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The first thing that comes into most people's minds when they think about keeping their money safe from protection rackets (legally sanctioned and otherwise) is a notion of offshore banking. It sounds great--send your money to a whole different country and Uncle Sam (or his local equivalent) won't be able to get his greedy claws into it. Offshore banking does indeed provide some privacy and security for some people. However, it's not the panacea it may first seem to be, and trying to set up something new these days can be downright dangerous.
Keep in mind that, whatever the assurances given you by a bank in a "tax haven" country, few things will get the state more upset more quickly, or cause it to play dirtier, than messing with its income. That wonderful hob-goblin of the late 20th century, the War On (Some) Drugs, has enabled, among many other grievous erosions of freedom, a serious loss of financial privacy. We have to stop the heinous crime of "money laundering," after all If we could take the profit out of the drug business, the whole mess would just go away, right? (Sigh...If only they believed that, or actually wanted the problem to go away!)
What does this mean in specific terms?
Let's consider the example of Anguilla, a beautiful island with no personal or corporate income taxes. Anguilla has decided to attract folks with money by beefing up their financial privacy laws and making it easy for people to set up their own offshore businesses and accounts. The Anguillan Registrar of Corporations says, "It's my business to allow people to trade anonymously and avoid paying tax." Sounds great, doesn't it? They've even created a web site to help people get all set up.
The problem (for most readers) is that they are a British protectorate, and the US has very close ties with the UK. Law enforcement agencies of the two countries work pretty closely together--England is even in on the NSA's formerly super-secret ECHELON spy system. So, while Anguilla says your privacy is safe with them--and the financial privacy laws they've passed are indeed very strong--they also say that they are looking for legitimate businesses. Money launderers need not apply. The witch-hunt hysteria of the drug warriors in the US has it so that anything you do to make, keep, and use money illegally is money laundering, and, of course, not paying taxes is illegal (according to the feral Thought Police). Rest assured, if the IRS finds out about your Anguillan company and bank accounts, they're not going to be happy. Once the Ferals decide they want you, it's easy for them to have an appropriately scary agency make up charges (if Waco showed nothing else, it showed us that the Ferals are willing to make up any kind of BS in order to justify whatever action they want to take) against you for crimes that are illegal in Anguilla. This is important, because the Anguillan banks will cooperate with a valid subpoena from local law enforcement, and British Commonwealth countries are committed to helping the US eradicate the scourge of drugs.
Unfortunately, it isn't just Anguilla; most people have heard that the once much vaunted "secret Swiss bank accounts" are no longer much protection from international law enforcement. The bottom line is that there isn't any account in any kind of "legitimate" bank anywhere in the world that will stand up to all the weight the US can bring to bear, if it decides to.
What makes things even worse are the rumors circulating about services that once helped people set up offshore accounts. Apparently, some have been entrapped and subverted by the Though Police and are now luring people in, only to hand them over to the very authorities those people are seeking to avoid. There are even stories of the Ferals setting up offshore bank "sting" operations to catch would-be tax evaders themselves directly. If I didn't make it perfectly clear before, the Ferals really, really don't like it when you decide you don't want to play in their rigged games any more. So, be extremely cautious when approaching and/or dealing with offshore service providers, especially the ones that troll the Net.
About the only offshore service provider that I haven't had reason to be suspicious of, or disappointed in their service, is PT Shamrock. The fellow in charge is a bit impatient with people who don't read what his web site has to say about his products before asking silly questions, but he's prompt in answering e-mail and pretty serious about his business. I have not heard any rumors at all of anything negative about PT Shamrock, so I do encourage interested people to check out their site--at the very least, it's educational. However, I am not saying, and cannot say, that I know they are safe. Caveat Emptor. Some others that I haven't heard scary things about, but have not proved very reliable in the service end of things, are: OffshoreNet and Maritime International Limited.
So, what to do?
Well, if you don't live in the US or a country in the British sphere of influence, Anguilla might not be such a bad option. Are you a small fish? Are you worth lying to the government of Antigua (that's not a typo, but another popular offshore banking location) to catch? Is it just your personal assets you want to protect? These are the kinds of questions to be asking. If you're not pissing off the Thought Police and giving them a reason to spend serious resources coming after you, if you're not doing anything that will draw a great deal of attention to yourself, a well-researched and referenced (get someone to vouch for them) offshore setup may work for you. Something like the Panamanian Bearer Corporations, and other International Business Corporation (IBC) & Limited Liability Corporation (LLC) products brokered by companies like PT Shamrock might work.
On the other tentacle, if you're planning on doing anything public, or that might attract a great deal of Feral attention, your safest best is to chuck convenience and don't use banks. (Unless, of course, you're into some serious wealth--say, you're a multi-millionaire drug merchant--in which case you probably already know all about setting up front companies within front companies and such subterfuges that make it too much expense and bother to track you down.) In an upcoming article I'll discuss some alternatives to using banks.
It's a minefield out there; tread very carefully!
(c) 2000
