been operated via Nominee Directors, Powers of Attorney or Trustees. Having the proper management of the account when it is not you is very important in making sure everything works out in your favor. All of this will be senseless if the real identity of the beneficial owner is still known to the banks.
It does not end here. It is important to make sure that the transactions carried out under such accounts do not link the beneficial owner to the account. Sending funds directly to the account unless there is a necessary commercial explanation for it is not recommended.
Governments today are monitoring all transactions that go “offshore”. This includes the smallest transaction and any leading suspicion that can be avoided is essential. You can avoid this by using pass-through accounts, third-party invoicing or other similar methods.
If this is something you still want to do and would like more information on the process and options throughout the world, please visit our Q Wealth Report website for more information and details on asset protection. Also check out Peter Macfarlanes blog to learn more about private banking.