Wealth International, Limited

Offshore News Digest for Week of January 20, 2003


According to a new study by two Massachusetts Institute of Technology graduate students, companies and individuals frequently sell or give away old computer disk drives with sensitive information still on them. The study found that 74% of the drives contained old data that could be recovered and read, while 17% contained fully installed, functional operating systems with user data that required no particular effort to recover. Another 36% had been freshly formatted but still contained old data that could be recovered. Among the sensitive information retrieved from the disk drives were detailed personal and corporate financial records, medical records, and love letters, as well as gigabytes worth of personal e-mail and pornography.

Casual PC users often assume that such features permanently delete the data stored in a file from the computer’s disk drive. Instead, most operating systems simply change the data to indicate that the file has been deleted, then mark the areas of the hard disk that contain the “deleted” data as being available for reuse by other programs. Assuming that data is not overwritten by another program, it remains undisturbed and can be retrieved and read using a variety of techniques ranging from simple Unix commands to free and commercial forensic software tools.

More on this story here.


The call from an MI6 controller in London to his top agent on the small island was electrifying: “Destroy everything that connects you to us!” Trouble was that the agent was a prosecution witness in a fraud trial, and intelligence agency protocol and court procedure are not the same.

More on this story here and here.

Five Cayman Cabinet ministers demanded that the attorney general resign over the failed Eurobank money-laundering case in which a lead investigator destroyed evidence - apparently at the request of a British intelligence agency. The scandal threatens relations between Britain and its Caribbean territory and raises questions about the anti-money laundering fight on the island, which is the world’s fifth largest financial sector.

Chief Justice Anthony Smellie ordered a jury to find five Eurobank Corp. managers innocent of money laundering after chief investigator Brian Gibbs admitted shredding evidence. Smellie’s judgment said the territory’s British-appointed governor, its attorney general and the police chief were aware that Gibbs had had a relationship with the British agency since the early 1990s

More on this story here.

Elected Members of Executive Coucil asked the Governor to revoke the appointments of key officials in the Euro Bank debacle: Director of the Financial Reporting Unit (FRU) Mr. Brian Gibbs and Attorney General Mr. David Ballantyne. In a ruling delivered prior to the end of the Euro Bank money laundering trial, the Chief Justice said Mr. Gibbs told lies, deliberately failed to disclose and knowingly destroyed evidence which he was aware was highly relevant to the Euro Bank trial on the instructions of his controlling agent of the UK Government.

“At the very least, a grossly negligent approach by the prosecution to its duty of disclosure to the Defendants and to the Court has occurred.”

More on this story here.


The Greek EU Presidency has formulated a new plan which it hopes will secure the cooperation of Luxembourg, Austria and Belgium over the EU’s Savings Tax Directive. The three countries will be told that they are free to levy a withholding tax of up to 35%, moving to automatic information exchange on the savings interest of non-resident account holders only if non-EU members such as the United States and Switzerland agree to do so.

More on this story here.

Watered-down EU proposal may solve savings tax row. The original deal, 10 years in the making and requiring EU unanimity, embarrassingly fell through last month, mainly due to resistance from Luxembourg and Austria. “At this moment the EU cannot agree on a system of automatic exchange of information for all 15 members,” a diplomat said. “It is better to act realistically than insist on this point.”

More on this story here.

“Ugly return of the unwanted savings tax”. According to Scotland on Sunday, the implications of even a watered-down deal for the UK as a global financial center and for the fiscal sovereignty of the UK are “formidable”. The savings tax has been driven by an imperative that is as corrosive of human rights as it is anti-competitive: the determination of high tax jurisdictions in the EU to bully the low tax ones out of existence.

The most worrying aspect of this proposal is it opens up the right of an unelected EU official to impose new taxes and levies in Britain without an obligation to have these agreed or approved by British voters. And once a withholding tax had been conceded, what else might follow?

More on this story here.

The European Union’s announcement on the next round of meetings here.


NASSAU: Speaking at the Business Outlook 2003 seminar last week, Prime Minister Perry Christie signaled his awareness of the excessively bureaucratic nature of the jurisdiction’s investment regime, and pledged changes over the coming year. This would release the “hundreds of millions of investment dollars” allegedly waiting to pour into the Bahamian economy.

More on this story here.


Most American snowbirds opt for properties in Florida, California or Arizona, but anyone willing to branch out and buy a winter home outside the U.S. may find terrific value. Beware of hidden costs. Real estate tax laws vary wildly from country to country and city to city. Although annual property taxes usually range from 2% to 5% of the property’s value, they can go as high as 19%.

More on this story here.


There will always be a need for low taxes and privacy.

More on this story here. (Subscribers only.)


MADRID: Latin Americans get preference in Spanish citizenship.

More on this story here. (Somewhat intrusive registration required.)


SEATTLE: Hurt feelings have reached epidemic proportions on both sides of the border. Canadians, who could once cross into the United States with only a driver’s license, now find that even their passports have lost credibility. Americans, meanwhile, wonder why Canadians will not appreciate the seriousness of the terrorist threat and close ranks. The objective of the U.S. Customs Service is not to harass natives of certain countries. It is to weed out terrorists who hide among their blameless brethren.

More on this story here.


The IRS committed fraud by brokering secret deals with two airline pilots to let them escape taxes in return for testifying against 1,300 other pilots who bought into the same tax shelters, a federal appeals court ruled Friday. The remedy for this “extreme misconduct” by the IRS was to give all of the pilots the same corrupt deal that one of the pilots got. The ruling will require the IRS to pay tens of millions of dollars in tax refunds, interest and legal fees, said a tax lawyer who represented some of the pilots.

More on this story here.


“There is no law that compels me to file a tax return. I have a choice, as every American has a choice,” says Lynn Meredith, who has marketed her beliefs to other Americans in two books, notably Vultures In Eagle’s Clothing, and hundreds of seminars. She says any assets you do have can be safely protected in a “pure trust”. That is not how the IRS sees it, as indicated by an indictment that calls the trusts “bogus”, Meredith’s advice “misleading”, and the tax returns filled out using her organization’s advice “fraudulent”.

More on this story here.


The gist of the 25-page racketeering and fraud complaint: KPMG and First Union National Bank induced him into sinking $30 million into illegal, unregistered tax shelters that since have become the focus of an IRS fraud crackdown. KPMG is also accused of malpractice. Why did the accountants and bankers allegedly do that? Big fees.

More on this story here.


TORONTO: If you are thinking of becoming a customer of Royal Bank of Canada, be prepared to have your name cross-checked against a massive database of money launderers, criminals and other suspicious individuals. Canada’s largest bank has quietly invested in a private U.S. database firm created last year to conduct in-depth background checks on new and existing financial clients. It is all part of a sector-wide effort to crack down on fraud and comply with post-9/11 anti-terrorism regulations, such as the U.S.A. Patriot Act.

More on this story here.


Puerto Rico’s largest bank, Banco Popular, will pay $21.6 million but avoid criminal prosecution for allegedly allowing millions in drug money to be laundered by failing to report suspicious activity to the government. Deposits to accounts in Banco Popular often came in paper bags or gym bags stuffed with small bills, the Justice Department and other federal agencies said.

The action drew criticism from Charles Intriago, publisher of Money Laundering Alert, a Miami newsletter, who said Washington regulators appear to crack down hardest on financial institutions that serve or are based in Latin America while taking little action against Wall Street institutions where money laundering is discovered. “This case shows the uneven standards the U.S. follows on prosecutions. If you’re a large U.S. institution, preferably on Wall Street, it doesn’t matter what you do,” he said.

More on this story here.


Banco Bilbao Vizcaya Argentaria, Spain’s second largest bank, admitted to the country’s leading investigative magistrate that it paid a top Mexican banker from unconsolidated funds obtained through accounts held in Lichtenstein, Switzerland and Jersey. This revelation adds fuel to the fire as BBVA is already under investigation in a judicial inquiry into its alleged use of slush funds to expand in Latin America.

More on this story here.


Victims of the biggest banking fraud ever are putting UK regulators in the dock - and demanding security service documents. The Bank of England faces a giant lawsuit brought in London by BCCI’s victims, who claim it is guilty of negligence amounting to “misfeasance”, or wilful misconduct. It was the financial regulator in 1991 when the BCCI crashed with £7 billion of undeclared debts, and has long been accused of turning a blind eye to fraud at the Middle Eastern bank.

BCCI’s creditors are claiming up to £1bn in damages, and are also breaking new ground by challenging the Bank’s statutory immunity against being sued. The Government will have to answer potentially embarrassing questions over what Ministers, civil servants and the regulator knew about BCCI before it crashed. The Bank’s most senior officials, past and present, are expected to go into the witness box, and the High Court will also consider evidence from John Major, the former Prime Minister, as well as former Chancellors Norman Lamont, Nigel Lawson and Denis Healey.

Then there is the small matter of the role played by Britain’s intelligence services, whose relationship with BCCI has long been questioned. Did MI6 use accounts at the secretive bank to pay sources and operatives around the world? Did BCCI channel Western funds to Mujahideen fighters in the Eighties - or even, as some conspiracy theorists have surmised, to Osama bin Laden?

More on this story here.


Offshore “shell” companies are stock corporations where a nominee lawyer in a tax haven country holds perhaps 1% of the stock and the other 99% remains anonymous. Such ask-no-questions setups are available in many Caribbean tax havens can be a cover for criminal operations, including the Bank of Credit & Commerce International (BCCI). Investors beware.

More on this story here.


On December 17, 1997, representatives of 34 states signed a new Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Signatories include all 29 member states of the OECD as well as five non-members. According to the Preamble to the Convention, the goal of the agreement is to combat the “widespread phenomenon” of bribery in international business transactions. As the Preamble puts it, bribery “raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions.” Some critics think the Convention has glaring loopholes.

More on this story here.


President Bush renewed his call for Congress to impose the first federal restrictions on malpractice cases, saying that a “broken” medical liability system is driving away doctors and straining the cost and availability of health care. He proposed limiting the amount that patients can be compensated if they are injured by doctors, hospitals or insurers to $250,000 in non-economic damages, with an unspecified cap on punitive awards. The administration is not proposing to limit compensation for the direct costs of care or lost income as a result of such harm. The issue polarizes two of the nation’s largest and best-funded lobbies - physicians, with whom the White House has aligned, and trial lawyers, whom Bush repeatedly has demonized.

More on this story here.


This is around US$16.8 billion higher than the US$50 billion the Central Bank of China Governor estimated last March. Taiwan companies remit capital into the mainland via various kinds of channels and a great part of them did not register with the government.

More on this story here.


As communications have improved, more and more governments are supportive of efforts to provide outsourcing because of the income it generates for their countries. And it truly looks like outsourcing might become a great leveler of nations, raising the standards in most and perhaps lowering it a little in others. Distance, political systems and language have largely ceased to matter. In Asia governments are saying that their IT professionals are paid less than equivalent people in the USA; India says 50% to 70% less, and Vietnam even less again. The story is similar in Eastern Europe, Central America, Africa and the Middle East. Even Canada claims a 50% cost advantage over the U.S.

The range of outsourcing services in these various places runs through data-entry, call-centre operations, software design, software coding, testing, integration, day-to-day system management and so on. Some countries are still at the data-entry stage but various providers in other countries are quite advanced.

In Silicon Valley unemployment has risen from a low of 1.8% in September 2000 to almost 8% now. Businesses are feeling the impact of having less money in the area, stores are closing and about 25% of commercial property stands empty. Community-funded facilities such as schools are also hurting because there is less money available to them. Extend that situation across the whole range of jobs that are outsourced now, or have the potential to be outsourced, and the situation is not pretty. Some people will be without a job, and will rely on social security payments but the government will extract less tax because people are not working.

If you have a role that involves face-to-face contact with users, then your job may be safe for a while yet. Likewise, if you have specialised skills or work in areas such as national defence that cannot be outsourced then your job is relatively secure. For the rest of the IT industry, the lower levels are looking particularly vunerable and the nature of management roles is under threat. Anyone who is about to join or rejoin the IT profession, either through education or some kind of return to work scheme, think very carefully before you do so because low-level jobs are the usually the easiest to outsource.

More on this story here and here.


Similar to a line once uttered apropos the late and lamented British humour magazine Punch: There isn’t as much financial privacy in the U.S. as there used to be, and there never was.

Electronic Privacy Information Center has a page on the Gramm-Leach-Bliley Act, which provides [very] limited privacy protections against the sale of your private financial information and codifies protections against pretexting, the practice of obtaining personal information through false pretenses. The page contains an introductory synopsis on the subject and advice on what you can do to protect your privacy, and links to further news and resources.

Page here.

In June 2002, voters in North Dakota voted overwhelmingly, by a majority of three to one, for a referendum which would prohibit banks from sharing, selling or otherwise disclosing personal financial information without the customer’s explicit consent. In 2001, under pressure from industry lobbyists, North Dakota had repealed its “opt-in” privacy law for banking customers and adopted the industry-favored scheme of “opt-out” - that is, silence is consent. State Representative Jim Kasper and an army of citizen activists kept the financial privacy issue alive until it reached the voters, whereupon they rejected spurious arguments of financial doom from the banking industry as well as their own elected officials.

More on this story here.

State Senators Jackie Speier and Senator John Burton introduced the “California Financial Information Privacy Act” in December. This legislation would require financial companies to first receive a customer’s permission in writing before disclosing a consumer’s nonpublic personal information, including internally to affiliates of the companies and corporations. This bill also applies to retailers who use personal financial information, such as car dealers.

More on this story here.


Jersey, Guernsey and the Isle of Man, will participate fully in a new system of automatic exchange of banking information between countries. They will join a dozen EU countries also launching an information exchange scheme in a long-awaited move to tighten the net against individuals salting away cash abroad. Subject to a deal at talks in Brussels, the three other EU countries, Austria, Belgium and Luxembourg, will instead levy a withholding tax of 35% on foreign savings interest.

More on this story here.


Los Angeles lawyer Eric Witmeyer has pleaded guilty to his role in a tax-evasion conspiracy and will testify against his alleged partner in crime, who claims to be “the world’s leading authority on offshore banking and investing”. The plea bargain will probably put him in federal prison for up to a year, rather than the decades he might have faced had he been convicted of all the counts on which he was indicted last month.

The two men allegedly took steps to conceal U.S. investors’ ownership of offshore entities so they could avoid paying taxes on any money those entities made or on any money they earned here but hid there. Investors allegedly paid Schneider from $15,000 to $60,000 to buy interests in the offshore businesses, and then paid Witmeyer about $15,000 to “decontrol”, or mask their role.

More on this story here.


Andorra, Monaco and Liechtenstein, together with the UK’s offshore dependencies, will be obliged to go along with the EU Savings Tax Directive if the dam formed by Switzerland and the US gives way. Marc Forne, the prime minister of Andorra, says that the facilities they offer would simply be replaced by banking centers elsewhere in the world, so that the EU’s attempt to clamp down on its citizens’ tax avoidance (not a crime in Andorra) is futile. Together the geographically tiny territories hold perhaps around $1 trillion in bank deposits, rivalling Switzerland’s total.

More on this story here.


The Swiss Federal Banking Commission has imposed tougher regulations on financial institutions including increased surveillance of “higher-risk business relationships”. The commission said the new regulations were in line with the directives of the Financial Action Task Force.

The Malta Financial Intelligence Analysis Unit is preparing proposals to extend anti-money laundering regulations to the legal profession, estate agents, accountants and auditors and other sectors.

More on this story here and here.


The Caribbean Financial Action Task Force (CFATF) met last week in Barbados to formulate a position on a report put forward by its sister organisation, the FATF, which contains new criteria for a global assessment methodology designed to combat money laundering and terrorist financing.

More on this story here.


BRUSSELS: After intense pressure, Switzerland offered to tax all Swiss bank accounts held by EU savers and pass the revenue raised on to EU governments. Although that falls far short of the lifting of banking secrecy the union had demanded, ministers now accept it is the best deal on offer. A final agreement depends on Luxembourg, Austria and Belgium, which also have strict banking secrecy laws. They must agree to do the same as Switzerland, but Luxembourg and Austria object to the proposed level (up to 35% in 2009) of the tax. The EU is also trying to persuade the U.S., Liechtenstein, Monaco, Andorra and San Marino to adopt “equivalent measures”.

More on this story here, here, and here.


Charles Cain cogitates upon the issue of a company’s “residence”. In the United Kingdom, a company is resident for tax purposes where its central management and control is exercised. In the USA and France, the issue of management and control in the context of the tax residence of a company is not an issue. Rather, it is the place of incorporation, and the reality of carrying on business that are the determining matters. Thus, the fact that a Bermuda holding company is managed and controlled in the USA is irrelevant.

The US press and politicians responded to this development of the Bermuda reincorporations in an utterly illogical manner. The press raised the totally spurious argument of the morality of taxation, ignoring entirely that in western civilisation we live by the rule of law, and the rule of law permitted “inversion”. Not only that, but company law imposes a fiduciary duty on directors to manage their companies so as to minimise costs and maximise profitability. Failure to take advantage of the legal possibility of “inversion” could/should have resulted in litigation against such directors by their shareholders for breach of fiduciary duty. The US press, in this case, were not merely wrong. They were as wrong and improper as any terrorist, who regards the law as an inconvenience in the pursuit of their objective. The politicians’ response in Congress was just as absurd.

Bearer shares are a mechanism people use to effect the form, but not the reality - which is seen when the arrangement is examined closely, of the ceding of legal control over their financial affairs. Today, such legerdemain invites trouble. Interestingly, the obsession with secret arrangements can displace the idea that the legitimate use of corporate structures with full disclosure and compliance with tax reporting requirements can be a normal part of tax planning.

More on this story here.


MIAMI: Noted offshore asset protection attorney Denis Kleinfeld lays out the new IRS, its audit policy and what may lie ahead. Many, if not most, of the abuses and intrusive actions of the IRS are the natural consequences of the Byzantine complexity of the tax code itself. Between being burdened with a draconian tax law and a flawed reorganisation, clearly the IRS is an agency in trouble. Which means trouble for the taxpayers as well.

New IRS data makes it difficult for the politicians to claim that the rich are not paying their fair share of taxes. According to the latest released figures, the top 1% of taxpayers ranked by income now pay 37.4% of all federal income taxes. The bottom 50% pay just 3.9% of all federal income taxes. With the pressure to collect tax from such a small percentage of the people, the idea of a kinder and gentler IRS is no longer feasible.

More on this story here.


A federal appeals court has ruled the IRS committed fraud and acted deceptively after giving secret deals to two pilots in return for their testimony against 1,300 pilots who bought into the same tax shelters. The court overturned a previous ruling against the pilots who were found guilty of tax evasion and were ordered to pay more than $2 billion in penalties.

As part of the secret deal, pilot John Thompson escaped paying the taxes he owed and received a $60,000 refund through falsified tax returns prepared with help from the IRS. Thompson used the refund to pay his legal fees. He also collected $20,000 in interest. The second pilot also received a secret deal. IRS lawyers Kenneth McWade and William Sims, who prosecuted the case, never revealed to the tax court that the two pilots’ cases had been settled, much less revealed the settlement’s conditions. The court said the lawyers’ silence turned into misconduct when, during a trial, it became apparent that Thompson was going to testify about his settlement and McWade shifted his question to unrelated topics.

More on this story here.


The IRS says Randall Brian Jarvis promoted what appears to be a variation on a common tax-avoidance device: setting up trusts that, while appearing to separate control of the trust assets from the benefits of ownership, allow the taxpayer to retain control. The schemes also involved Limited Liability Companies (LLCs) and purported ministries.

More on this story here.


Following the IRS’s announcement last week that US citizens who have used offshore credit cards and bank accounts to conceal assets for the purposes of tax evasion can avoid criminal charges if they come forward before April 15, Washington and London law firm Moore & Bruce, LLP has produced a useful critique of the IRS’s proposal. Denying that the program amounts to an amnesty, Charles Bruce says that anyone wanting to take advantage of the offer will have to move quickly. His firm’s analysis of the IRS proposal follows.

More on this story here.

The IRS is offering to waive criminal prosecution and fraud penalties for taxpayers who used offshore accounts to shelter income illegally - in exchange for information on the promoters of the tax-evasion schemes.

More on this story here.


Over the last few months a veritable stream of members of Congress have attacked the IRS’s proposed rules requiring banks to report interest paid to non-resident aliens. Usually their objections have centered on the anti-competitive nature of the rules, which would severely harm the ability of US banks to compete in the global market for deposit business; but a significant minority of complainants have focused on the additional bureaucracy the rules would entail. [Note: One would also expect more objections to the fact that the IRS, an Executive branch agency, is clearly disregarding the intent of a law passed by the Legislative branch.]

More on this story here.


DUBLIN: The Revenue Commissioners allege that 70,000 (resident) individuals kept money in bogus non-resident accounts.

More on this story here.


Riggs Bank of Washington, DC is said to hold $300 - 500 million of Equatorial Guinea’s oil revenues, under the control of the nation’s “president for life”. If true, that fact would help explain why Equatorial Guinea’s oil money has not reached the ordinary people. The allegation that the president himself retains control over the account that is particularly damaging.

More on this story here.


LONDON: Traces of the sites you visit, the computers and phone lines you use, and the emails you send are available to any organisation with the mandate, the motivation and the resources to access them. There is little you can do to prevent this default surveillance. Fears over child pornography and terrorism have ended the ideal of a free and secure internet.

The breathtaking number of internet-related arrests in the past two years demonstrates this, and also that the global financial environment and the international integration of law enforcement agencies have evolved beyond recognition. Operation Ore is a case in point. Many of the thousands of suspected paedophiles targeted by detectives believed they were safe from scrutiny. Maybe they figured that by using a “secure encrypted” payment link, that they were somehow invisible. Or perhaps they foolishly thought that visiting an overseas website afforded immunity from action by UK police. This is an idea as erroneous as the myth that deleting something from your computer actually gets rid of it. Any electronic payment you make will be stored in at least a half a dozen major databases, each ultimately accessible to any law enforcement agency.

More on this story here.


Inland Revenue staff have breached the Data Protection Act by checking out the tax affairs of celebrities, it has emerged. More seriously, the Revenue said it believed there was some “evidence” that privileged tax information had been sold onto outside agencies by staff. Personal tax records may also have been used “maliciously” to shop ex-spouses to the Child Support Agency.

More on this story here.


The pursuit of a technological solution to the nation’s military challenges is nothing new for Vice Admiral John M. Poindexter - nor is the attending controversy. He is being vilified by civil liberties groups, Democrats in Congress and even some Republicans as the personification of a new type of Big Brother for his role as the force behind the Total Information Awareness project. But the roots of his new enterprise actually lie well in the past, in a vision he pioneered for building a Star Trek-style command and control system while working as the national security adviser for President Ronald Reagan two decades ago.

An interesting background and catchup piece.

More on this story here.


Wile overseas incidents make headlines and governments in the U.S. and Britain issue frequent terrorism alerts, the actual rate of terrorist assaults has not grown since September 11. What has changed is the quality - not the quantity - of attacks. Now that traditional favorites such as embassies and military installations are locked down tighter than ever, Al Qaeda operatives are turning their attention to “soft” targets, such as restaurants, retailers, and resorts. Regardless of who is behind recent assaults, the real risk of being killed or injured by terrorists remains tiny.

Despite thousands of trips abroad by Americans last year, just 19 were killed by terrorists - not a significantly higher figure than in recent years. Exotic diseases and street crime remain a far greater threat to Americans traveling overseas than terrorism. Says McIndoe: “You’re more likely to be struck by lightning” than to be killed in a terrorist attack, says the CEO of iJet Travel Intelligence, a consulting firm that assesses travel risks.

More on this story here.


Almost everything the citizenry does happens under the government’s watchful eyes. Such measures might provoke an uproar in other Western countries, but most Finns look Big Brother in the eye and merely shrug. “Yeah, I guess it’s a lot, now that you mention it,” said a yound Helsinki resident. “But it keeps crime down, so we don’t mind.”

One reason Finns appear not to be bothered may be that they trust their state not to abuse the information being collected. Admiration for public servants runs deep in Finland, where polls show the police are trusted more than any other institution. “Suspicion as to the goals of the government and public authorities is very low. I have a feeling people in North America would be more paranoid, and maybe with good reason,” said Kauko Aromaa, head of the Helsinki-based European Institute for Crime Prevention and Control.

More on this story here.

The New Enforcement and Preliminary Act also known as “HE 52/2002” is taking Finland closer to East Germany and Soviet Union times, than ever. Only in Nazi Germany did officials have as strong privileges to interfere with a citizen’s privacy.

More on this story here.


The year following September 11 has seen probably the most staggering proliferation of “conspiracy theories” in American history. Angry speculation - focused mainly on government dirty dealings, ulterior motives, and potential complicity in the attacks - has risen to a clamor that easily rivals what followed the Kennedy assassination. Some of these suppositions are patent balderdash. But many others are coherent and well argued, and cite disconcerting reports from the U.S. corporate media and respected overseas news desks to support their claims.

“Following are the ten most alarming theories about September 11, the ‘war on terror’, and the future of the world. Feel free to accept them as gospel, study them as symptoms of a traumatized culture, or scoff at them as anti-American propaganda: I’m only the messenger. Personally, though, at this point the only person I hold above suspicion in the matter of September 11 is that poor kid with the goat.”

More on this story here.


Gambling has long since crept out of casinos and into such mainstream venues as convenience stores. A profusion of online options now drives it deeper - into workplaces and homes.

More on this story here.


He is seeking your assistance in acquiring oil funds that are presently trapped in the Republic of Iraq.

More on this story here.


Palladium will eliminate many “weak links”, so we are promised.

More on this story here.

Microsoft has spent almost $200 million securing Windows Server 2003.

More on this story here.


After more than a decade of debate, on Tuesday the EU Finance Ministers cobbled together a face-saving deal (text here) that: 1.) Requires only 12 of 15 EU member states to implement automatic tax information exchange (among themselves) on interest paid to nonresident account holders on bank deposits and debt securities and 2.) Exempts Austria, Belgium, and Luxembourg from this system, unless non-members such as Switzerland (and the US) agree to do the same. Instead these three will levy a stepped withholding tax on nonresident savings, from 15% in 2004 to 35% by 2010.

Summary of the deal can be found here.

The watered down deal on taxing cross-border savings left loopholes for high rolling investors. Donald Johnston, secretary general of the OECD, said Europe had endangered a global drive to crack down on tax havens, by allowing three member states - Austria, Luxembourg and Belgium - to keep their banking industries shrouded in secrecy.

The Isle of Man’s top tax official told the Guardian that offshore centres would be poring over the details to ensure they recieved equal treatment. “It is difficult to see how any government could say that a withholding tax of 15-20% is equivalent to automatic exchange of information,” said Ian Kelly, the island’s income tax assessor. “The same deal should be offered for the crown dependencies.”

More on this story here.

Berne yesterday welcomed the agreement, which will allow the country to retain its banking secrecy in exchange for levying a withholding tax on EU residents’ savings. Swiss bankers were generally relieved by the outcome. One analyst said it was “probably the best result that the Swiss banks could realistically hope to achieve”. Privately, bankers there said there were plenty of ways to get round any withholding tax, including booking businesses through offshore centers where there was no such tax. Since any tax would only apply to interest payments, customers could also be offered more capital gains-orientated products.

Finance minister, Kaspar Villiger, said Switzerland wanted guarantees that it would not become a target of the OECD, which is cracking down on tax havens. Any agreement with the EU had to recognise that Switzerland was not a “tax haven”, and would not therefore be subject to censure. “Administrative assistance linked to tax evasion continues to be out the question,” the ministry said in a statement, adding that an exchange of information would only be permitted in cases of tax fraud.

Swiss private banks have already given the government notice that they will force a referendum on closer EU ties if Bern gives away too much. Bankers fear that the Swiss government’s ongoing negotiations with the EU over a series of bilateral accords will eventually lead Bern to accede to Brussels’ demands on tax in order to secure other crucial agreements.

More on this story here, here, and here.

Jubilant Luxembourg seals savings tax deal with a kiss. The tiny Grand Duchy - population: 440,000; power of veto: the same as the other 14 countries - was the hardest nut to crack. With some 40% of its GDP derived from financial services, there was little the other governments could offer to win their approval on savings taxation.

More on this story here.

Crackdown on tax cheats could backfire on EU. The agreement is likely to encourage some wealthy Europeans to park their money in tax havens in Asia and elsewhere outside the Union, tax lawyers and bankers said Wednesday. There is ample evidence that when a tax situation is unfavorable, money has wings in Europe.

More on this story here.

EU tax plans will hurt OECD campaign. OECD secretary general Donald Johnstone, in a letter to the EU, lambasted the plan, saying it would damage his organisation’s drive to stamp out harmful tax practices. Already the plan has drawn protest from Caribbean and Pacific Island tax havens, which have threatened not to co-operate if Luxembourg is exempt.

More on this story here.


LONDON: Pressured by the UK government and the EU, Jersey is trying to survive by cutting domestic corporation tax rates to zero in order to preserve the same rates for international companies. “Desperation” says former Jersey advisor.

More on this story here.


NASSAU: The Bahamas has until February to respond to the “harmful tax haven” initiative imposed by the OECD. That is an immediate priority of the newly appointed 33-member Financial Services Consultative Forum, which was appointed by the Government on December 4, 2002 with a mandated to develop strategies aimed at repositioning the industry to better meet the needs of global financial markets. “The pressure from the OECD is still very much alive a well. There is no question that they continue to press issues,” said the Forum head.

More on this story here.


HAMILTON: The deadline for registration of individual trust professionals with the Bermuda Monetary Authority is January 24. Although trust management companies have always been required to register with the Ministry of Finance, it was recommended that individuals who deal with trusts should also be required to sign up, and that both groups should become the responsibility of the financial services regulator.

More on this story here.


MANILA: Since the country came under the threat of economic sanctions for perceived money laundering lapses, lawmakers have railed at FATF, to them a seemingly amorphous force interfering in the nation’s internal affairs. Who are those guys, anyway? A quick background on the organization and their money laundering sanctions history.

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WASHINGTON: Restriction allows presidential waiver.

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Tax reform or anti-tax haven legislation? OffshoreOn.com ponders the possible outcomes and implications here.


OffshoreOn.com gets in their description of what the “amnesty” offers. To be eligible for the amnesty, taxpayers must provide information on the promoters or promotions through which they learned of how to set up the accounts, the IRS said on 14 January 2003. Owners of such accounts who come forward voluntarily would have to pay back taxes, interest, and penalties on the unreported income, but would not face civil fraud charges or criminal prosecution.

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IRS chronology of US court rulings on offshore credit cards here.


WASHINGTON: The Securities and Exchange Commission voted yesterday to back away from some tough restrictions on accounting firms it had considered in the wake of widespread corporate accounting scandals. One of the most controversial proposals would have prohibited accounting firms from crafting tax shelters for audit clients and could have cost the firms up a quarter of their fee income. Accounting industry officials praised the vote as a “balanced” approach that will help restore investor confidence.

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The average US-based hedge fund sustained a loss of 0.2% after fees in 2002 while the average non-US hedge fund had a 0.5% net gain for the year, according to figures released by Van Hedge Fund Advisors International. “For the third consecutive year, the stock market has yielded steep losses while hedge funds have weathered the storm well,” Van Hedge Fund said. “Hedge fund managers have clearly succeeded in finding and exploiting opportunities in these difficult markets, delivering on their reputation for preserving and growing wealth.”

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MOSCOW: Criminal activity in Russia accounts for up to 50% of the country’s total income, according to Chairman of the Financial Monitoring Committee Victor Zubkov. He mentioned that the main sources of this income are fraud, drugs trafficking, the illegal sale of arms, illegal immigration and prostitution.

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Rep. Ron Paul comments on the Bush tax cuts plans. Democrats immediately attacked the plan to eliminate double taxation on dividends, clamoring that only the rich will benefit from a dividends tax reduction. This tired argument ignores the millions of middle class American investors who receive dividend checks and presumably don’t consider themselves wealthy. It also ignores the stimulative effect that any form of tax cut has on the economy. When dividends are taxed only once, as corporate income, investment is encouraged and shareholder demand for dividends increases. This in turn encourages companies to increase profits, because it’s hard to pay dividends if you’re not making any money. But these arguments require some analysis, and the left would rather appeal to base emotions and attempt to paint the wealthy as sinister tax dodgers. The truth is exactly opposite.

When people complain about having 30 to 50% of everything they earn devoured by taxes, the collectivists just shrug. They honestly believe it should be more, much more.

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The really wealthy have known for decades how to legally beat the estate tax. A real-life case study demonstrating how is presented. Trusts, LLC’s, Family LP’s, life insurance, gifts - the full gamut of tools and structures is employed.

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Despite a recession, Americans are getting wealthier. U.S. families grew wealthier during the last three years as the record economic expansion boosted personal incomes, lifted home prices and turned more than half of all households into stockholders, according to the Federal Reserve.

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I f evidence was still needed that the revitalised Franco-German motor is roaring along once again, it emerged when a proposal for dual citizenship between the two powers was unveiled. The revolutionary initiative - part of a program to intensify bilateral relations - would allow German and French citizens resident in each other’s countries to hold the passports of both states. The proposal would allow French and German citizens to vote in each other’s national elections and is being presented as a model and initial step towards the goal of future European citizenship.

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Possible FBI involvement in a high-tech Pentagon project that sifts through Americans’ personal information raises new concerns about privacy and civil liberties, Sen. Charles Grassley (R-Iowa) said Tuesday. The disclosure “only heightens my concern about the blurring of lines between domestic law enforcement and military security efforts,” said Grassley, chairman of the Senate Finance Committee and a frequent critic of the FBI.

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Other senators also expressed concerns about Pentagon, FBI, and Justice Department liberties and privacy violations.

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