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EROSION OF BANKING SECRECY IN THE BAHAMAS
The recent news that the Bahamas have had Qualified Jurisdiction status bestowed upon them will be received with mixed emotion by offshore investors based there, and in particular, US investors and individuals with offshore savings. Although the new 'approved status' means that withholding tax of 30% on American source income need not be withheld, and reduced rates can be deducted under tax treaties in some cases, the approval of the IRS comes with conditions which could be seen as disadvantageous for customer confidentiality, as these advantages only apply to 'properly documented' jurisdictions.
Whilst focussing on the situation in the Bahamas, the intention is not to single them out. Other jurisdictions may be faring better or worse in the ongoing power struggle with the OECD/FATF/G7 countries, but the Bahamas (perhaps because of its popularity with US investors wishing to go offshore) seem to be a good example of the overall trend towards compliance in the offshore world.
For those of you who have been living in an ashram in Katmandu for the past few months (because that's the only way you would have missed it!), Qualified Jurisdiction status requires the implementation of KYC, or 'Know Your Customer' procedures; the bank or financial institution must monitor the financial behaviour of its clients, and is obliged to report any 'unusual activity' to the authorities.More on this story here.
BRITISH COLONIALISM LIVES!
LONDON. By the end of January BERMUDA and each of the British Caribbean "overseas territories" must submit to the UK Foreign and Commonwealth Office in London specific plans for creation of financial watchdog agencies, still stronger anti-money laundering laws and exchange of tax and banking information procedures. The Labour government demands these strict new OST laws by Sept. 30, 2001. "Colonialism," in case you forgot, is defined by Webster's dictionary as "control by one power over a dependent area or people."More on this story here and here.
... and BRIDGETOWN. As one commentator in former UK colony BARBADOS sees it: "The just concluded Barbados meeting with the OECD underscores the key lesson; you are either a colony or a player. Colonies will be happy to enter into new colonial arrangements. They will sign 'diktats' on how to fashion their sovereign, domestic taxation policies." Barbados will not.More on this story here.
VERY TRANSPARENT O.E.C.D.
At that Barbados meeting, OECD bureaucrats, who usually scream for "transparency," refused to allow US-based Center for Freedom and Prosperity observers to attend conference sessions as Caribbean nations asked. Is the OECD afraid of something?More on this story here.
And more members of the US Congress are challenging the OECD and its phony campaign against "harmful tax competition."More on this story here.
Caribbean Should Feel Vindicated By OECD Result, Carrington
A top regional official says the Caribbean should feel vindicated by the outcome of this week's special consultation in Barbados involving the Organisation for Economic Cooperation and Development (OECD) and blacklisted developing states.
The Secretary General of the Caribbean Community and Common Market (CARICOM), Edwin Carrington, was referring to broad agreement reached by the two sides on the principles of international taxation and to set up a working group to continue dialogue on contentious matters.
The January 8-9 consultation on Harmful Tax Competition followed a threat of sanctions by the OECD against 35 offshore financial jurisdictions, including 15 Caribbean ones, which angered the region.
Barbados' Prime Minister, Owen Arthur, who is the current chairman of the Community, led the region's fight to the grouping of rich industrialised nations.
During a news conference in Bridgetown Wednesday, Carrington singled out the Barbadian leader, who also chaired the meeting, for special praise. "That particular meeting was one which brought the world, as it were, to Barbados in response to CARICOM Heads of Governments' concerns expressed very forcefully at their 21st meeting in St Vincent and the Grenadines in July.
"Indeed, the meeting over the last two or three days really is a vindication of the CARICOM Heads of Government's approach and the result of their hard work, in particular that of Prime Minister Arthur," he stated.More on this story here.
JERSEY APPLAUDS OECD BACK DOWN
The JERSEY Financial Services Commission applauds the OECD back down at that infamous Barbados meeting two weeks ago. And they want the world to know Jersey will not abide "tax cheats."More on this story here and here.
CYPRUS SUICIDE IMPULSE SLOWS
NICOSIA. The polls here are finally waking up to the self-destruction from raising taxes and abolishing financial privacy laws. Coming elections may offer a cure for anti-offshore madness.More on this story here and here.
ANOTHER GRENADA BANK RIPOFF
VANCOUVER, B.C. Hundreds of Canadians are suing a Grenada bank for lost millions. The bank "guaranteed" 116% returns on investments. They believed it!More on this story here.
BELIZE - U.K. LONG DISTANCE CHARGES
BELIZE CITY. Belize Telcom has threatened to cut off the British High Commission's phones if it doesn't stop using callback services to phone London instead of paying usual LD rates. The UK's Lord Michael Ashcroft owns a big chunk of the telcom company (and of Belize).More on this story here.
U.S. ARRESTS TOP RUSSIAN FOR SWISS
NEW YORK. A top Russian ex-official was arrested yesterday on a Swiss warrant charging money laundering. Moscow is protesting loudly.More on this story here and here.
CLINTON EXITS UNDER HYPOCRISY CLOUD
WASHINGTON. Clinton leaves the White House as he arrived, in clouds of gaseous hypocrisy. The anti-offshore and anti-money laundering Clinton gang remains silent as Indonesian banking chief James RIADY pleads guilty to illegally funneling offshore funds to Clinton's campaigns.More on this story here, here, and here.
Add to his brazen hypocrisy, Clinton's last minute announcement of proposed rules to keep corrupt foreign money out of US banks.More on this story here.
EURO TO BE USED AS TAX EVADER BAIT
PARIS. France and other nations plan to use the January 2002 conversion to the euro as Europe's sole currency as a trap for alleged tax evaders and money launderers.More on this story here.
But IRELAND is going after tax evaders right now.More on this story here.
Meanwhile, RUSSIA is training tax collectors to main and kill, and CNN thinks that's amusing news.More on this story here.
BRAZIL ANTI-PRIVACY TAX ATTACK SLOWED
BRAZILIA. Court suits have stopped a new anti-tax evasion law that gave government the right to individual and corporate bank records without previous judicial authorization.More on this story here.
SOUTH AFRICAN EXCHANGE CONTROLS
JOHANNESBURG. Finally South Africa may be nearing an end to ruinous exchange controls that thwart needed foreign investments.More on this story here.
SINGAPORE FUTURE CLOUDY
Disappointing trade figures focus attention on Singapore's vulnerability to the US slowdown as well as political uncertainties in the south-east Asian region.More on this story here.
U.S. POLICE CONTINUE FORFEITURES
In spite of a reform of federal forfeiture laws last year, US police are doing all they can to keep on grabbing property.More on this story here.
Forfeiture Endangers American Rights (FEAR) home page here.
WALL STREET JOURNAL REPORTS BENEFITS OF GOING OFFSHORE
If you missed Mike ALLEN's excellent Wall Street Journal article about going offshore to escape US government regulation, it's available here.
CAYMAN ISLANDS URGE TAX HAVENS TO STICK TOGETHER
The Cayman Islands has been in the midst of the firestorm with the OECD and its negotiating teams have not only had their forays with that body, but have also had the pressure of taking action on the domestic front, to signal its cooperation.
Local attorney, Michael Alberga (in a presentation at the recent Miami Conference on the Caribbean and Latin America) has argued that the OECD's initiative on harmful tax competition, is, in the main, a ploy to "prohibit capital flow from high tax nations to low or no tax countries, abrogate the rule of law, disregard the rule of national sovereignty and put in place procedures to remove the right to privacy...with threats to use their economic might to bring to heel all of those who do not agree."
It's a view that has found resonance with many of the defenders of the position of low tax jurisdictions, even in member countries of the OECD. Indeed, in the United States, a pressure group, the Center for Freedom and Prosperity/Coalition for Tax Competition has been formed to lobby for maintaining competitive international markets, and against the OECD's policies.
Last week, the battle ground was Barbados, a meeting of "tax havens" and OECD representatives, at which the Cayman Islands was ably represented by Financial Secretary - the Hon. George McCarthy. With continued dialogue, it is becoming clear that discussion, negotiation and accommodation must replace the OECD's dictatorial stance.
Countries like Cayman, which have built successful economies on monies coming from people looking for low tax centres, must fight with everything they have, to preserve their livelihood.
In this light, Cayman Islands may well strengthen its bargaining position by employing international consultants skilled in negotiation and by holding its ground with others countries in a similar position.
For in this fight, size need not be an inhibiting factor. It is known that this little mouse has been known to roar.More on this story here.
COOK ISLANDS LIKES NEW TASK FORCE
The C.I. prime minister sees a victory for tax haven nations in creation of the new Task Force Working Group forced upon the OECD at the recent Barbados meeting.
More on this story here.
Cook Islands Government home page here.
Daniel J. Mitchell, chairman of the Center for Freedom and Prosperity (CFP), an anti-OECD leader at the Barbados meeting, gives an account of what happened in his revealing Wall Street Journal article.
Mitchell and the CFP will be in London this week to help defend haven nations during the new OECD task force meeting, Jan. 26-28. A public briefing is on Friday, Jan, 26, at 3:00 PM at the European Policy Forum, 125 Pall Mall, London. Space is limited. E-mail your reservation requests to: firstname.lastname@example.orgCenter for Freedom and Prosperity home page here.
END OF BAHAMAS ERA
NASSAU. A leading law firm here says the government's agreement to exchange tax information with the US "signals the dismantling of the tradition and practice of confidentiality in financial transactions" in The Bahamas.More on this story here.
NO CAYMANS TAX CHANGES?
GEORGE TOWN, C.I. A leading law firm here claims there will be no change in the Caymans zero tax regime due to OECD pressures. But what about tax information exchange?More on this story here.
Europe's Big One, Germany wants to bolster the European Union at the expense of national sovereignty. Britain and France don't agree.More on this story here.
RUSSIA'S NEW DICTATORSHIP
MOSCOW. Russia's latest dictator, ex-KGB agent Vladimir PUTIN, smoothly builds his new police state. He calls it "the dictatorship of the law," and of course, Putin is the law.More on this story here and here and here.
EXPENSIVE WORLD CITIES
The Economist annual survey of the 20 most expensive cities based on cost of living. Tokyo wins again. Belgrade is 2nd.More on this story here.
BRITISH TAXES: ELECTION ISSUE
LONDON. With a possible May general election looming, British investment taxes may become a major and defining issue.More on this story here.
JAPAN HAS YEN FOR BANKRUPTCY
TOKYO. Japan's corporate bankruptcy debt ballooned to a postwar high last year, fueled by a raft of failures.More on this story here.
NEW BASLE BANK RULES
BASLE, Switzerland. The Basle committee of banking supervisors publishes the most radical changes yet for bank regulation.More on this story here and here.
CLINTON PARDONS U.S. EXPAT
Bill Clinton's last minute clemency included financier Marc Rich, a billionaire commodities trader who has spent the last 15 years in Switzerland as a fugitive from US justice.More on this story here.
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