From: Vincent.Cate@FURMINT.NECTAR.CS.CMU.EDU
Date: Tue, 5 Jul 94 11:40:28 PDT
To: cypherpunks@toad.com
Subject: Offshore Banking
Message-ID: <773433336/vac@FURMINT.NECTAR.CS.CMU.EDU>
MIME-Version: 1.0
Content-Type: text/plain



Some people here are probably interested in this.

   -- Vince

From: privacy@well.sf.ca.us (David Johnson)
Newsgroups: misc.invest
Subject: Offshore Banking & Privacy
Date: 5 Jul 1994 12:59:29 GMT


PRIVACY & OFFSHORE BANKING: What the IRS doesn't want you to know!

By David Johnson


I'll get right to the point!  The purpose of this brief article is to take a
look at banking and investing overseas, using fiscal tax shelters (havens) to 
reduce and eliminate taxes, and foremost, to provide confidentiality in 
personal and business matters.  Period.

For various reasons, offshore banking has been tagged as "unsafe", "risky", 
"illegal", or "for the wealthy".  All are anything but the truth!  It's 
time to dispell the myths!  Let's seperate the fact from the bull!  First 
off, one must understand that it is normal for those who know little or 
nothing about something (besides what they hear from others) to be afraid 
and suspicious of it.  Misinformed financial planners, attorneys and 
accountants may know economics and law in the United States, but few know 
about handling business outside of the country.  Let's tackle these 
misconceptions one at a time:

LEGALITY - There isn't and will never be a law restricting the sending of 
funds outside the United States.  How do I know?  Simple.  As a country 
dependant on international trade (billions of dollars a year and counting), 
the American economy would be destroyed.  How?  Since all U.S. global trade 
is transacted in U.S. Dollars, there would be no imports or exports, due to
the fact that the United States would not be able to buy and sell goods.  
Make sense?  

If you wanted to, you could remove or transfer some (or all) of your money 
our of your bank or credit union to anywhere in the world, LEGALLY.  

U.S. banks and the IRS disseminate negative propaganda dealing with offshore 
banking, making it seem unsafe or some type of criminal act.  Why?  Banks just 
want to keep your money in their institutions to use for thieir own profitable 
purposes.  Did you know that most U.S. banks themselves accept deposits from 
people overseas and often invest in foreign stocks and hold accounts with 
foreign banks?  It's true!  As far as the IRS, they obviously want your money
in U.S. banks where they can tax every dollar you earn in interest, and keep 
track of how many liquid assets you have and where they are.

The confusion with tax legalities is sometimes due to lack of knowledge.  In 
the U.S., tax evasion is a crime, tax avoidance is not.  As you know, there 
are zillions of laws on the books in every country.  Without a doubt, what is 
legal in one place may be against the law elsewhere.  For example, income tax 
evasion is not a crime in jurisdictions where there is no income tax.  Thus,  
in most cases (except those with significant political and/or business weight) 
countries that are not allies usually don't assist other nations in enforcing 
laws that are not laws in their countries.  Further, a country has no legal 
right to conduct an investigation in a foreign country, without consent of the 
respective government.  In reality, a country has every right to deny ANY 
other nation permission to make examinations in their territory.  Therefore, 
it is difficult, if not impossible for authorities in the U.S. to obtain
financial transaction records of tax evaders in many foreign-based 
institutions (outside of those located in areas that have some type of
cooperation treaties).  Strict banking secrecy laws also contribute to the
difficulty. Most tax haves impose lengthy prison terms and/or hefty fines for 
violations of a client's secrecy.  INTER-FIPOL (The International Fiscal Police) 
is the tax crime equivalent of INTERPOL (The International Police Organization), 
which is a network of law enforcement authorities in numerous countries which 
exchange information on criminals.  Many evaders are opening accounts in 
fictitious names and using mail fowarding & pick-up drops for privacy.

PRACTICALITY - Movie-makers and recent international scandals, such as BCCI and 
Iran-Contra, have contributed to negative views about offshore banking.  
Contrary to popular belief, rich criminals and corrupt government officials
make up a small segment of the total number of customers at any given offshore
institution.  Now more than ever, the average American blue-collar worker and 
businessman is using offshore banking as a way to reduce taxes (through legal
avoidance).  Many accounts may be opened for the same amount required in the 
U.S (about $100) or less.  In some cases, there is no minimum opening deposit 
at all.  Further, the interest rates are usually substantially higher than in 
the U.S. (since federal law sets limits on the amount of interest a bank can 
pay you).  But by far, the reason most people turn to offshore banks is their 
confidentiality.

One might ask, "if these banks are so good, why don't they advertise in the 
U.S."?  The answer is simple...they are prohibited!  Federal law restricts 
offshore banks from advertising their services in U.S. magazines and newspapers,
unless they agree to the same restrictions that govern F.D.I.C. institutions
(such as interest limitation).  Why?  That's simple too...to keep competition 
down.  Opening an account with these banks is as simple as writing a formal
letter to the institution and  requesting information about their various
services and the appropriate application forms, and returning them to the bank.
It really that easy!  Most banks never have to see you in person.

SAFETY - All offshore banks are regulated in one form or another, like their 
U.S. counterparts, but minus the limiting federal laws.  Less restrictive 
regulations abroad allow foreign banks more freedom in locating the best 
investments worldwide, allowing them to pass on and share their profits with 
their customers.  As for insurance, forget the F.D.I.C. or other private 
insurance companies!  They usually only allow a liquidity factor (insurance) 
of about 10% of public deposits.  Many offshore banks are self-insured, 
meaning they have AT LEAST one dollar in cash to coverevery dollar on deposit, 
That translates to 100%+ insurance.  Also, the majority of the world largest 
and strongest banks (as far as assets) are overseas, not in the United States.  
Call your local library's business & finance or commercial department and ask
the librarian to look it up.  

INTERNAL REVENUE SERVICE (IRS) - Treasury form 90.22-1 (Report of Foreign Bank
and Financial Accounts must, by law, be completed and returned to the I.R.S. by
June 30th of each year you possess a foreign account.  For a copy of the form,
call the IRS at (800) 829-1040, or check your phone directory for the number of
your nearest forms distribution center.

U.S. CUSTOMS - U.S. Department of Treasury's Currency and Foreign Transactions
Reporting Act details which monetary instruments (checks, money orders, ect.) 
must, by law, be reported to the federal government.  A copy of an illustrated 
circular which explains the act in full is available for the cost of $5 from: 
Worldwide Consultants, 2421 W. Pratt Blvd., Suite 971, Chicago, IL 60645 U.S.A.

WHAT YOU DON'T HAVE TO REPORT - Here are two categories of instruments that you
are not required to report: 

If you make out a personal check or money order to an offshore bank, you don't 
have to report it.

And, if you have a check or money order payable to you, you may restrictively 
endorse it (i.e. pay to the order of XYZ Bank), and you do not have to report it
either.

TAX EVASION - If you deposit your paycheck in a U.S. bank, chances are you've
already paid income taxes on it (unless it is a personal check).  So, you have
no further obligations, since taxes were deducted before the check even hit your
hand.  With a savings or brokerage account, at the end of the year when you get
your annual statement, you simply add the total amount of interest or profit
earned to your income, and pay taxes on the grand total.  The same is only
true offshore if the country the bank is located in imposes a withholding tax.
Since I'm on the subject of taxes, did you know that the United States and the 
Philippines are the only two nations in the world that tax income earned 
outside of their countries?  Anyway...back to tax evasion.  Below are a few 
examples of ways some individuals have cheated the IRS:

A lawyer received payment by personal check from a client and deposited it
in his offshore account.  Since the deposit didn't appear on his business
reords, the chances are it would never be found out (even if he was audited).

One couple sold a valuable antique and had the buyer send the payment directly
to their offshore bank account.  Later the couple used the money to tour 
Europe and the Carribean.

Another example is the S&L bank customer who enticed his "unscrupulous" banker
to electronically transfer a large sum of cash offshore without reporting the 
transaction to the I.R.S..  Then the customer borrowed the money back from the
offshore bank.  Since loan proceeds are not taxable, no taxes were paid.

These types of schemes are no longer used by the rich with extra money to hide,
but by average Americans who don't like to pay taxes on every single cent they
earn.
     
HOW HIDDEN ASSETS ARE FOUND - Having conducted investigations in the
U.S. and abroad, I am familiar with the various techniques which may
be used to locate leads to funds being kept offshore.  Here are a few:

1.  Checking passports (and travel agents) for evidence of visits to "high
profile" destinations such as: Switzerland, Cayman Islands, The Bahamas, Isle
of Man, Netherland Antilles, and other known banking and tax havens.  Travel 
to these type of areas nwill surely throw up a red flag, giving seekers a
place to start looking for your assets.

2.  Examining telephone (home, business & hotel), fax and mobile (cellular)
phone records to identify undisclosed business connections and contacts.

3.  Reviewing credit card statements to determine who you do business with,
where you travel (domestic & foreign), and what products and services you use.
These records leave a revealing paper trail miles long.

4.  Garbage is often sifted through for information such as statements, 
invoices, correspondence, and other relevant material useful in tracking your
affairs.  Use a high-quality paper shredder, discard your garbage at another
location, or burn and crush it.  It sounds drastic, but what you throw away
says a lot about you, and many leads can be found there.

5.  Compiling a list of parties that you have a relationship with (business or
otherwise) by recording the return addresses on your incoming mail.  This
technique can disclose friends, associates and partners.  If you must receive
important mail at your residence or business address, be sure to have your 
correspondents omit using a return address.

6.  Looking into banking transactions.  All withdrawals or deposits $3,000 or
more must be reported by your bank to the federal government, whether made by
cash, check or electronic transfer.  Keep transactions under $3,000.

7.  Checking private courier's logs (UPS, DHL, RPS, Federal Express, Airborne
Express, ect.) for delivery of special or important letters and packages.

8.  Examining telex records of your company or business to locate areas of 
foreign activities.

RESOURCE DIRECTORY

F.E.C., Inc.
Box 959, Centro Colon Office Building-1007
San Jose, Costa Rica

The above company is the JC Penney of financial privacy.  If no one else, 
contact them!  Provide them with your name, mailing address, and mention
SOURCE: 91/12-0695, and they'll send you complete details about their
services by International Airmail.  You'll get information on everything 
you need to know about keeping your assets safe from invaders.  Definately 
an all-time favorite one stop shopping place for many reasons:

1.  They offer damn near every confidential service imaginable.  Here
are just a few:  the Divorce Protection Program, the Savings Account
Program, the Client Loan Program, the Mail Service Program, and others.

2.  Their Representative Program gives the average Joe an opportunity 
to make money 100% tax-free, through commissions by offering their
services to other on a part-time or full-time basis.

3.  They give advice and assistance in tax-reduction and setting up
domestic & foreign corporations in tax havens here and abroad.

4.  All fees are quite reasonable and affordable by almost anyone.



Scope International Ltd.
62 Murray Rd., Waterlooville
Hampshire PO8 9JL, England
Tel: (44) 0705-592255
Fax: (44) 0705-591975

Publisher of numerous reports by Dr. William G. Hill, Esq., the world's most
free-thinking attorney.  They also provide privacy & financial consultations.




TSB Bank                Liechtensteinische Landesbank       Bank of Nauru
25 New Street           FL-9490 Vaduz                       P.O. Box 289
St. Helier              Stadtle 44, Postfach 384            Nauru
Channel Islands         Leichtenstein
Fax 44-53423058


Jyske Bank              Banca Serfin                        Bank of New Zealand
Vesterbrogade 9         Padre Mier Ote 134                  31-05 OCBC Centre
DK-1780 Copenhagen      64000 Monterrey                     65 Chulia Street
Denmark                 Mexico                              0104 Singapore
Fax (45) 33-787833                                          Tel 65-915744

All of the above six institutions provide a wide range of offshore
services including, savings &  checking accounts, loans, credit cards,
traveler's checks, stocks & bonds and global investment services.



Expat World
P.O. Box 1341
Raffles City 9117, Singapore

This newsletter for international free-thinkers is packed with all types
of goodies about living a global lifestyle.  Send $5 for a sample copy.



The International Harry Schultz Letter
P.O. Box 622
CH-1001 Lausanne, Switzerland
Fax: (32) 16535777 (Belgium)

This newsletter is read in 91 countries, and is published by none other than
Harry Schultz, The World's Highest-Paid Financial Consultant (according to
Guiness Book of World Records).  It provides advice and covers worldwide 
economic cahnges.



International Herald Tribune
(800) 882-2884 (in the U.S.)
(800) 535-8913 (from Canada)
(212) 752-3890 (outside the U.S. & Canada)
(212) 755-8785 (fax)

This newspaper is circulated to over 160 countries, and contains articles and
advertisements from financial institutions, office rental and business service 
providers and entrpreneurs around the globe.



Outpost (Wyoming), (800) 331-4460
Fast Foward (Florida), (800) 321-9950
Mail, Messages & More (Nevada), (800) 722-7468
Omni Worldwide Offices (numerous locations), (800) 331-6664
Wayne Budd, Budd Bldg. #5, Eldorado, Ontario, Canada, Fax (614) 473-4460

The above companies are mail fowarding companies provide the fowarding of
mail internationally, send confidential mail to alternative addresses, and 
take and relay  messages.



R.L. Polk & Company
1155 Brewery Park Blvd.
Detroit, Michigan 48207 U.S.A.

Publisher of Polk's International Bank Directory ($67.50).  This publication,
which is updated annually, lists every bank in the world (including its total
assets and heads of each department).  You may view a copy of this publication
at your local library.



American Voice Mail, (800) 347-2861

This company can provide you with a voice mail box where you can receive
phone calls (with a recording left in your own [or someone else's] voice).  
They can set up service in almost any area code and in any name (or alias).



Traceless Phone Calls (900) CALL-888

Domestic and International calls can be made through this number without 
telephone records of where the call went.  The charges are $1.95 per minute
(domestic), and $3.95 per minute (international).  For more information about 
the service, call Int'l Phone Company at (800) 823-0080 or (408) 738-3700.



ABOUT THE AUTHOR - David Johnson is an international consultant specializing 
in privacy, security and investigative matters.  He has lived in Asia for 
close to two years, where he saw ten countries.  He may be reached by E-mail
at privacy@well.sf.ca.us 

YOUR FEEDBACK (QUESTIONS, COMMENTS, NEWS, GRIEVANCES, ECT.) IS ENCOURAGED.

Please feel free to distribute, post, or archive this article on any computer 
system worldwide.  The publication and/or distribution of this article in 
paper format is prohibited without consent of the author.