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HALF OF BAHAMAS BANKS MAY QUIT
The Central Bank governor says more than half of the 124 registered "managed" banks in The Bahamas may leave because of tough new laws.More on this story here.
CAYMANS DOING FINE
GEORGE TOWN. 7 of the top 50 banks have closed down, but otherwise business is said to be booming. Read the stats.More on this story here.
MONACO - PARADISE UNDER PRESSURE
The Financial Times new series of articles on the tax haven high net worth individuals love; things are booming but the French are mad.More on this story here and here.
SWISS WITHHOLDING TAX?
To meet EU demands, the Swiss may impose a uniform W/H tax on all Swiss accounts of EU nationals; but secrecy remains sacrosanct.More on this story here.
ITALY CHANGEOVER MAKES WAVES
ROME. Burlesconi's victory may hurt the euro, but The Spectator tells you the broader meaning and who Silvio really is.More on this story here and here.
GIBRALTAR, still a UK overseas territory, may hold a referendum on self-determination; SPAIN and the UK Foreign Office are upset.More on this story here.
HONG KONG DILEMMA
The government is in its most difficult position since Beijing took control in 1997 because of protests by the Falun Gong.More on this story here.
N.Z. BANK WINS COOK ISLANDS TAX CASE
Bank of New Zealand wins a NZ$44 million tax case, but NZ Inland Revenue may appeal to the UK Privy Council.More on this story here.
OECD BATTLE PICKS & PANS
WASHINGTON. The Center for Freedom & Prosperity (CFP), acknowledged leader in the battle against the OECD's phony war on tax havens, issues awards, good and bad, to the heroes and villains of the long running OECD farce. And US Treas. Sec. O'Neill is called a hero for conservatives.More on this story here and here.
A US Senator demands to know how Paris tax exempt bureaucrats spend their money and the OECD submits to its first ever audit.More on this story here.
AUX ARMES POUR LE EURO
PARIS. Thousands of police, para-military gendarmes, the army and satellite monitoring will be deployed to safeguard introduction of euro notes and coins early next year.More on this story here.
Stability of world financial institutions may be undermined by new rules claimed to reduce the risk of bank failures.More on this story here.
The US charges 90 people and businesses with using the Internet to con people out of US$117 million.More on this story here.
DENMARK: Reversing policy, the government is talking tax cuts to counter low tax offshore competition.More on this story here.
LONDON. Inland Revenue tax investigations will expand & intensify.More on this story here.
WHY FREE TRADE?
Free trade makes goods and services available to everyone, raising living standards for all.More on this story here and here.
DeBEERS BUYOUT BOOSTS R.S.A.
JOHANNESBURG. The giant diamond deal will bring an inflow of US$3.5 billion into South Africa, helping the rand exchange rate.More on this story here.
FACTS ON OFFSHORE HEDGE FUNDS
10 year history of offshore funds' amazing growth.More on this story here.
Why US persons should invest in offshore hedge funds.More on this story here.
The best of 2,000 offshore hedge funds worth $240 billion.More on this story here.
The haven nations offshore hedge funds call home.More on this story here.
Citigroup's purchase of Mexico's leading bank is welcome, but some fear dollars will drown Mexico.More on this story here and here.
E.U. POLICE vs. PRIVACY RIGHTS
European Union police plans to force archiving of all electronic communications clashes with personal privacy protections.More on this story here.
N.S.A. SNUBS ECHELON INVESTIGATORS
US security agencies cancel meetings with European parliamentary investigators seeking Echelon information.More on this story here.
O’NEILL LAYS OUT VISION FOR TAX
Paul O’Neill, US Treasury Secretary, has laid out a vision for a radical reform of the US tax structure, including a sweeping revision of the Social Security - or public pension - system and abolition of corporate income tax and capital gains tax on businesses.
In an interview with the FT at his Treasury office, Mr O'Neill espoused changes that would reach far beyond the legislation currently before Congress.
As the Senate moved ahead with the Bush administration's initial $1,350bn tax reduction plan, which Mr O'Neill expects to be signed into law next Friday, he expanded on his previous piecemeal attacks on America's tax system.
The present system was "an abomination" that required changes to its "very structure".
"Not only am I committed to working on this issue, the President [George W Bush] is also intrigued about the possibility of fixing this mess," said Mr O' Neill.
One of the most important moves, he suggested, would be abolition of taxation on companies. Corporate income tax, the main form of tax on US businesses, accounts for 10 per cent of federal revenues and has a top rate of 35 per cent.
Among other controversial ideas, Mr O'Neill questioned the the guarantees the government provides for full public subsidy of senior citizens' health care and retirement programmes. "Able-bodied adults who have the ability to earn income have an obligation not to pass part of their own responsibility on to a broader population," he said.
His remarks are bound to reverberate in Washington, where speaking about reductions in elderly care programmes has been taboo. Mr O'Neill's remarks reflect growing determination in the Bush administration to show its willingness to propose radical change to try to secure growth.
Abolishing corporate tax would inevitably lead to higher personal income taxes, but Mr O'Neill believes such a move would reduce the overall tax burden and promote economic growth.
Current corporate tax levels - and their administrative costs - were too high, he said. The system would work better if the government "collected taxes in a more direct way from the people, who were paying the taxes in any event".
Mr O'Neill said simplification of the tax code would also improve US global competitiveness. "It would certainly make us more formidable if we had a simplification of this sort."
Any increase in personal income tax would undoubtedly provoke strong voter opposition. Mr O'Neill, however, says he "absolutely" wants to eliminate corporate income tax. He also wants to do away with capital gains taxes on businesses, and indicated the administration was prepared to put this on a shorter-term agenda.
It is highly unlikely that other members of the Bush administration share every aspect of Mr O'Neill's reformist visions. But the fact that one of the most senior cabinet members would lay out such a detailed and radical programme is a sign that the administration has not been deterred by opposition to its initial tax-cut plan.More on this story here.
EC REJECTS TAX HARMONY AND TURNS TO LIFTING TRADE BARRIERS
THE European Commission is to abandon long-standing efforts to harmonise tax policy, concentrating instead on breaking down trade barriers and restoring the dynamism of the European economy.
A leaked copy of a new commission report, called "Tax policy in the European Union - Priorities for the years ahead", argues that different tax rates across the EU are not only acceptable, but positively beneficial.
"A reasonable degree of tax competition within the EU is healthy and should be allowed to operate," says the document, marking a radical shift towards free-market thinking in Brussels.
"Tax competition may strengthen fiscal discipline to the extent that it encourages member states to streamline their public expenditure, thus allowing a reduction in the overall tax burden." The report, due next week, says EU states should be "free to choose the structures of their tax systems as well as the tax rates and tax bases they consider most appropriate and according to their preferences", provided they respect single market rules.
The tone of the proposals suggest that Frits Bolkestein, the Thatcherite single market commissioner, has so far succeeded in driving through his free enterprise agenda within the "college" of 20 commissioners. This is despite fierce resistance from a socialist camp led by France's Pascal Lamy, the trade commissioner, who has pushed hard for harmonisation of corporation tax.
But Theresa Villiers, MEP, the Tory economics spokesman in Brussels, say the report is not as benign as it looks, warning it opens the door for Brussels to meddle for the first time in the area of personal income tax.
It states that very low rates of income tax can, in certain circumstances, be tantamount to a state subsidy for industry, violating the rules of cross-border competition. This could lead to a ruling by the European Court against the offending country.
The commission accepts that income tax has always been the preserve of member states but then goes on to say, "even this area it may be necessary to co-ordinate national tax systems in order to prevent discrimination in cross-border situations or to remove obstacles".
The Tories said the commission was switching tactics after its failure to abolish the national veto on taxation in the Nice Treaty last December. Since EU states can block legislative initiatives, the commission is now hoping to advance its agenda by other means, chiefly by using a so-called code of conduct group led by Britain's Dawn Primarolo, which is examining tax practices.
Mrs. Villiers said: "Labour sold us down the river on tax when they signed up to the code of conduct. They let Brussels get a foot in the door in direct taxes for the first time and now the EU is trying to expand the code to income tax, which Dawn Primarolo has repeatedly said would never happen."
The Tories also claim the new proposals could also threaten Britain's VAT exemption on food, books, and children's clothes. The report calls for a review of the different countries' opt-out when they come up for review after 2002.
But the Government insisted last night that the report is nothing more than a debating text. No initiative in the tax area can go ahead without the unanimous backing of the 15 EU states.More on this story here.
INTERNATIONAL AWARDS INSTITUTED IN OECD/OFFSHORE IMBROGLIO
Adding a rare touch of humour to the somewhat dour process of confrontation between the God-like OECD and the raggle-taggle pack of offshore jurisdictions which it has been tormenting, the Centre for Freedom and Prosperity has instituted two international prizes for people it sees as stars or boobies in the interminable back-and-forth that is defining the future of “offshore”.
The CFP Halls of Fame and Shame have as their first occupants (for Fame) Antiguan Prime Minister Lester Bird and High Commissioner Sir Ronald Sanders, while Shame is ladled out to Richard Hammer, Chairman of the Tax and Fiscal Policy Committee of the OECD's Business and Industry Advisory Committee.
Here is the CFP's announcement and explanation of its new awards:
'Fighting on the front lines of this issue, we have learned to appreciate strong allies. We also have learned that there are many who are willing to capitulate for personal advantage. As a result, we thought this would be a good time to launch an "Unsung Hero Award" and a "Benedict Arnold Award" for those whose actions demand special recognition.
'These awards, which will be an occasional feature of our weekly update, are designed to help the broader community get a better appreciation of the behind-the-scenes battle.
'The "Unsung Hero Award" goes to the person, institution, or government that has demonstrated special valor and commitment in the fight to preserve tax competition, financial privacy, and fiscal sovereignty. The first winner of this award is the government of Antigua and Barbuda. More specifically, Prime Minister Lester Bird and High Commission Sir Ronald Sanders have played a critical role in this fight. The Prime Minister's courage helped ensure that the Caribbean jurisdictions resisted the OECD's fiscal colonialism. Sir Ronald Sanders, meanwhile, has been an effective voice in London and elsewhere for the principles of freedom and competition. We also owe a special debt to Sir Ronald. It was his trip to Washington almost one year ago that helped trigger the events that led to the founding of the Center (okay, we may be a little biased as a result, but Sir Ronald deserves praise for everything else he has accomplished as well). Congratulations.
'The "Benedict Arnold Award," named after America's infamous Revolutionary War traitor, goes to the person, institution, or government that has demonstrated a special cowardice or incompetence in the fight to preserve tax competition, financial privacy, and fiscal sovereignty. As such, it does not go to those who started on the wrong side, have stayed on the wrong side, and always will remain on the wrong side (i.e., the government of France). Instead, it goes to someone who should be on the right side, but winds up aiding the forces of statism through either incompetence or venality. The first winner of this award is Richard Hammer, Chairman of the Tax and Fiscal Policy Committee of the OECD's Business and Industry Advisory Committee (BIAC). Mr. Hammer in 1999 helped oversee the publication of a BIAC report that was appropriately critical of the OECD anti-competition initiative (still available on the BAIC website). Earlier this year, however, Mr. Hammer did an about-face and co-authored an article endorsing the OECD's attack on tax competition. For selling out the interests of the business community - and for switching sides just as the OECD effort is falling apart, Mr. Hammer truly has earned the "Benedict Arnold Award." Congratulations.
The CFP Halls of Fame and Shame web page: here and here.
SPAM BILL GETS WHITTLED
A House committee scaled back legislation Thursday that aims to curb junk e-mail, cutting out provisions that would allow consumers to sue companies that ignored requests to be taken off their mailing lists.
The House Judiciary Committee also added a measure that would require pornographic messages to be labeled as such, allowing consumers to delete the messages without opening them if they so desired.
The bill, which passed on a voice vote after lengthy debate, bears more resemblance to another introduced by Virginia Republican Bob Goodlatte than the version approved by the Energy and Commerce committee in March.
Goodlatte, who sits on the Judiciary Committee, said he was pleased with how the bill turned out, while bill sponsor Heather Wilson, a New Mexico Republican, released a statement objecting to the changes.
The bill now moves to the Rules Committee, which will try to reconcile the two versions.More on this story here.
RADICAL SOLUTIONS EYED IN NET IDENTITY THEFT BATTLE
For $39.95, a thief can buy someone's Social Security number on the Internet, use it within minutes to get a credit card, then start buying big-ticket items like cars and jewelry.
About 1,400 times a day - or nearly once a minute - someone's identity is stolen.
"It's risk-free," James Huse Jr., the Social Security Administration's inspector general, told a House subcommittee Tuesday after a demonstration of the ease of Internet fraud. "Why wouldn't criminals do this?"
He said Congress should pass a privacy plan first debated last year to ban the sale of Social Security numbers and prohibit many companies from requiring customers to divulge their numbers. The Ways and Means Committee approved the bill last year, but it never came up for a House vote.
One House Republican says that's not enough and that all Americans should be assigned new Social Security numbers that the government would have to keep secret. Rep. Ron Paul of Texas wants the Social Security Administration to issue new numbers within the next five years. His plan would ban the use of Social Security numbers as identifying tools.
Any significant changes are opposed by banks, insurance companies, investment firms and pension fund overseers. Government officials also don't like the resurrected privacy plan because the government's massive system of record-keeping would have to be changed.
Charles Bacarisse, a district clerk in Harris County, Texas, said many Social Security numbers are already easily available, and regulations "will increase the burdens and costs on everyone while doing little or nothing to enhance anyone's privacy."
The Social Security numbering system was created 65 years ago for the tracking of each American's earnings. The government promised it would never be used as a national identification card, but the numbers now are widely used personal identifiers. They are available on many public documents, such as driver's licenses and court records.
Huse told the House Ways and Means Social Security subcommittee that Social Security information theft, "catalyzed by the Internet, has quickly become a national crisis."
Rep. Gerald Kleczka, D-Wis., told colleagues that he was so tired of being asked for the information that he made up a series of numbers when required by a toy store to provide his Social Security number.
Requests like that would be restricted under a bill that Kleczka cosponsored last year. The subcommittee chairman, Rep. Clay Shaw, R-Fla., said the legislation was being refiled this week. Besides curbing excessive circulation, the bill also would ban governments and private companies from selling Social Security numbers or displaying them on public documents.
Nicole Robinson of Oxon Hill, Md., Said she became a victim last year, despite following anti-fraud tips such as regularly obtaining her credit history to check for discrepancies. Robinson said a Texas woman got her information, apparently from health insurance records, and went on a $36,000, three-month buying spree.
"This crime continues to give me constant anxiety," said Robinson, who works for a government contractor and has had problems refinancing her home and getting loans.
About 1,400 people report fraud each week to the Federal Trade Commission. An estimated 500,000 are victimized annually.
Identity theft victims, like other crime victims, "feel personally violated," said Michael Fabozzi, a detective in New York. He said victims "are left to fend for themselves in attempting to clear their credit history and good name."
Fabozzi is the lead investigator in the case of Brooklyn restaurant busboy Abraham Abdallah, arrested in March and accused of trying to assume the identities of Steven Spielberg, Oprah Winfrey, Martha Stewart and many others.
"The tale of the busboy cyberthief is a frightening testimony to the vulnerability of the entire e-commerce system," Fabozzi said.More on this story here.
BIG 5 ACCOUNTANTS HELP IRS CHASE TAX EVASION
LONDON. Another layer of private banking secrecy is scraped away as offshore banks open their books to independent auditors working for the US IRS seeking tax cheats hiding money offshore.More on this story here.
CASH BUSINESS BOOMS IN ANDORRA
As the euro looms Spaniards are trying to unload hoarded pesetas. This mountain redoubt is happily raking in the cash.More on this story here.
BAHAMAS IBCs NUMBERS PLUNGE
NASSAU, The Bahamas. Drastic changes in offshore corporate laws here are decimating IBC registrations. In Jan. 2000 there were 3,368 new IBCs, only 781 in Jan. 2001. $20 million in tax revenue lost.More on this story here and here.
CAYMANS, MANX HIGH COURTS UPHOLD BANK SECRECY
GEORGE TOWN. In the Ansbacher Bank case a Caymans judge rules that the identities of clients cannot to be disclosed to Irish tax inspectors.More on this story here and here.
And a court in the ISLE OF MAN also rejects Irish tax collectors demands for information about Manx bank account holders.More on this story here.
CARIBBEAN BLACKS SLAM O.E.C.D.
They charge high tax G-7 nations are persecuting black majority small nations.More on this story here.
And Caribbean states see a new OECD threat to their economies.More on this story here.
JERSEY SAYS O.E.C.D. IN DISARRAY
ST HELIER. Officials say the OECD's blacklisting is falling apart.More on this story here.
And Jersey police plan to arrest anti-tax haven protesters from FRANCE if they dare set foot on the island. They've hired extra police!More on this story here.
N.Y. TIMES SLAMS BUSH ON TAX HAVENS
George W. must be right if The Times is upset.More on this story here.
PANAMA ECON STATS LOOK GOOD
PANAMA CITY. In spite of internal problems and outside pressure from the OECD, the Canal and Free Zones are booming.More on this story here.
EXPATS & BRITS PROFIT OFFSHORE
LONDON. The whys and hows UK citizens and residents can save taxes and make profits by going offshore.More on this story here.
Here's how to save taxes if you're a foreigner in the UK.More on this story here.
NIGERIAN SCAM STILL GOING
That old Nigerian bank scam has surfaced in the US again.More on this story here.
F.B.I. HUNTS NET FRAUD
Cyber fraud and cyber police are both increasing.More on this story here.
The euro is stuck in a rut because governments insist on using the conversion period as an excuse to collect more in taxes.More on this story here.
EURO BUSINESS MESS
1/3rd of all euro zone business aren't ready for the new currency.More on this story here.
DO NOT BE TOO DOMESTICATED
Why you should invest and diversify offshore.More on this story here.
CANADIAN TAX FOUNDATION TO MEET
TORONTO. Tax treaty benefits, tax havens, offshore profits, foreign exchange issues and non-resident trusts will be discussed in July.More on this story here.
Lots of developments on the anti-money laundering front recently:
NEW YORK. The National Association of Securities Dealers, the NY Stock Exchange and the SEC team up for a national ML sweep.More on this story here.
LONDON. British accountants are pressed into being government anti-ML agents.More on this story here.
MONTREAL. Sovereign Society advisor Prof. Pierre LEMIEUX explains "Why Big Brother Attacks Money Laundering".More on this story here.
EUROPE. Introduction of euro notes & coins on Jan. 1st means risk of money laundering, counterfeiting and fraud in Europe.More on this story here.
MOSCOW. The Russian Dumas creates a new anti-ML agency in an effort to get of the FATF blacklist and clean up their image.More on this story here.
KUALA LUMPUR, Malaysia. Warnings that the Internet is becoming a lucrative, new conduit for dirty money activity.More on this story here.
HONOLULU, Hawaii. The Asian Pacific region is a major ML area.More on this story here.
ABU DHABI, U.A.E. The Gulf states defend themselves against charges of rampant ML action in the area.More on this story here.
BEIRUT, Lebanon. Tough new anti-ML law adopted here.More on this story here.
DOES ENCRYPTION MAKE GOVERNMENT OBSOLETE?
Will new technology strengthen privacy or the rule of Big Brother?More on this story here.
EUROPEANS WARN AGAINST ECHELON
It is real, so defend against the threat, they urge.More on this story here.
U.S. SPIES TAP UNDERSEA CABLE TRAFFIC
The US National Security Agency, home to Echelon, has been taping undersea electronic international cables.More on this story here.
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