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I.R.S. NON-RESIDENT RULES OPPOSED
WASHINGTON. Witnesses at an IRS hearing demand withdrawal of proposed requirements that U.S. banks report to foreign tax collectors interest payments made to non-US residents.More on this story here.
OFFSHORE LAW FIRM EXPANDS
PANAMA based Mossack Fonseca & Co., specialists in offshore law since 1977, now boasts 20 offices worldwide, latest in Bangkok.More on this story here.
CARIBBEAN BANKS CLOSED
GRENADA (6) and ST. VINCENT (2) revoke 8 offshore bank licenses.More on this story here and here.
MONEY TO BERN
The country's capital and the surrounding canton, second largest in SWITZERLAND, attracts lots of new investment.More on this story here.
VOTE THAT SPOOKED EUROPE
Dan Mitchell analyzes the meaning of IRELAND's rejection of the Nice EU treaty.More on this story here.
SOUTH AFRICAN GLOOM
Investors foresee slow economic growth in South Africa over the next decade for many serious reasons.More on this story here.
WHAT COMES NEXT?
Now that the OECD and FATF sanction deadlines have come and gone, what happens next? An in-depth projection.More on this story here.
HEAL THY SELF
Most of the G-7 nations that back the OECD are themselves found highly deficient in fighting dirty money by FATF.More on this story here.
REACTIONS TO F.A.T.F. BLACKLIST
LIECHTENSTEIN is pleased they're off that list.More on this story here.
RUSSIA is singled out for dirty cash tolerance, but Dumas deputies postpone cracking down on money laundering.More on this story here.
ISRAEL stays on the list, but promises to do better.More on this story here.
EGYPT angrily says 'not guilty'.More on this story here.
GLOBAL TAX RAGE
The movement to limit taxes is gaining ground around the world.More on this story here and here.
SUPER MODEL FLEES TAXES
LONDON. The super model who is the national symbol of FRANCE flees Paris to evade taxes. Join the crowd!More on this story here.
TAX SHELTERS WORK
On Tuesday we reported that, against IRS objections, a US federal appeals court had upheld the validity of an offshore tax shelters that saved $1.8 billion for UPS, the major US delivery service.More on this story here.
For more about this and a companion court decision upholding tax shelters, see,More on this story here and here.
STARVE THE BEAST
WASHINGTON. The real reason the BUSH tax cut was needed; to keep the politicians from spending any and all surpluses.More on this story here.
EURO ZONE CASH FLIGHT
The euro-zone suffered a net outflow of investments over E100bn (US$86bn) in the first 4 months of 2001, twice that of the same period of 2000.More on this story here.
WEALTH MANAGEMENT CHANGING
A study says the loyalty of wealthy clients to financial service providers is undergoing a dramatic shift.More on this story here.
EU BACKS POLICE SPYING
EU ministers approve a British backed measure to allow police access to telephone, e-mail and Internet records.More on this story here.
ECHELON PROBE POSSIBLE
WASHINGTON. New reports that Echelon spies on Japanese business creates more pressure for the US Congress to investigate.More on this story here.
BIG BROTHER COMES HOME
New technology identifies computer users based on their keystrokes and mouse movements. LINK:More on this story here.
MONEY LAUNDERING IN FRANCE
"France, riven by money laundering and graft scandals reaching to the highest levels of government, is one of the most corrupt of all developed countries, according to a new international study."More on this story here.
And its highest officials have used a secret annual $50 million slush fund to line their pockets and pay off political debts.More on this story here and here.
Finland, Denmark and New Zealand were ranked as the cleanest countries, and it was bad news for Europe, as the UK ranked 13th, Germany 20th, and France 23rd.More on this story here.
For more on the level of corruption in 91 rated nations, see the latest rankings at,More on this story here.
Following the latest blacklisting of alleged dirty money tolerant nations, HUNGARY is the only European nation on the list.More on this story here.
And one of the 3 "worst" FATF listed nations, the PHILIPPINES, is rushing new laws into place to get off that blacklist.More on this story here.
SWISS CITIZENSHIP RULES MAY EASE
Parliament will consider easing restrictions on granting residents citizenship, but voters must approve in a referendum.More on this story here.
SWISS LAX ON DIRTY MONEY? The ex-head of the Swiss anti-ML agency knocks the government for lax enforcement.More on this story here.
MONACO CLEAN UP
With $48bn in 44 banks, the principality cleans up its image.More on this story here.
HONG KONG UPDATE
While Hong Kong is still rolling in cash...More on this story here.
...the people of the former UK colony feel no more attached to CHINA than they did to Britain.More on this story here.
CAYMAN ISLANDS STATUS
GEORGETOWN, C.I. New IBC incorporations are down 33% from last year, but only a few banks have folded.More on this story here.
ST. VINCENT CITIZENSHIP
A report that St. Vincent & the Grenadines has ended its economic citizenship program, 1 of only 4 still available, along with GRENADA, ST. KITTS and BELIZE.More on this story here.
I.R.S. NON-RESIDENT RULES MAY DIE
WASHINGTON. Last Friday we told you about growing opposition to IRS proposals that US banks be forced report to foreign tax collectors interest payments made to non-US residents.More on this story here.
Yesterday the Wall Street Journal reported that direct intervention by BUSH White House economic guru Lawrence LINDSEY may kill the rules altogether. US banks could lose billions.More on this story here and here.
ASIAN PRIVATE BANKING BOOM
As countries around the region recover from the late 1990s' slump, Asia's private wealth grows and private banks are expanding. Interesting report from the Far Eastern Economic Review.More on this story here.
CANADA TAX FREEDOM DAY
Canada celebrated Tax Freedom Day on Friday, 5 days earlier than it did last year, according to a report released by The Fraser Institute.More on this story here.
TAX CUTS IN ITALY
ROME. Prime Minister Silvio BERLUSCONI proposes measures aimed at stimulating the economy, including tax cuts.More on this story here.
BRITS AND THE EURO
LONDON. Single currency accounts for UK residents may be best as the continental euro deadline approaches.More on this story here.
HEDGE FUNDS ARE HOT
In a nervous investment environment, nearly $7bn flowed into hedge funds in the first quarter of 2001.More on this story here.
U.S. ESTATE TAX CHANGES
Noted asset protection attorney Gideon ROTHSCHILD explains the complex, contradictory provisions of the US estate tax "repeal."More on this story here.
IRS HITS TAX PROTESTERS
The feel good IRS goes after US tax protesters.More on this story here.
BANK 'DEBENTURES' AGAIN
An expert explains in detail the continuing fraud that is bank debentures. Don't get swindled!More on this story here.
ECD AGREEMENT GIVEN CAUTIOUS WELCOME BY US LOBBYISTS
While official confirmation of the deal struck at the OECD in Paris this week on its “unfair tax competition” initiative was still awaited, further details emerged yesterday, confirming that offshore jurisdictions could be subject to economic sanctions starting in 2003 if they do not provide information to tax authorities in OECD countries seeking data in specific tax enquiries. They could not refuse a request for information on the ground that the alleged tax violation was not a crime under their own laws.
The OECD has also compromised on its desire to remove “ring-fencing”, in which governments allow foreign-owned companies to be taxed at minimal rates or not at all while local companies are taxed at higher rates. The US Treasury did not want to appear to be dictating tax rules to smaller countries. Under the agreement, a ring-fencing regime won't by itself make a country subject to sanctions, but it will be a criterion for being labeled by the OECD as a tax haven.
The agreement, reached by the OECD's Fiscal Affairs Committee, is "a compromise that allows everybody to save face," said an official familiar with the details.
The Center for Freedom and Prosperity, however, which has been prominent in the campaign to stir up US administration hostility towards the OECD initiative, is not convinced that the agreement gives offshore jurisdictions sufficient protection against oppressive behaviour by the OECD and its members.
Andrew Quinlan, president of the Center for Freedom and Prosperity issued the following statement:
"Thanks to U.S. leadership, the OECD has been forced to retreat. Deadlines have been pushed back. Threats of financial protectionism have been reduced. Indeed, the Paris-based bureaucracy has thrown in the towel on its tax harmonization agenda. Equally important, they have been forced to scale back their "information exchange" assault on financial privacy. That's the good news.
"The bad news is that the OECD is still demanding that other countries have an obligation to help enforce the oppressive tax laws of OECD member nations.
"The Center will be increasing its public education campaign in the coming months. Given all the developments in recent days, we will repel the OECD's fiscal imperialism. In the last 10 days alone, for instance, House Majority Whip Tom DeLay and two top House Committee chairmen, Rep. David Dreier of California and John Boehner of Ohio, have come out against the OECD's dangerous information exchange agenda. Leading grassroots groups like the Free Congress Foundation, Americans for Tax Reform and Citizens for a Sound Economy also have weighed in against the OECD's anti-privacy initiative.
"Tax competition, financial privacy and fiscal sovereignty should be celebrated, not persecuted."More on this story here.
US TREASURY COMMENDS FATF
Following the recent announcement made by the FATF updating its international blacklist, the US Treasury has issued a press release stating its support for the multilateral countermeasures approved against Russia, The Philippines and Nauru over their lack of cooperation in the global fight against tax fraud and money laundering.
“The Treasury Department supports countermeasures against countries refusing to implement constructive legal reforms to address ongoing money laundering concerns,” said the release. However, Treasury Secretary Paul O’Neill was full of praise for the Bahamas, the Cayman Islands, Liechtenstein, and Panama, all of which had successfully worked to have themselves removed from the blacklist, and called the results achieved by the effort “dramatic”. “We applaud the legal reforms made by these countries,” he said on Friday. “These improvements are a testament to the effectiveness of international cooperation in combating money laundering, and I’m optimistic that the FATF process will generate further progress.”
The Treasury urged all of the seventeen countries which remain on the blacklist (which contains six new additions) to act swiftly to implement reform, and said that the US intended to update its advice to financial institutions as necessary to reflect the FATF findings. It added that no measures would be taken against Russia, the Philippines and Nauru if they adopted reforms by September 30th. However, if the blacklisted countries fail to make improvements to their regulatory regimes by the deadline, they could face sanctions including enhanced surveillance and reporting.More on this story here.
ANOTHER HATE SITE TRIAL IN FRANCE
A potentially landmark Internet content trial opens Friday in the same courtroom where Judge Jean-Jacques Gomez made worldwide headlines last November by ordering Yahoo to prevent people in France from accessing sites that sell Nazi memorabilia.
This time, a French group is suing a group of French Internet service providers for denying a request to block access to a portal called Front14.org that proudly bills itself, at the top of its homepage, as "Online hate at its best."
The site, until recently run from an Alaska ISP called General Communication Inc., operates websites for several hundred affiliated groups, including "Women for Aryan Unity" and "Las Vegas Skinheads." Other ISPs in Europe, such as Swisscom and Sunrise-Diax in Switzerland, have agreed to block users from accessing the site.
"It's especially for Nazis," said Stéphane Lilti, lead attorney in the case and also vice president of the anti-racism group International Action for Justice, which is bringing the case. "You have a hosting service, a mail service, you have advertising -- anything you need when you want to make a political site."
"In France, never have we asked the provider to block a site. But now it's time to do it, because we have no choice. In the United States you can do nothing, because they have their First Amendment, and that's where all the neo-Nazis go. We want to be protected in France, so we have no choice but to ask the ISPs to do their job. If they don't want to do it, we ask the judge to tell them to do it."
The roster of French ISPs named in the suit includes such heavyweights as AOL France and represents the vast majority of French Internet users, guaranteeing a high profile for the case.
Jean-Christophe Le Toquin, executive director of France's Internet Service Providers Association -- the umbrella group representing the ISPs -- said the legal battle could be fierce. He said the tone of the dispute could easily turn nasty.
"The problem is we would have liked to have had some discussion with the organization that is suing us before we go to court," he said. "We are not so much surprised by the issue, but by the way we are going to court without having any informal, friendly talks with an organization whose goal is close to ours. We both try to lessen the impact of racism on society. So we are disappointed."
The ISPs will defend themselves before Judge Gomez by arguing that under the terms of European Parliament law governing e-commerce, ISPs are not allowed to monitor Internet traffic.
But Lilti, the attorney who will be arguing against the ISPs, made clear that his group is not asking that all Internet traffic be monitored, only that ISPs take action when certain sites are called to their attention.
"We asked them to block the front14 site," he said. "You have to be a racist to be hosted there. It's very easy to do technically. They answered: They don't have to judge the material. They told us they have the duty of neutrality. We don't agree with that. Not that they have a duty to see everything on the Internet, but we signaled them about this site."
Already, he said, the lawsuit seems to have had an impact.
"I filed a complaint against the company hosting the site, but they changed the hosting," he said. "I think they changed it because of my lawsuit. I wrote to the company and asked them to block the site to France. If they want to use it in North America, I don't care. But after that there was not the same hosting company, General Communication Inc."
Michael Geist, a professor at the University of Ottawa Law School who specializes in Internet law, said via e-mail that the case before Judge Gomez was potentially significant in that it could provide legal precedent for the first time to put the onus of content-monitoring on ISPs. Typically, he said, such responsibility has only emerged when ISPs host the content.
"This case would take the next step -- actually placing a positive obligation to block," he said.
The economic impact could be substantial, he added, since court-directed regulation of Internet content could put companies in a difficult position. "For example, with AOL France one of the named parties, they might choose to pull out of the country rather than face the risk of liability," he said.
Le Toquin, of the ISP group, hopes to avoid such a drastic outcome.
"We have had a lot of pressure for years from people asking us to filter the Internet, so we are not so surprised that it's happening now," he said.
"We've been working on this issue for four years. What we have done so far is we have a hotline about racism. We are working on a filtering tool, Icra.org, which is an international tool, and for three years since we were set up, we have been trying to fight the racism and harmful content for minors."More on this story here.
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