THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, December 7, 2004 - Vol. 6 No. 235
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In This Issue:
* COMMENT: America's Dumb 'Intelligence'
* OFFSHORE: Swiss Citizenship Costs. Bermuda Conviction. Jersey OK.
* WEALTH: Freeze Reversed. Baer Sells to UBS. Easterners Wary of Euro. Canadian Tax Kills U.S. Real Estate Deals. U.K. Opposes EU Tax Rules.
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COMMENT: America's Dumb 'Intelligence'
Dear A-Letter Reader:
There are a good many definitions for that expansive word 'intelligence.' It's something to think about today, Pearl Harbor Day. Remember December 7, 1941, 'a day that will live in infamy'?
Right now, as you read this, the 'lame duck' US Congress is again engaged in what the media loves to portray as a struggle over the 'intelligence bill' recommended by the 9-11 Commission. The tug-of-war is between Republicans in the US House, and the Republican in the White House. The news folks don't give a damn about the real story; it's the fight, the game they want to report. And just as with the PATRIOT Act, ram it through Congress, even if you don't know what's in the bill.
In the case of this bill 'intelligence' means the government gathering of secret information about actual or potential enemies, i.e., terrorists. It also refers to US agencies who are supposed to gather such information but who have done a very poor job of it, as witness the events of 9-11. And the events at Pearl Harbor.
But intelligence also means 'the capacity to acquire and apply knowledge.' So here's intelligence you need to know about this pending legislation; and it's enough to discourage anyone who still believes the US Congress is there to protect your rights and liberties.
As the House and Senate wrangle over immigration and Pentagon power in the bill, civil libertarians are rightfully upset about the repeal of the 'sunset' clause of one of the most anti-privacy sections of the PATRIOT Act, allowing it to be extended permanently without congressional review. This supposedly was designed to fight money laundering by forcing businesses to conduct even more customer surveillance. And it does so even though the 9/11 Commission report questions the very effectiveness of 'know-your-customer' programs.
Title III of the PATRIOT Act requires almost all businesses (defined as 'financial institutions') to set up anti-money laundering programs similar to those used by banks. The phrase is defined so broadly that it includes auto dealers, jewelry stores, travel agencies, and financial service providers, plus any business the US Treasury says has a connection to money laundering, meaning nearly everyone. Like banks, these businesses are being forced to report 'suspicious activity' which the government defines as anything that deviates from a customer's 'normal' transactions. In other words, almost anything. Now everyone is a government spy.
Destroying privacy as anti-money laundering, unfortunately, is still all the rage in Washington. Title III was added to the PATRIOT Act by a then Democrat-controlled Senate and championed by Sen. John Kerry.
Members of both parties also seem willing to trample civil liberties by supporting anti-money laundering laws that attack so-called 'tax havens,' as does Title III of the PATRIOT Act. For traditional financial services alone, compliance with the PATRIOT anti-money laundering provisions is projected to cost $10.9 billion by the end of 2005. Every penny of that is paid by you in increased fees and prices. And how many terrorists has it caught?
The 9-11 Commission stated: 'It is an open question whether such legislative or regulatory initiatives would have significantly harmed al-Qaeda, which generally made little use of the US financial system to move or store its money.'
As Reason magazine points out, this adds to 'the case made by national security and privacy experts for a more targeted approach with human intelligence and targeted surveillance of specific entities believed to be funding terrorism, rather than the current requirements that every US bank, jewelry store, and car dealer profile all their millions of customers for supposed suspicious activity.'
But then what would the US police state bureaucracy do if reason and the right to privacy actually prevailed in Washington?
That's the way that it looks from here.
BOB BAUMAN, Editor
PS: If you want to know more about how the PATRIOT Act impacts you financially, read about it in my new report. Click for details:
LINK: http://www.agora-inc.com/reports/190SPATY/W190EC07/
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* COMMENT LINKS:
* Deadlock on intelligence bill reportedly solved. LINK:
http://www.nytimes.com/aponline/national/AP-Congress-Intelligence.html
* Citizen Snoops Forever. Reason magazine.
LINK: http://www.reason.com/hod/jb120604.shtml
* Money Laundering Law to Be Extended. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A19473-2004Nov2.html
* Show Us Your Money: PATRIOT Act lets feds spy on your finances.
LINK: http://www.reason.com/0311/fe.jb.show.shtml
* USA PATRIOT Act Regulations for Jewelry Industry.
LINK: http://www.ustreas.gov/press/releases/js990.htm
* Combatting the Surveillance Industrial Complex. LINK:
http://www.aclu.org/SafeandFree/SafeandFree.cfm?ID=16224&c=207
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* FROM THE EDITOR'S DESK:
* OFFSHORE:
* THE HIGH COST OF SWISS CITIZENSHIP
BERN: The very high costs of obtaining coveted Swiss citizenship will a drop in one more year. Beginning in 2006 local and canton governments will no longer be able to charge huge fees, but will be forced to limit fees to cover actual costs. In Zurich the bill can go up to SFr100,000 ($87,827). This was the case in Geneva up to 2000, but the ceiling now is at SFr2,200, plus a cost of SFr270 for the new Swiss citizen to take the oath.
For more information about obtaining Swiss residency and citizenship. see the LINK below to Henley & Partner.
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* BERMUDA CONVICTS FIRST MONEY LAUNDERER
HAMILTON: A bank teller found guilty of laundering some $136,000 was sentenced in Bermuda's first money laundering prosecution. She was given an 18 month suspended prison sentence for a total of 36 counts of money laundering involving money from drug trafficking. Prison was avoided due to 'mitigating circumstances.'
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* JERSEY NOT CONCERNED ABOUT U.K TAX AVOIDANCE
ST. HELIER: Channel Island says it can deal with new UK rules and tax shelter disclosure requirements; sees no major anti-offshore impact.
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* WEALTH:
JUDGE REVERSES DOCTORS' MASS ASSET FREEZE
SAN DIEGO: A US federal judge has dealt a blow to IRS efforts to curb tax shelters it considers abusive, lifting a rare freeze on more than $500 million in assets of thousands of doctors and dentists who invested through a company in San Diego. Until IRS rules the business in question were invalid for tax deductions, freezing assets from those transactions is inappropriate, the judge reasoned. Wow! A reasonable judge on an IRS issue!
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JULIUS BEAR U.S. SELLS OUT TO U.B.S.
ZURICH: Swiss banking group UBS, the world's largest wealth manager, said on Monday it had bought local rival Julius Baer's US wealth management business. UBS did not disclose financial details of the deal, which gives the UBS group control of a business managing $4 billion worth of private funds.
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EASTERN EUROPEANS WARY OF EURO
FRANKFURT: The euro is at record levels against the dollar, but Europe's common currency, which replaced marks, francs and other national currencies for 300 million Europeans in 2002, is not likely to reach the 75 million people in the newest European Union countries for several more years. They're are doubts.
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CANADIAN TAX KILLS U.S REAL ESTATE DEALS
OTTAWA: Canada levies a withholding tax on the rental income of foreign real estate investors at a rate of 25%. That's killing US investor interest in north of the border real estate.
* New US tax law changes will impact everyone. See LINK below.
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BRITISH DEFEND AGAINST EU TAX LAW RULINGS
LONDON: UK government is seeking ways to defend against EU Court of Justice rulings which may undermine or abolish some national tax laws. EU rulings are seen as major threat to UK revenues and are aimed at taxes that make distinctions between domestic & foreign persons.
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* OFFSHORE LINKS:
* Becoming Swiss no longer costs a fortune. LINK:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=111&sid=5386554
* Henley & Partner, Swiss residency & citizenship.
LINK: http://www.henleyglobal.com/switzerland.htm
* More about dual citizenship & how you can get it.
LINK: http://www.agora-inc.com/reports/190SGOPS/W190EB07/
* Bermuda money launderer gets suspended sentence. LINK:
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20041206/NEWS/112060105
* UK Budget targets tax avoidance issues.
LINK: http://www.thisisjersey.com/business/business1.html
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* WEALTH LINKS:
* Judge lifts asset freeze in doctors' US tax shelter case.
LINK: http://www.nytimes.com/2004/12/05/politics/05tax.html
* UBS to buy Julius Baer US business. LINK:
http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20041206&ID=4129793
* In Eastern Europe, Scepticism Over the Euro. LINK:
http://www.nytimes.com/2004/12/06/business/businessspecial2/06eu.html
* Canadian Tax System Deters Investment From US.
LINK: http://www.tax-news.com/asp/story/story.a sp?storyname=18161
* New US Tax Law Changes Will Impact Everyone. LINK:
http://www.fedsmith.com/articles/articles.showarticle.db.php?intArticleID=394
* UK mulls tax changes to shield revenues from EU. LINK:
http://news.ft.com/cms/s/220b44d8-4707-11d9-b099-00000e2511c8.html
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LINK: http://www.agora-inc.com/reports/SVS/WSVSEBFF/
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
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