Safe havens face crackdown

[Dover]

Safe havens face crackdown

Offshore financial centres are braced for a mauling by Government regulators and tax authorities as the blame for failings in the financial system spreads far and wide.

..snip..

In the US, Barack Obama has made the fight against tax havens a part of his presidential campaign, even though Delaware, home state of his running mate Joe Biden, is seen as the pre-eminent tax haven for large US corporations.

In July, a US Senate fi nance committee called for greater powers for tax authorities to combat off shore evasion.

One official study estimates that off shore abuses cost the US Government $100bn (€77bn) a year in lost tax revenue.

US Senator Max Baucus says: “If we strengthen transparency for US holdings in places like the Caymans, it will be a lot easier to tell who is not playing by the rules.”

All this suggests off shore centres will need to demonstrate emphatically they can add value to the global economy...cont'd

http://www.wealth-bulletin.com/wealth-business/content/3452656987/


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Excerpt from Mother Jone's article, Trillion Dollar Hideaway:

Secret accounts have traditionally been the province of private banks in Switzerland, Austria, and Luxembourg. But those nations have lost favor among depositors in recent years as they have eased bank secrecy laws in response to international pressure. Small states in the Caribbean and the South Pacific, eager to offset declining tourism and lower prices for farm exports, have rushed to fill the void, turning to offshore banking as an easy and effective means of attracting big money from abroad (see "Tropic of Tax Cheats," this page).

But it's not just microstates that are profiting from the offshore boom. The world's largest financial institutions are also growing richer by offering private banking services to their top clients. Big-time American players include Merrill Lynch, Chase Manhattan, J.P. Morgan, Morgan Stanley, and Goldman Sachs. The leading U.S. private banker is Citibank, which administers trusts and shell corporations for some 40,000 clients through its operations in New York, London, the Bahamas, the Cayman Islands, the Isle of Jersey, and Switzerland.

To open an account, private banking clients must generally deposit at least $1 million. According to a report by the Senate Permanent Subcommittee on Investigations, private bankers then assign the client a "relationship manager" who creates offshore trusts, handles all financial transactions -- and helps ensure secrecy. "Private banks routinely create shell companies and trusts to shield the identity of the beneficial owner of a bank account," the report states. "Private banks also open accounts under code names and will, when asked, refer to clients by code names or encode account transactions."

One former private banker who had more than 30 clients, each with as many as 15 shell companies, told the subcommittee that his own bank prohibited him from keeping any records linking front operations to their owners. In another case, Federal Reserve examiners asked Bankers Trust to create a database identifying the owners of shell companies. The bank complied -- by setting up the database on the Isle of Jersey in the English Channel, which requires U.S. investigators to request names on a case-by-case basis from Jersey courts. The effort to create and shelter multiple accounts "complicates regulatory oversight and law enforcement," the Senate subcommittee concluded, "making it nearly impossible for an outside reviewer to be sure that all private bank accounts belonging to an individual have been identified."

The secrecy makes it easy for clients of private banks to hide their wealth, whatever its source. Citibank's clients have included the family of Sani Abacha, the former Nigerian general who plundered billions of dollars from his nation's treasury, and dictator Omar Bongo of Gabon, for whom Citibank established a Bahamian shell corporation to stash his looted treasure. Citibank also helped Raul Salinas, brother of former Mexican president Carlos Salinas, by transferring tens of millions of dollars out of Mexico and depositing the money in European banks under the names of untraceable companies registered in the Cayman Islands. Citibank never used Salinas' name in bank communications, referring to him instead as "Confidential Client Number 2," or "CC-2." ...cont'd

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4172433


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Apparently "private bank" is code for 'tax haven for the wealthy'.

[Tandalayo_Scheisskopf]

1. From what I understand...

The real action, where the hard assets are kept, is on Cayman Brac. I have looked at the island in Google Earth and it would be absolutely perfect for a surprise Marine Amphibious Assault exercise, and they can take some things back to the states when they finally leave. :evilgrin: