September 2003
Impossible to please.
Given the high regulatory standards that now exist in recognized OFCs, why does the negative
campaigning continue?
By: Anthony TRAVERS

The OECD claims to seek a level playing field for the financial regulation of all jurisdictions, but it is unlikely to be an impartial referee when 80% of the market is dominated by OECD members. No doubt should exist that the new standards of transparency have resulted from the highly successful OECD initiatives and in part from the pressure applied by the FATF with regard to money laundering. But given that those standards have now been introduced, why is it the case that no one has yet turned off the negative information used to shape public opinion prior to these initiatives? (read)

August 2003
The days of the smaller European financial centers are numbered.
Report sounds death knell for offshore tax havens
By: Mattias LEVIN

The days of the smaller European offshore financial centers such as the Isle of Man, Gibraltar and Guernsey are numbered because of a sustained campaign by world regulators, a Brussels think tank has found. Their demise will likely bolster 'legitimate' offshore centers according to the report published earlier the Centre for European Policy Studies. (read)

August 2003
New US Tax Collection Strategies: The IRS is expanding the American Family
By: David S. LESPERANCE

Are you a Member of the American Family? New US Tax Collection Strategies may identify you as a US Citizen and a taxpayer with a tax bill. There are several million people living around the world who may be unknowingly committing US tax evasion each year. The US government labels them as 'non-resident non-filers' and until now has been unable to collect taxes from (or even identify) these individuals. This situation has existed ever since the United States re-introduced its current income tax regime at the time of the First World War. Times are, however, changing dramatically.

The Internal Revenue Service (IRS) now has the means to find these individuals and collect outstanding taxes, interest, and penalties from assets located outside the US. Are you going to receive an unexpected US tax bill? (read)

July 2003
How the IRS Interest-Reporting Regulation Will Hinder the Fight Against Money Laundering
By: Dan MITCHELL

On January 17, 2001, as part of a blizzard of rulemaking during the final days of the Clinton Administration, the IRS proposed a regulation to compel U.S. financial institutions to report bank deposit interest paid to nonresident aliens – even though this information is not needed to enforce U.S. law. The Bush Administration withdrew most of the controversial 'midnight regulations' proposed by the previous Administration, but officials in the Office of Tax Policy at the Treasury Department inexplicably have fought to keep the IRS's interest-reporting regulation alive. The latest argument used by these officials is that the regulation will help the fight against dirty money. Like every other assertion made by Treasury Department personnel, this claim is demonstrably false. Indeed, the regulation will make it harder for U.S. law enforcement officials to investigate and prosecute criminals and terrorists by driving funds to foreign banks. (read)

July 2003
The Republic of Mauritius, Financial Services Center
Roadmap to the future: the Luxembourg/Mauritius DTA
By: Dr Ludovic C. VERBIST

Mauritius has evolved into a successful Financial Services Center. It has a good reputation and is well regulated. Mauritius has never been included on any blacklist. In addition, the recent conclusion of the double taxation agreements ( DTA) with European countries shows its good-standing among these countries.

Mauritius has always been a regulated jurisdiction, since its inception. Like Luxembourg, Mauritius is the jurisdiction where there is a combination of a company which can use the double taxation agreements (DTA) next to a zero tax company. (read)

June 2003
The U.S. as an Offshore Jurisdiction
By: Walter H. DIAMOND

Although the recent wave of criticism of offshore operations by the world's leading trade and financial organizations as well as by Government agencies has forced implementation of tight restrictions against tax avoidance, there still are numerous advantages of going offshore. While one no longer should use an offshore jurisdiction to avoid taxation, there are many other benefits, including lowering taxes, available in today's world of globalization. (read)

June 2003
Offshore Financial Intermediaries and Private Banking Sector:
Present and future issues and opportunities
By: Samuel M. LOHMAN

The author is bullish on the future of the Offshore World. As long as there are persons who have accumulated wealth, there will be the need for professionals with expertise in wealth planning. Clients that are successful in their given discipline generally see the need to seek assistance in matters outside their expertise. (read)

June 2003 Offshore structures for UK domiciled and resident individuals (or companies).
By: Simon DENTON

Simple offshore structures have ceased to be effective in reducing taxes due to a raft of anti-avoidance legislation. However, life insurance contracts may be used to 'decontrol' an offshore structure for tax purposes and allow an offshore structure to be most effective in deferring taxes indefinitely. Most governments treat insurance contracts very sympathetically. (read)

June 2003
The Kiss of Life: Innovation and adaptability in the Bahamas.
By: Timothy COLCLOUGH

Like most offshore nations, The Bahamas continues to evolve. Ever striving to strengthen the product range and regulatory structure, the Bahamas are looking to place themselves ahead of competing nations and become the investor’s jurisdiction of choice. Case in point, and in addition to the positive changes already implemented, proposed legislation relating to new corporate structures and an upgrade of the Mutual Funds Act, among others, is currently being considered. (read)

May 2003
Marketing Offshore Financial Services
By: René A. KOOYMAN

The offshore sector is a growing industry. Surrounding each of the major trading blocks of the world economy is a growing number of jurisdictions often known as 'tax havens'. It is a sector that has been formed by a growing competition in the financial markets.

The article discusses the marketing perspective: International competition and cooperation, product dynamics, international competition in the public domain.

The offshore market has grown and become well known to the larger public for its simple, easy to understand and relatively cheap tax-avoiding products. No longer however will these simple solutions be sufficient. Three developments in the sector can be identified: from offshore to onshore, from well-to-do individuals towards institutional structures, from single-topic services towards all-inclusive family-office activities. (read)

April 2003
The ENRON Scandal
The little-known story how it started and its consequences
By: Dorothy B. DIAMOND

During the past year news about the offshore world has progressed from a sequestered spot in the business section to sensational front page headlines. Scandals about extravagant spending by top executives even inspired a trendy article in a newspaper’s lifestyles section advising how to behave at a dinner party when a prominent guest is under indictment for corporate fraud. Then there’s also the New Yorker cartoon showing a headstone engraved with a list of adjectives describing the deceased tycoon’s praiseworthy qualities ending with the word ‘BUT’ in large capital letters. (read)

February 2003
International Tax Competition Outlook
By: Dan MITCHELL

Supporters of tax competition, financial privacy, and fiscal sovereignty had a pretty good year in 2002. The hard work of many people inside and outside the Administration helped convince the White House to reject the European Union's (EU) proposed Savings Tax Directive. The 'harmful tax competition' scheme of the Organization for Economic Cooperation and Development (OECD) remains moribund, largely thanks to leaders in many low-tax jurisdictions and free-market groups in the United States.

But this does not mean that the news is all good, or that the battles have all been won. Indeed, every single victory should be viewed as a temporary respite. (read)

February 2003
IRS Offshore Amnesty Program
By: Howard FISHER, Samuel M. LOHMAN and Donald 'Mac' MacPHERSON

In the fall of 2000 the IRS issued subpoenas to credit companies such as American Express and Master Card International to produce credit and ‘debit’ cars that were issued to ‘offshore" trusts and corporations - especially debit cards. As a result of its investigation the IRS has uncovered over a hundred thousand potential cases of tax fraud.

Faced with the Herculean task of investigating and prosecuting thousands of credit/debit card cases, as well as the following up on leads from these cases, on January 14, 2003 the IRS announced an amnesty program for Americans with any type of ‘offshore financial arraignment.’ The program is called The Offshore Voluntary Compliance Initiative. This is a very generous program, and should be considered by anyone with a questionable offshore arrangement. (read)

February 2003
How France can become an attractive onshore jurisdiction for High Net Worth Individuals
By: Cecile VILLACRES

France is seldom seen as a low tax jurisdiction - which it can be, provided everything is correctly planned. When carefully structured there are several very interesting onshore solutions for high networth individuals under French tax law. Indeed, with careful structuring a marginal taxable income tax rate of around 50% can be reduced to between 0 - 10% of taxable income—a figure which is below the rate of Switzerland and the other countries of the European Union. (read)

February 2003
Money Laundering: Know Your Banker
By: Humberto J. AGUILAR

In the 1970's and 1980's it was fun to try to beat the system by creating the sort of schemes that was meant to circumvent the guidelines against money laundering that were created by the financial and governmental institutions. But all that changed when the Vice-Presidential Task Force arrived and they tried to put all of us out of business. (read)

February 2003
Asset Protection Trusts – Theory and Practice
By: Ben BENDELOW

Asset Protection Trusts (APTs) first came to prominence in the USA in the mid 1980s. The underlying concept behind an APT (sometimes called an Integrated Estate Planning Trust (IEPT)) is merely to bring estate planning theory, which used to focus on death or terminal planning, into line with the new reality of clients: living very much longer, and becoming richer at much earlier in their life.

Given the practical long run limitations of some of the planning techniques available, many practitioners have determined that some sort of trustee structure is the most appropriate vehicle for long term estate planning, essentially because such structures can be designed to be extremely flexible over time. Hence the birth of the so called Asset Protection Trust. (read)

February 2003
The 2002 Globalization Index: Globalization's Last Hurrah?
By: A.T. Kearney/Foreign Policy Magazine

In an attempt to make sense of the borderless world the second edition of the annual A.T. Kearney/Foreign Policy Magazine Globalization Index has been published. This index has been developed to quantify the growing internationalization of international financial structures. Last year the index offered a 'before' photo on a worldwide scale—a snapshot of global integration prior to the September 11, 2001, attacks. This year’s index, in turn, gives a glimpse of the developing 'after' image—an opportunity to assess the initial impact of the attacks on a process that many analysts see as the driving force of our times. (read)

February 2003
Switzerland: the new LBA Ordinance
By: Sebastien Morret

In Switzerland, the Federal Law on the Prevention of Money Laundering in the Financial Sector of October 10, 1997 regulates the measures to combat money laundering within the Swiss Penal Code. All financial intermediaries have the obligation to identify all clients and to establish the beneficial owners of the assets. Furthermore, they must report any justified suspicion of money laundering to the authorities and freeze the suspicious assets.

The Federal Money Laundering Control Authority adopted a new Ordinance concerning the professional activity of financial intermediary in the non-banking sector that entered into force on September 15, 2002. This Ordinance clarifies the determinant criteria to consider that a financial intermediary acts 'on a professional basis' . (read)

August 2002
Europe's quest for tax harmonization
By: John BLUNDELL

Europe's remorseless quest for tax harmonization shows no sign of abating. Its latest tax-harmonization initiative - the Savings Tax Directive - seeks to obtain wide international agreement on the need for collecting and exchanging confidential financial data on nonresidents. This would enable high-tax nations such as France and Germany to tax outside their borders and would go a long way toward creating a global tax cartel - or what one U.S. commentator has described as 'a kind of OPEC for politicians.'

The EU, of course, lacks direct means to influence tax rates outside its borders. But the Savings Tax Directive will give participating states the means to impose home-country taxes on citizens regardless of where they save or invest. (read)

August 2002
Legal and tax aspects when executing projects in the Netherlands
By: Hans J. Hoegen Dijkhof

The more international business is becoming, the more we see foreign companies carrying out various activities in different countries. In the Netherlands there are permit, income tax, social security, corporate tax, contractual and other issues to consider if one wants to execute projects as a foreign company. The position of workers from an EU country is very different from a non-EU worker. Under Dutch law, Dutch taxation will largely depend on a person's actual residence. In practice, an expatriate is considered to be a Dutch resident if his family accompanies him to the Netherlands. Married or single, persons are considered to be Dutch residents on the basis of the factual circumstances, particularly personal and economical ties. (read)

May 2002
Tax Reform in Cyprus in View Of Accession to the European Union
By: Emily Yiolitis

The prospect of Cyprus' accession to the European Union offers wide opportunities for modernization of the Cyprus economy through revision of the outdated tax policy currently in application. Legitimately, the prospect of accession to the European Union with the necessary harmonization which accession entails, has led to the necessity to rethink the tax policy of the Republic. (read)

May 2002
The Caribbean has surrendered
By: Ian Kilpatrick

The Cayman Islands Government in its attempts to lead the offshore world in international co-operation created a Monetary Authority. Their legislature passed stringent anti money laundering laws. It seems to be a prime example of how the OECD, FATF, FINCEN and the many other entities succeeded in imposing their standards and beliefs on the world at large which has significant implications for privacy, free trade, sovereignty and most importantly rule of law. (read)

March 2002
Book Review: The Asset Protection Trust Question Revisited
Picking the Proper Path to Protection
By: Matt Blackman

The topic of asset protection trusts is not covered often in the financial Magazines. However, the topic of asset protection should still be as much front and center in the minds of all high-net worth individuals and companies. The 604 page publication 'Asset Protection Planning Guide – A State-of-the-Art Approach to Integrated Estate Planning', offers a crash course on the topic, discusses the cost thresholds, a topical framework and an overview of potential options for the practitioner. (read)

March 2002
Paris has Surrendered, Onward to Brussels
February 28 2002: The OECD Deadline
By: Daniel Mitchell

The OECD's February 28th deadline for receiving 'commitment letters' has come and gone. The OECD has welcomed in its reports the commitments made by jurisdictions in addressing harmful tax practices. Dan Mitchell's Perspective is different. Mr. Mitchell outlines how the February 28 2002 deadline has past and the OECD '...did not receive a single meaningful 'commitment'. Most low tax-tax jurisdictions ignored the OECD's imperialist demands'. (read)

March 2002
U.S. Qualified Intermediary: One Year On
Bankers (and others) Anxiously Await Phase II
By: Edward Flaherty

With the passing of the one year anniversary of the 'qualified intermediary' ('QI') agreements between the US Internal Revenue Service and bankers from around the world, the QI's are now bracing for the real bite of the QI regime to kick in.

Mr. Flaherty's article gives a brief overview of the QI to date and speculates on what non-US banks and financial intermediaries can look forward to, at least over the next two years. (read)

March 2002
United States Proposals and Presidential Executive Order 25th of September 2001
By: Leonard A. Miller

As reported by Leonard A. Miller the United States is moving rapidly to strike back at terrorist organizations and deprive them of the resources necessary to carry on their illegal activities. These new measures include legislation and executive orders designed to strike at the financial assets and activities of terrorist organizations. (read)

December 2001
Cyprus International Trusts and their uses: The asset protection and tax planning perspectives
By: Emily Yiolitis

The use of the Trust as a vehicle of prudent international tax planning and business structuring is constantly growing. Trusts have been created for many reasons, in an effort to reduce tax liabilities, to alter the devolution of assets on death, to avoid the inconvenience and publicity of probate and to protect assets from actual or potential creditors. The article focuses on the popular "asset protection trust". Special attention is given to this "product" launched by legislators wishing to attract investors to their local market. The article outlines the main advantages of an asset-protection trust and the specific planning advantages which accrue in the context of the Cyprus domicile. (read)

December 2001
Transfer of Residence: Immigrating into Malta
By: Hans J. Hoegen Dijkhof

The last 10 years Malta experienced a spectacular growth. On this basis it would like to become member of the EU. According to the EU there are too many exemptions in the VAT system and imbalances in the income tax system. The European Commission also urges the Maltese Government to liberalize the economy and stop supporting ship building. Malta itself is desirous to limit second residences for foreigners. (read)

December 2001
ST. LUCIA Update
By: Nicholas John

St. Lucia’s International Financial Services Industry has put into place seven pieces of legislation designed to make the jurisdiction a modern center for international financial services. The Government of St. Lucia has given the highest priority to the sensitization of practitioners to due diligence processes, programs relating to the "know your customer" principle and anti-money laundering programs. (read)

August 2001
St. Lucia, the perfect profile for financial services
By: Anthony Bristol

After years of deliberation, planning, and the launch of St Lucia into the financial services industry in March 2000, the island is establishing itself in the market as a unique and reliable model jurisdiction for financial services. The key ingredients in this winning formula are a suite of legislation that meet both confidentiality and regulatory expectations, committed regulated professional service, a state of the art public online registry system and a private sector promoter. (read)

August 2001
OFFSHORE REVOLUTION - TO BE OR NOT TO BE!
By: Mr E (Ben) Bendelow