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DID TONY BLAIR’S WIFE USE AN OFFSHORE TRUST?
LONDON: Australian Peter Foster, whose past includes conviction for fraud, threatened to reveal everything about the scandal that has dogged British Prime Minister Tony Blair and his wife Cherie for the past 14 days, in a move bound to set more alarm bells ringing within Mr Blair's administration. All manner of scandal threatened. “The unanswered questions in this affair continue to multiply”, said London paper Daily Mail in an editorial.More on this story here and here.
JERSEY, ISLE OF MAN NEWS
Jersey leader warns loss of island’s self-confidence hurts business. Stresses the need for self-belief.More on this story here.
Lloyds Bank ends Isle of Man private banking, trust services. International private banking accounts will be transferred to the bank’s Jersey and Guernsey operations, and trust cases will be moved to Guernsey and Gibraltar.Full story here.
MALTA E.U. ENTRY MAY HELP REPUTATION
VALETTA: With the adoption of European regulations vis a vis offshore services and money laundering, official voices hope that entry into the E.U. will free Malta from suspicions about it. Financial services account for 12% of the small country’s GNP.More on this story here.
SWISS COURT ORDERS US ANTI-TERROR INVESTIGATION COOPERATION
LAUSANNE: High court waives bank secrecy to honor US request in Islamic charity anti-terror investigation, rejecting an attempt to prevent U.S. investigators from getting information about a Zurich bank account that funneled money to the charity with alleged links to al-Qaida. $1.4 million was transferred between June 2000 and September 2001 to the Chicago-based Benevolence International Foundation. The tribunal said the decision to hand over bank details was justified because of the seriousness of the alleged crimes, including money laundering and running a criminal organization. However, further attempts to to block the information transfer are pending.More on this story here.
BAHRAIN PLANS MAJOR BANKING CENTER
$1 billion to be spent for “Bahrain Financial Harbor”. Project will consist of 18,500 offices, 1,500 residential spaces, a hotel and conference centre, an opera house, a financial hall, shops, maritime facilities and recreational facilities.More on this story here. Background information on Bahrain available here.
WHAT IS HAPPENING IN SOUTH AFRICA
STELLENBOSCH: ANC re-elects Mbeki as party head. Mbeki pledged earlier to stick to market-friendly economic policies and to redress South Africa’s racial wrongs, saying neither leftists nor white bombers would stand in his way. Threatened a crackdown on growing corruption by public servants and local politicians, but made only passing references to AIDS, Zimbabwe and violent crime. Eight years after the end of the apartheid system of racial discrimination, income disparities between majority blacks and the 10 percent white minority remain huge. The official unemployment rate is 30 percent. Mbeki said white right-wingers who launched a bombing campaign in October to overthrow ANC rule would never succeed and he praised blacks for resisting the urge to retaliate.Rest of coverage here.
OLIGARCHS STILL RUN RUSSIAN ECONOMY
MOSCOW: During his presidential campaign, Putin declared that “the oligarchs will cease to exist as a class”, yet with few prominent exceptions, the tycoons have prospered and even consolidated their holdings. Just eight oligarchic clans now control 85% of the value of Russia’s top 64 private companies, according to a study; the combined sales of the 12 top private companies alone equal the revenue of the government. Just as before, oligarchs get richer while sometimes swindling minority shareholders and manipulating a pliant court system in battles for domination of the country’s economic resources.
Rather than eliminate oligarchs as a class, Putin has institutionalized them and, to an extent, tamed them into more seemly behavior. Instead of giving favorites the run of the Kremlin, as Yeltsin had done, Putin meets with oligarchs as a group on a regular schedule with fixed agendas. The battles of the 1990s have morphed into more polite, less violent, though still fierce contests. “It’s as intense as before -- there’s no big change. It’s less criminal than before,” said Peter Aven, president of Alfa Bank and a minister in Yeltsin's government. Under Putin, the oligarchs are free to assemble great wealth as long as they stay out of the political arena. “He wants business to make business and not to do politics. Politics is not as much on the agenda as before.”Complete story here. (Quick, nonintrusive, registration required.)
UNEXPECTEDLY LARGE CROWD OF 20,000 MARCHES AGAINST HONG KONG LAW
Beijing-sponsored “anti-subversion” law Article 23 arousing fears. People found guilty under the new law can be imprisoned for life. Critics say the law is so loosely written it would let the authorities trample on people’s freedoms or ban groups the government does not like. Pro-democracy politicians and human rights activists have been joined by businessmen who fear the legislation could damage Hong Kong’s role as a business center. Wealthy newspaper publisher Jimmy Lai, who joined the marchers on Sunday, said the law was like “an invisible, tightening collar”.More on this story here and here.
BAHAMAS DELAYS “KYC” LAW IMPACT
NASSAU: “Know your customer” rules put off until end of 2003. Had the extension not been passed, a financial institution not having verified an existing customer by December 1, 2002, would result in his/her account being transferred to the Central Bank - approximately 57.5 percent of all accounts currently. “[Overly prescriptive requirements for KYC documentation under the Regulations] has resulted in a significant expenditure of resources by financial institutions harassing long-standing well-known clients for pieces of evidence,” said Minister of Financial Services and Investments.More on this story here.
BERMUDA TO BECOME ASSOCIATE MEMBER OF CARIBBEAN COMMUNITY (CARICOM)
Premier Jennifer Smith said Bermuda already has observer status and it was a natural progression to move onto associate membership. Opposition United Bermuda Party insisted no convincing evidence had been presented about the benefits to the Island, and Bermuda’s reputation could be tarnished in the US and Britain through closer association with Caricom.Just about everybody gets his/her say here.
COSTA RICA SCHEME COLLAPSE HITS EXPATS
SAN JOSE: Collapse of Brothers Fund hurts 6300 American expatriates.More on this story here (mildly intrusive registration required) and here (subscribers only).
EAST INDIA COMPANIES FIRST OFFSHORE SCAMS?
Corruption, crime, chicanery. Economies are capable of recovering and making progress, not only from physical devastation, as with Germany and Japan after World War II, but also from grand-scale economic chicanery. After bubbles collapse and interfere with economic growth, the resulting loss of income stimulates efforts, honest and corrupt, to maintain and increase income. Large scale scams may have begun in 1600 with the establishment of the British East India Company. Litany of rogues has followed, as recounted by renowned economic historian.More on this story here.
COMING BATTLE OVER AMERICAN TAXES
WASHINGTON: Business Week gives a complete review of what the Bush 2003 tax program may look like and what it means for you. Tax-cut vs. deficits/supply side economics debate rears its head yet again. Should the government spur economic growth with cuts in marginal tax rates and generous business-tax incentives, or should the focus be on eliminating a deficit that puts upward pressure on interest rates? Nothing conclusive on either side. Now that he is part of the team, Treasury secretary Snow changes tune. With Republicans in control of Congress, Bush and his team will have little trouble muscling their program past outgunned Democratic liberals and a few lonely GOP deficit hawks.Full report from the front here.
Suggestions for year-end actions that can ease your 2002 US income tax load include: Increase 401(k) contributions to new, higher limits; try to postpone paying health insurance premiums until 2003 if your are self-employed, when they become 100% deductible. Also, take advantage of higher gift-tax (an excise tax) exclusion of $11,000 - up from $10,000.More on this story here.
GERMAN TAX, ECONOMIC CRISIS
BERLIN: Latest proposal from Chancellor Schröder envisions 25 percent flat tax rate on interest income, and also disclosed details of a tax amnesty for tax evaders to encourage the repatriation of undeclared savings abroad. Citizens who get their illegal money back to Germany from tax havens such as Switzerland and Liechtenstein before the end of 2003 will be charged a tax rate of 25 percent. Those who get their undeclared money back to Germany by June 30, 2004, will be taxed at a rate of 35 percent. Reintroduction of wealth tax shelved. Conservative opposition parties signaled their support for the measure over the weekend.More on this story here.
Swiss banks play down impact of German tax amnesty (see story immediately above). Even if German government estimate of repatriation of 100 billion Euros comes to pass, which many doubt, banks claim that much of the money repatriated would likely wind up in Swiss bank branches in Germany anyway.More on this story here.
The leaders of some of Germany’s biggest companies believe their country faces its worst crisis since the war amid deep scepticism about the ability of the government to solve Germany’s problems. Fears that rises in taxation and non-wage labour costs imposed by Mr Schröder since his re-election in September will stifle already weak growth. Constant changes in tax policy, inability to tackle long-standing structural problems such as a rule-bound labour market, overstretched pensions scheme, and a healthcare system nearing financial collapse anger business chiefs.More on this story here.
LUXEMBOURG RULING COSTS U.K. TAX INCOME
Landmark ruling by the European Court of Justice could end up costing the UK government in excess of £1 billion, ruling that certain EU member states were wrong to try to close a loophole which allows multinational companies to shift their debt around solely for tax purposes. The ruling addresses the mechanism by which multinational companies can arbitrarily assign debt to subsidiaries in some countries. Profits generated by these subsidiaries can be channeled back to the parent in the form of interest payments against the debt, rather than as profit. [Note: This is just one of many ways multijurisdictional companies can shift profits among tax jurisdictions, as discussed here.]More on this story here.
EUROPEAN UNION POSTPONES TAX DEAL
BRUSSELS: The European Union will miss its self-imposed January 1 deadline for reaching an agreement over the Savings Tax Directive. Opinion was divided as to how close the European bloc is to agreeing upon a viable solution. Further discussion postponed until January 21.More on this story here.
ISRAELI TAX COLLECTORS WANT BACK TAX POWER
TEL AVIV: In order to prevent people from selling real estate without paying a special improvement tax, and to stop others from incorporating in Singapore, Israeli Income Tax Commissioner’s Tax Authority is asking the Knesset to enact legislation that will widen the tax net, and to make the new legislation retroactive in case recent transactions would otherwise escape. New rules requiring banks to report the names of anyone conducting a securities transaction via the bank will result in 200,000 new taxpayers. Another law, slated to take effect January 1, 2003, requires Israelis with financial activity abroad to file annual reports regarding their foreign income.More on this story here and here.
SURVEILLANCE FOR ALL
Village Voice columnist says we will all soon be under surveillance. Without any official public notice or congressional hearings, the Bush administration — with an initial appropriation of $200 million — is constructing the Total Information Awareness System. It will extensively mine government and commercial data banks, enabling the FBI, the CIA, and other intelligence agencies to collect information that will allow the government — as noted on ABC-TV’s November 14 Nightline — “to essentially reconstruct the movements of citizens”. This will be done without warrants from courts, thereby making individual privacy de facto obsolete. Georgetown University law professor Jonathan Turley pointed out in the November 17 Los Angeles Times: “For more than 200 years, our liberties have been protected primarily by practical barriers rather than constitutional barriers to government abuse. Because of the sheer size of the nation and its population, the government could not practically abuse a great number of citizens at any given time. In the last decade, however, these practical barriers have fallen to technology.” In George Orwell’s 1984, “the telescreen [in everyone’s home] received and transmitted simultaneously”, so that the viewer could be seen and heard by Big Brother. Now under development are advanced forms of interactive television that will also make this prophecy real.
So far hands-on administrator Donald Rumsfeld has gotten a pass from the press in that he escapes mention as the Bush cabinet member who approved the hiring of John Poindexter to head the initiative. Poindexter “was the master architect behind the Iran-Contra scandal, the criminal conspiracy to sell arms to a terrorist nation, Iran, in order to surreptitiously fund an unlawful clandestine project in Nicaragua.” Queried about Poindexter’s Iran-Contra history, President Bush said, “Admiral Poindexter has served our nation very well.” Democrat Russell Feingold of Wisconsin — the only member of the Senate to vote against the USA Patriot Act — urges that the administration “immediately suspend the Total Information Awareness program ... until Congress has conducted a thorough review”, and cut off the funding until then. But why even consider continuing the funding at any point?More on this story here.
THE F.B.I.- DON’T MAKE IT THE SECRET POLICE
WASHINGTON: Former Virginia governor warns in a report by his federal terrorism commission that the government must guard against transforming the FBI into “a kind of secret police” focused only on preventing attacks. The commission recommends that the government dedicate the FBI to law enforcement, and create an independent intelligence fusion agency, staffed by intelligence analysts transferred from the FBI, CIA and other agencies, that would coordinate information about potential attacks and report to the president. An additional recommendation is that the military be used to fight terrorism in the United States only in support of civilian authorities. “Protecting democracy and individual liberties is paramount to achieving ultimate victory. Coming through this crisis without diminishing our freedoms or our core values of individual liberty is the entire game. If we pursue more security at the cost of what makes us Americans, the enemy will have won.”More on this story here. (Nonintrusive registration required.)
Cato Institute report: “Building Leverage in the Long War: Ensuring Intelligence Community Creativity in the Fight against Terrorism”. The goal should be to minimize the frequency and scale of future battles against terrorism before their onset rather than merely to enable the intelligence community to support policy and military operations once crises are in full swing — a reactive task it already does well. An agile intelligence community will require that the intelligence community at last dispense with the internal barriers that stifle communications and collaboration.Full report summary here.
CATO INSTITUTE: HISPANICS WOULD DISPROPORTIONATELY BENEFIT FROM SOCIAL SECURITY CHOICE
Harvard economist Martin Feldstein calculates that the privatization of U.S. Social Security would permanently increase GDP in the United States by 5%, which translates into an increase of about $5,000 per year for a family of four. Hispanics as a group have the most to gain from reform and much to lose from the lack of fundamental reform, because they get a raw deal from Social Security today.Full story here.
VIENNA: Austria is unlikely to agree to a European Union savings tax compromise next month until the EU extends controversial quotas on trans-Alpine trucking. Austria and Luxembourg have said they would only back tax deal if Switzerland and five other non-EU finance centers also eased their banking secrecy.More on this story here.
Liechtenstein again states backing for Swiss banking secrecy. Country’s ambassador to the European Union warns that a “common fiscal policy” is unlikely to be agreed upon in the near future.More on this story here.
SWISS PRIVATE BANKS FEAR GERMAN TAX AMNESTY
BERLIN: In contrast to the brave sentiments voiced previously, with a possible 100 billion euros ($100 billion +) flowing back to Germany, Swiss banks are nervous. One Swiss private bank estimates that estimated that 10-15% of its customers might take advantage of the German amnesty. Bigger worry still is that other countries may follow the idea. German amnesty may not prove as successful as the Italian one, which saw EUR 60 billion return to the country, because Italy was much more lenient in the tax rate it imposed on repatriated funds — just 2.5%, compared with Germany’s 25%.More on this story here.
Italy may extend tax amnesty to companies. Italian tax authorities are prepared to forgive funds siphoned out of the country via offshore firms, and to assets removed from the country as a result of illegal accounting practices, in return for a 20% flat tax on all repatriated funds.More on this story here.
BRITISH INVESTMENT BANKS ACCUSED OF TAX DODGING
LONDON: After a disastrous year for mergers and acquisitions and sharp falls in world stock markets, investment banks are keener than ever on creative ways to pay bonuses, using complex employee benefit trusts, often based offshore. The schemes are a perfectly legal, but to some they are an outrage. City could be saving as much as £100m a year in National Insurance contributions alone. No one should underestimate the creativity of accountants!Full story here.
OTHER OFFSHORE TAX AND BANKING NEWS
One in five of the Republic’s top earners pay no tax at all, and the vast majority of the country’s high net worth earners make use of “schemes”, shelters and partnerships to reduce their liability considerably. [No surprise there!]Rest of story here.
Following the revelation that Enron managed to avoid paying some $93 million in Canadian taxes last year, experts are suggesting that Revenue Canada is not equal to the challenge presented by the tax shelter arrangements which are springing up. Companies gamble, often successfully, that auditors will fail to spot shelters, says Canadian Tax Foundation associate.More on this story here.
Royal Bank of Scotland, the UK’s second largest bank, was fined £750,000 by the financial regulator for “inadequate” anti-money laundering controls. The bank failed to obtain or keep documentation to establish customer identity in an “unacceptable” number of new accounts opened in early 2002. The fine is being seen as a warning shot to the entire banking industry. There was no evidence of actual money laundering having taken place.More on this story here.
MACAO, A GROWING GLOBAL PLAYER
BEIJING: China’s other special administrative region expands. Chief Executive Edmund Ho Hau Wah has said that the city of 440,000 should open its door wider and catch up the pace of the current times. Tourism, much of it from the mainland, a growth industry.Rest of report here.
DOLLAR WEAK VS. EUROPEAN CURRENCIES. GOLD PRICE HITS 5+ YEAR HIGH.
Dollar falls to 3 year low against Euro, 4 year lows against Swiss franc, partly on fears that new Treasury Secretary might tone down the government’s defense of strong dollar. Gold rose to a 5 1/2 year high against the dollar of $342/once, vs. $280/ounce in August 2001.More on this story here, here, and here.
U.S. OFFSHORE TAX POLICES TO CHANGE?
WASHINGTON: Assistant Treasury Secretary Pam Olson describes tax policy alternatives. “Viewed from the vantage point of an increasingly global marketplace, our tax rules appear outmoded, at best, and punitive of U.S. economic interests, at worst.” Can no longer set policy without regard to what the rest of the world is doing.Full speach here.
OECD: Canadian economy continued to lead its G-7 counterparts in terms of annual growth in the third quarter, at 4% annualized. Overall, OECD countries reported third-quarter annual growth of 2.3%.More on this story here.
Hedge funds face new rules, reporting requirements. After years of secrecy, these high-risk investment vehicles are now subject heightened — if still mild — government oversight, like who they are and where they can be found. USA Patriot Act catalyst for the change. A prelude to still greater scrutiny? Probably not, say industry observers. Industry statistics sketchy, at best.More on this story here.
How to buy offshore bonds while reducing risk. Higher interest rates and possible declines in the dollar are upsides. How about Icelandic bonds, AAA-rated, yielding 7.7% ?More on this story here.
FINANCIAL NEWS AND ADVICE
Even as federal estate tax is phased out, state taxes are going up. Skyrocketing home values could trigger taxes. Florida, Alabama and Nevada have provisions in their state constitutions barring legislators from enacting separate state estate taxes.More on this story here.
Worried about being sued by your butler? A special insurance coverage rider is available for customers who have up to five residential staff members, who work 15 hours or more weekly. They may include butlers, chauffeurs, gardeners, personal assistants and security personnel. Even the wealthy are concerned about legal defense costs, which can equal or exceed a settlement.More on this story here.
BRITISH ATTORNEY CONVICTED IN NY COURT OF OFFSHORE FRAUD
Former partner of now-defunct London law firm was convicted, along with a Canadian lawyer, of assisting clients in violating securities, banking and tax laws, and using bogus corporations set up in offshore jurisdictions including Liberia, Belize and the Channel Islands.More on this story here.
MORE COUNTRIES LEGALIZE DUAL CITIZENSHIP
Dual nationality was once likened to bigamy. U.S. President Theodore Roosevelt called it a self-evident absurdity. Now, a revolution is occurring in citizenship law and policies. Spurred by increasing migration and a global economy, many nations now accept and even promote dual status. Since the 1960s, the U.S. Supreme Court has held that Americans taking citizenship abroad cannot be stripped of their U.S. nationality. The growth in dual nationality presents more opportunities than dangers, freeing individuals from irreconcilable choices and fostering connections that can further travel, trade, and peaceful relations. Marriage, rather than bigamy, is the better analogy.Complete article here.
U.S. passports & visas: Americans are required to have a passport when entering most foreign countries, and it is the preferred proof of citizenship when visiting Mexico and many Caribbean islands. Here is what the U.S. State Department says you need to do to get one.
COUNTRIES DEMAND “HIGH SECURITY” ID’S
Netherlands Caretaker Justice Minister proposes that anyone over 12 must carry an ID at all times. Someone suspected of not carrying ID could be fined EUR 2,250 or sentenced to two months jail if they refuse to produce identification. An obligation to carry ID already applies in most European countries, except in Britain where it remains taboo over fears of privacy violations.Rest of story here.
G8 countries want machine-readable passports with biometric features, but biometric IDs can easily be faked. A series of tests was run on different security devices. Conclusion: “Even though manufacturers of biometric products can scarcely avoid for marketing reasons extolling their applications as mature and secure: The technology suitable for mass consumption for identifying and authenticating the identity of persons on the basis of their physical features is obviously still in its infancy.” Testers were able, using comparatively simple means, to outwit all the systems tested. Don’t forget your passwords just yet.Background story here (repeated from last week). Complete study results here.
GOVERNMENTS WANT YOUR INTERNET RECORDS
Canadian privacy advocacy organization Privaterra criticizes Canadian cybercrime proposal.Rest of editorial/discussion here.
Numerous UK government agencies are already requesting communications data from ISPs, even though the relevant parts from two laws designed to regulate the practice have yet to come into force. A typical routine is for police to request an ISP to keep a particular piece of data that would otherwise be deleted after a couple of days. “They say, ‘We’ll go and get the paperwork -- can you keep it for us?’”, says Internet analyst.More on this story here.
US Congress wants to break into home PCs. The House Judiciary Committee has recently passed pending legislation that potentially would make millions of Americans using PCs in the privacy of their own homes instant criminals. The “Combating Illegal Gambling Reform and Modernization Act” would give the U.S. Attorney General the power to require financial institutions to refuse transactions for online gaming, and would make it illegal for banks and individuals to knowingly accept credit cards, checks or electronic fund transfer as payment for Internet gambling.Editorial here.
TECH’S ANSWER TO BIG BROTHER
The Total Information Awareness database is an unsurprising result of having so much information about our lives archived on the computers of our credit card companies, our banks, our health insurance companies and government agencies. If our personal information, some of it extraordinarily sensitive, is archived in corporate or government databases and protected only by the weak shield of the law, it is vulnerable to federal snoops. Technology offers a better way to preserve our rights against government overreaching. Several basic ideas surveyed.Complete article here.
U.S. BILL OF RIGHTS 211 YEARS OLD
But is it a happy anniversary? Will it last another 100 years? Fourth Amendment protections against unreasonable search and seizure and Fifth Amendment right to due process of law under attack in recent legislation. “People don’t see this in their daily lives yet because it’s still in the implementation stages. It seems like a costless measure because the assumption is that these measures will be used only against terrorists ... but when you give unlimited authority to government in these areas, that’s the basis of creating a police state”, says CEO of libertarian think tank The Independent Institute. Is there a Jefferson or Madison out there who will step into the fray today?Discussion here.
PEOPLE TAKE TO THE STREET IN ARGENTINA, SWAZILAND, VENEZUELA
Argentina on edge as it awaits massive protest.More on this story here. (Somewhat intrusive registration required.)
More than 1,000 protesters have gathered in Mbabane, the capital of Swaziland, to demand a return to the rule of law. The two-day strike has been called by trade unions in protest at government interference in the judicial system.More on this story here.
Opposition demonstrators marched through Caracas, Venezuelan, to demand early elections or President Hugo Chavez’s resignation.More on this story here. (Somewhat intrusive registration required.)
STREAMLINED US BILL OF RIGHTS (SATIRE)
From The Onion: President Bush approved a streamlined version of the Bill of Rights that pares its 10 original amendments down to a “tight, no-nonsense” six. Fourth and Nineth Amendments eliminated. “Quite honestly, I could never get my head around what the Ninth Amendment meant anyway,” said outgoing House Majority Leader Dick Armey. “We’re not taking away personal rights; we’re increasing personal security,” says Attorney General Ashcroft.
According to Senator Larry Craig (R-ID), the original Bill of Rights, though well-intentioned, was “seriously outdated”. “The United States is a different place than it was back in 1791. As visionary as they were, the framers of the Constitution never could have foreseen, for example, that our government would one day need to jail someone indefinitely without judicial review. There was no such thing as suspicious Middle Eastern immigrants back then.”
“Any machine, no matter how well-built, periodically needs a tune-up to keep it in good working order,” President Bush said. “Now that we have the bugs worked out of the ol’ Constitution, she’ll be purring like a kitten when Congress reconvenes in January — just in time to work on a new round of counterterrorism legislation.”Full “story” here.
ANTIGUA IN ANTI-O.E.C.D. WORDS AND DEEDS
LONDON: High Commissioner to London Sanders protests to the OECD that the promised “level playing field” is rapidly disappearing. Certain OECD member states have been given until 2011 to implement information exchange procedures on tax matters - seven years more than the period granted to non-members.More on this story here.
Antigua removed 3% IBC tax with respect to offshore banks and interactive gaming institutions. After putting on the tax to get off the FATF black list, many of the affected institutions fled to Costa Rica and other countries that did not pass similar laws. Some companies have indicated that they will now return to Antigua.More on this story here.
EX-P.M. SAYS BAHAMAS STILL UNDER SCRUTINY
NASSAU: Defeated PM Ingraham warned that despite being in compliance with the FATF’s anti- money laundering recommendations, the jurisdiction is likely to face continued scrutiny. Although The Bahamas is in compliance with all 40 of the FATF recommendations relating to international counter-money laundering activities, he argued that two issues remain largely unresolved: The requirement for intermediaries, such as lawyers and accountants, to divulge the names of the beneficial owner of funds held on account, and to engage in ongoing anti-money laundering training activities.More on this story here and here.
CHANNEL ISLANDS, ISLE OF MAN NEWS
DOUGLAS: In light of recent failure of EU to reach an agreement on Savings Tax Directive proposals, UK invites IoM to review its earlier commitments. Statement from Treasury Minister says that “[T]he Isle of Man has expressed a willingness to enter into a bilateral taxation agreement with an EU member which requests one. Naturally the Isle of Man will be looking for some economic benefit to accrue from such negotiations.”More on this story here.
Bank deposits in GUERNSEY drop 3.3% between June and September. Multiple theories offered.More on this story here.
The UK’s Serious Fraud Office raided premises in London and Jersey in connection with allegations of theft from a UK-listed cash shell, Izodia, an e-commerce company which raised cash for a failed dot-com venture.More on this story here.
GIBRALTAR PUSHED AROUND BY LONDON, O.E.C.D.
The Rock appears to have been left out of the loop by the European Commission regarding issues related to its tax regime. It wa not notified of EU proceedings against the UK over the lack of information available on Special taxes and VAT in Gibraltar. Opposition accuses ruling party of plans to sell out inland’s sovereignty to Spain.More on this story here and here.
GERMAN FINANCE MINISTER SAYS AMNESTY NOT AN AMNESTY
BERLIN: Finance Minister said the proposed plan to impose a 25% tax for those who declare secret funds kept abroad, should not be construed as an amnesty for those who return the money back to Germany. “The concept of amnesty is wrong. This is not the issue. The premise in order to be freed from penalty is the voluntary declaration. What we are doing is that we say, if the capital is brought back, then 25% must be turned over. This is the new element here.”More on this story here.
OFFSHORE SCAM ARTIST SENTENCED
A man who posed as an international investor was sentenced to federal prison after pleading guilty to swindling an elderly couple out of their retirement savings. The defendant has been charged with more than two dozen financial crimes over the past 25 years and has been sent to state prison four times.More on this story here and here.
TAX CASES IN THE NEWS
A Chicago federal court enjoined Michael D. Richmond from selling fraudulent trust plans used to evade federal income taxes, and told him to post the court’s order on the Internet. The court also ordered Richmond to turn his customer list over to the Justice Department, and permanently banned him from preparing federal income tax returns. The order also applies to affiliated organizations Richmond has used to promote the trust schemes: The Liberty Network, Liberty Estate Planning, The Liberty Institute, Fiduciary Management Group, The National Council of Certified Estate Planners, Association for Certified Estate Planning Attorneys and Eagle Publications Trust.Rest of press release here.
Tampa US judge blocks alleged tax evasion scheme. A federal judge is expected to impose a preliminary injunction blocking two Sarasota area men from promoting a program that claims most Americans do not have to pay income taxes. Tax Informer Enterprises and other related entities say federal tax codes exempt American citizens who work for American companies. “Individual proponents of the tax-exempt theory can take their chances by not filing”, says judge. “It’s another matter to tour the country and take thousands of dollars persuading others to do so.”More on this story here.
WAR JITTERS BOOST GOLD PRICE; SOME SEE CONSPIRACY
Gold price briefly trades over $350/ounce -- highest since March 1997, on war fears and weak dollar. [Note: Trading in reaction to news is often not a good idea.] New Orleans-based Blanchard & Co. sues Barrick Gold & JP Morgan Chase, alleging conspiracy to suppress price for short-selling profits. Say gold would be at twice its current price if not for conspiritors’ actions. (Allegation is a milder version of some theories positing that central banks have colluded to suppress the gold price in order to disguise their inflationary policies.)More on this story here and here.
MITCHELL WARNS OF THREAT TO BERMUDA HEDGE FUNDS
HAMILTON, Bermuda: Heritage Foundation fellow, Dan Mitchell, warns that new US laws on hedge fund regulation could adversely affect the Bermuda’s burgeoning hedge fund industry. Adds that investing in hedge funds is viewed by many anti-offshore campaigners as merely another way to avoid taxes, and is likely to come under fire from legislators.More on this story here.
U.K. INLAND REVENUE FAILING ON TAX EVASION?
LONDON: According to the Inland Revenue’s annual report, the amount of additional tax collected via non-compliance probes in 2001-02 was £3.8 billion, compared with £4.5 billion the year before. Recent attempts to create a more dynamic and user-friendly service appear to be having an adverse impact on the amount of tax collected as a result of corporate and personal non-compliance investigations.More on this story here.
CANADIAN PRIVACY SCORECARD
TORONTO: How Canadians fared in the protection of personal information over 2002. Milestones that could change the way the debate is framed in 2003.More on this story here.
MANY US COMPANIES RELEASE CUSTOMER RECORDS ON REQUEST
Almost a quarter of the corporate security officers in a survey said they would supply information about customers to law enforcement officials and government agencies without a court order. If an investigation concerned national security, the figure jumps to 41%. The security officers who took part in the survey work in financial, retail, health care and many other fields. “Growing concerns about government encroachments on privacy and civil liberties have not taken into account the degree to which people hand over information willingly”, said a former federal prosecutor who now works for a computer security company.More on this story here.
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