November 17, 2004
THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, November 16, 2004 - Vol. 6 No. 220
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In This Issue:
* COMMENT: Where the Dirty Cash Hides.
* OFFSHORE: Man Gets Bad Rap.
* WEALTH: Dollars for Dictators. Golden High. Optimism. Blunders.
* PRIVACY & RIGHTS: RFIDs in Your Drugs.
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COMMENT: Where the Dirty Cash Hides
Dear A-Letter Reader:
For more than a decade those in government who would destroy personal and financial privacy, offshore and on, have been using the phoney issue of "money laundering" to trash tax havens in particular and banking secrecy in general.
Twenty years ago the cry was to stop dirty cash from drugs, then from crimes in general, and most recently, blood money allegedly used for terrorism. In each case the argument was, that for the sake of catching drug kingpins, stopping criminals or thwarting terrorists, everyone just had to surrender their financial privacy to all-knowing, all-wise government agents. Once every citizen stood naked before the money police, the culprits would be found. (Of course, the true reason for all this pressure was to make welfare state tax collecting easier for the US IRS and the UK Inland Revenue, et al).
One nation that bore the brunt of criticism for its strict banking secrecy laws was Switzerland. Critics conveniently ignored the fact that Swiss anti-ML laws are state of the art and strictly enforced; that bank secrecy adopted in 1934 to protect Jews and other refugees from the Nazis are not now hiding criminal cash, but mostly protecting honest peoples' right to privacy.
But what was generally not known, since the news media ignores the fact, was (and is) that the largest volume of dirty cash flows through the leading finger-pointing nations, the UK and the USA.
This week, Pierre Mirabaud, the president of the Swiss Bankers' Assoc., launched an attack on the City of London, calling it "a money laundering paradise." He also criticized the UK financial capital for practising banking secrecy through the back door by using trusts with beneficial ownership concealed.
And he is right. In 2002 the International Monetary Fund estimated that $600 billion is laundered each year globally, half of it is done in the US, including about $60 billion in drug money. The FBI's May, 2001 Law Enforcement Bulletin noted that "...not only does the amount [of money laundered] lie somewhere between $500 billion and $1 trillion, but that half is being laundered through US banks." Other estimates call the United States the source of nearly 50% of the world's dirty money.
The same study reveals that there was only one so-called tax haven among the top 10 jurisdictions where dirty money is invested. High tax nations, like their low tax counterparts, do have laws against money laundering, but they're not very successful. The US Treasury estimates that 99.9% of the criminal money in the US is undetected. Other OECD nations have equally poor records.
And as for that Swiss criticism, even the United Kingdom admits that more than 99% of criminal money in the City of London is laundered successfully.
That's the way that it looks from here.
BOB BAUMAN, Editor
PS: For more about how to comply with money laundering laws, see my new book "Were to Stash Your Cash Legally." Click on the link below:
LINK: http://www.agora-inc.com/reports/190STHOW/W190EB04/
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COMMENT LINKS:
* Swiss bankers slam London finance hub. LINK:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=161&sid=5341277
* Dirty Money More Likely Laundered in High Tax Nations. LINK:
http://www.freedomandprosperity.org/press/p01-15-02/p01-15-02.shtml
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FROM THE EDITOR'S DESK
OFFSHORE: MAN GETS BAD RAP (THE ISLAND, THAT IS)
The UK Guardian, usually a fairly stable source of investigative journalism, rather haughtily sniffed in last Friday's editions: "The Isle of Man has long had a reputation as a seedy offshore tax haven." Now the pejorative "seedy" means worn, shabby, unkempt, or even somewhat disreputable, even squalid.
I'm here to protest that the Isle of Man, (and the Manx men and women I know), are not at all seedy. Indeed, as a tax and asset protection haven this tight little isle in the Irish Sea, west of Great Britain, is one of the best. If it suffers from any disability, it is the constant pressure from the UK Labour government to compromise its financial privacy guarantees and impose unneeded taxes on foreign investors. (Contact us if you want to know more about Isle of Man financial or insurance professionals).
Seedy it is not; very prosperous and highly useful it certainly is.
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WEALTH:
HOW ARAFAT & SADDAM CHEATED THEIR OWN PEOPLE
While posing as the austere champion of a future Palestinian state, Arafat was secretly accumulating a fortune in Swiss bank accounts and hidden assets spread across the world's leading tax havens. Much of it came from US and other taxpayer-financed international foreign aid programs.
On Forbes magazine's rich list of heads of state, Arafat was ranked 9th in 2003 with a fortune of $US300 million. Recent Israeli Intelligence reports estimate his personal fortune at $US1.3 billion. Meanwhile, the extent of the corruption and looting by Saddam Hussein of UN and other funds in Iraq was exposed yesterday in US Senate testimony; $6 billion in Iraqi was missing, only half found; UN wont cooperate in finding missing funds they administered.
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GOLD HITS ANOTHER NEW 16 YEAR HIGH LONDON: For seven years now we've been urging you to put at least some part of your savings or investment portfolio in gold. That's because throughout human history gold always has held its intrinsic value, while paper currencies (like the US dollar) come and go. And at the moment the dollar is going - down! And gold up!
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AMERICAN OPTIMISM - MISPLACED?
US investors cheer the election, shrugging off higher interest rates and economic fears; like a multi-trillion dollar national debt; like a mutli-billion dollar annual deficit; like trillions in unfunded government Social Security, Medicare and pension liabilities; like enormous personal extended credit and debts.
But to paraphrase a former Republican cabinet secretary (circa 1950's) "Whatever is good for Wall Street is good for America."
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BRITISH BANK BLUNDER LONDON: The UK Labour government never has cared much about civil rights and liberties, as evidenced by their radical restrictions on trial by jury and self-incrimination. Their tough, confusing anti-money laundering laws have lawyers, accountants and bankers up in arms. Now it seems, those laws make it difficult for even poor bloaks to open an account at the High Street banks. Of course, Labour blames the banks, not itself.
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PRIVACY & RIGHTS:
INTERNAL SECURITY
The US Food & Drug Administration approves of tiny RFIDs on all pill bottles and capsule containers. Why not put RFIDs on each pill, so the government police will know just what medication each suspect citizen has ingested? That way they can remotely read your tummy contents without your ever knowing your innards are exposed to the police.
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STORY LINKS:
OFFSHORE:
* Isle of Man: Poet faces jail in libel battle with millionaire.
http://www.guardian.co.uk/uk_news/story/0,3604,1349421,00.html
* Isle of Man info. LINK: http://www.ioma.co.im/iom-main.htm
* Isle of Man government. LINK: http://www.gov.im/
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WEALTH:
* How Arafat cheated his own. LINK:
http://www.sundaytimes.news.com.au/common/story_page/0,7034,11371248%5E401,00.html
* US Senate testimony on Saddam's looting of billions.
LINK: http://www.treas.gov/press/releases/js2100.htm
* Gold hits new 16 year high on rocky dollar. LINK:
http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6816178
* Snow's 'strong dollar' call halts in US$ slide.
LINK: http://news.bbc.co.uk/2/hi/business/4012995.stm
* America's financial markets: the Bush bounce. LINK:
http://www.economist.com/finance/displayStory.cfm?story_id=3387325
* British bank blunders.
LINK: http://news.bbc.co.uk/1/hi/business/4012537.stm
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PRIVACY & RIGHTS:
* Tiny Antennas to Keep Tabs on US Drugs
LINK: http://www.nytimes.com/2004/11/15/health/15drug.html
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
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