From: tcmay@got.net (Timothy C. May)
Date: Sun, 11 Aug 1996 04:28:35 +0800
To: cypherpunks@toad.com
Subject: Data Havens in Anguilla About to End?
Message-ID: <ae321e2b0402100474e7@[205.199.118.202]>
MIME-Version: 1.0
Content-Type: text/plain


At 5:16 PM 8/10/96, Anonymous wrote:
>As of immediately, the "taxBomber's Site & Internet Offshore Center"
>has been pulled by our Anguilla provider and will remain inaccessible
>for a few days.
>
>This is the work of some journalist hacks who did a major job of
>character assassination by claiming that we (and our provider)
>were involved in selling fake passports.

"Pulled by our Anguilla provider."

This says it all about the probable viability of nominally offshore providers.

(I assume this is Vince Cates' site, though I haven't doublechecked...he's
the only Anguilla provider of similar sites I know of. I certainly mean no
criticism of Vince, if it was indeed his site. My comments are analogous to
what we might say about a particular remailer site going down, even if we
don't criticize the site operator for removing his remailer.)


>But now, it seems, little Anguilla is getting "worried about its
>international reputation".
>
>Well, they are right, though with a vengeance: the reputation they
>have most certainly lost as of today is that being of one of the
>world's last truly liberal tax and data havens ...

I'm not an expert on offshort tax and data havens, but *any* country can be
pressured by larger countries, and even by the glare of publicity. If a
country derives very little revenue from "permitting" some service, and the
costs (they believe) are much greater than the revenues, they will likely
act. Thus, the negatives of allowing offshore data havens in Anguilla may
easily exceed the few thousand dollars (or whatever) they get in taxes and
fees (whatever they might be) from Vince and his customers.

Longterm, I've never believed there is much safety in locating in *any*
physical country. (By this I mean advertising and making it clear that one
is in Country X, said to be "friendly" to tax avoiders, data havens, money
laundering, etc. Policies can and do change overnight. Corrupt governments
are, well, corrupt, and will change tunes if another piper pays them
enough.)

The case in Switzerland, with banking, is quite a bit different, with huge
deposits and huge fees from their financial services. Even so, Switzerland
has continually yielded more ground to tax collectors and various pressure
groups from large nations.

I'd guess that Vince has had a fun time in the Carribbean, but that he'll
be closing up shop sometime soon. Once some services are yanked, confidence
is lost.

The interesting question will be whether the U.S. authorities and
especially the Internal Revenue Service will put pressure on him if he
chooses to return to the U.S.

(Assuming this was Vince's service that is. But even if it wasn't, pressure
on another service means pressure on all Aguillan services.)

--Tim May

Boycott "Big Brother Inside" software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Licensed Ontologist         | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."