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Freedom, Privacy and Prosperity in the Offshore World
Don't Mess with the Well-Traveled Lawyer
December 27, 2006


The
            Sovereign Society Offshore A-Letter

 


Thursday, December 28, 2006
Vol. 8 No. 258
In Today's Letter:
Comment: Don't Mess with the Well-Traveled Lawyer
Sneak Peek: Become Your Own Insurance Agent
Privacy: What to Do When So-called "Friends" Email You
Don't Mess with the
Well-Traveled Lawyer

Dear A-Letter Reader:

As you can imagine, the pages of my U.S. passport are filled with official customs and immigration stamps from many nations.

Traveling thousands of miles each year to Europe, Asia, and Latin America, occasionally I run into folks like the Canadian customs officer in Vancouver who examined my well-traveled passport and sneered: "You travel an awful lot - why?" Fixing his eyes with mine own, I replied in my best courtroom voice: "Because I'm a lawyer." "Oh!" he exclaimed. Then he stamped my passport and waived me on. No need to tangle with a lawyer.

Comes word last week from official Washington that American travelers flying to nearby locations across the border will soon need passports to do so. Up until recently a motor vehicle operator's license or other photo ID has been sufficient. But beginning on Jan. 23, 2007, U.S. citizens leaving or entering the country from airports in Canada, Bermuda, Mexico, Panama and South and Central America will have to present valid U.S. passports in order to be allowed back into the U.S. (Land and sea travel will be included as early as Jan. 1, 2008).

Supposedly this is a security measure recommended by the 9/11 Commission. But exactly how this added inconvenience will bar terrorists is unclear. Some of the 9/11 hijackers used falsified passports to enter the country, but others had valid U.S. visas.

I believe this latest intrusion on our right to travel is yet another way that Big Brother keeps tabs on where we are and what we are doing.

In various ways, government increasingly uses issuance of a passport to their citizens as a means of coercion. In the U.S., for example, a citizen can be denied a passport simply for being in debt to the Internal Revenue Service, because of other problems with federal government agencies or because they are behind in excess of $2,500 in payments for court ordered child support.

Since 1986, the U.S. State Department has been informing the IRS of all persons who renew their U.S. passports using a foreign address. I wonder why? Since passport renewals require an applicant's Social Security number, this is also used by the IRS to see if applicants have filed income tax returns. An IRS official speaking in Zurich said a special effort was made by the agency to track all U.S. citizens who renewed U.S. passports while living in Switzerland, for reasons we can surely guess.

There is a growing tendency in leading countries to follow the unfortunate lead of the United States in taxing non-resident citizens. Alternative citizenship is, therefore, increasingly important as a powerful tool for your international tax planning. As a dual national of two different countries, you also can enjoy added privacy in your banking and investment activities.

There are other immediate threats from government. Depending on your nation's policies, your government may use your passport to restrict your basic human right to travel, rather than to guarantee it. Use of your passport can be made contingent on payment of your taxes, however unreasonable, and on reporting of worldwide income and assets. Issuance of your passport allows your government to control, restrict, monitor, and record your travels.
  
Now you can understand why a second passport can be highly useful. When you qualify for a second nation's passport, one that comes with no restrictive strings attached, that document can serve as your passport to a new freedom. It can be your key to a whole new world of free movement, expanded international investment, greater flexibility, and adventure. I suggest you check out the possibilities now, as restrictions on Americans' right to travel continue to tighten.

That's the way that it looks from here.
 
BOB BAUMAN, Editor

 


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Sneak-Peek

Become Your Own Insurance Agent and Slash Your Premiums

If you are like most people, this may be the first time you've ever heard about captive insurance. Let's face it, researching various insurance options is not enjoyable, but it's smart.

As the old saying goes, the best offense is a good defense...and that's exactly what captive insurance can offer.

Just ask the gas station owner who saved $400,000 in annual insurance costs through captive insurance. Mr. Jones (a pseudonym) owns a chain of more than two dozen gas stations in the northeast. While gas stations may seem like a simple business, they can be very costly to insure. Underground storage tanks have to be designed and installed to rigorous standards... since the slightest leak and spark could have disastrous consequences.

Mr. Jones faced these insurance challenges until he became acquainted with the benefits of captive insurance. And he's not the only one. Waste management companies regularly use captive insurance and even religious organizations have taken advantage of a captive's benefits like lower costs and better coverage.

Captive insurance is provided by an insurance company that is created by and whose business is primarily supplied by, and controlled by, its owners who are also the insured parties. Plus, the original insured parties are also the principal beneficiaries. The people/practices that the captive insurance company covers have direct involvement and influence over the insurance company's operations - including underwriting, claims management policy and investment. So, in essence, you become your own insurance agent and control your own insurance company.

There are some very real benefits to running a properly established and well managed captive insurance company. Here are a few highlights:

• Lower Costs: Captives offer lower premiums, which in turn lowers overhead and operating costs. You save money because there is no need for the captive to charge marketing, sales or commission costs like a commercial insurance company would.

• Greater Profits: Insurance premiums paid into the captive insurance company can be
retained, managed and invested by the associated members. It allows you (as the principal of the insurance company) to make money off of your insurance premiums.

• Better Risk Management: A captive insurance company can provide more effective risk and claim management coverage because it is tailored to your company or group needs...while giving you increased control and liquidity.

• Reinsurance: You can save even more in premium costs by reinsuring the captive, thus allowing you to spread the risk across other re-insurance companies and draw on pooled assets.

• Tax Benefits: The U.S. government gives insurance companies special tax benefits. In essence, a captive can be a giant, self-directed, no penalty IRA.

ERIKA NOLAN, Executive Director

P.S. Welcome back to Sneak Peek Week! Today's special introduction to captive insurance first appeared in Bob Bauman's Captive Insurance Report. Learn more about becoming your own insurance agent.


Privacy&Rights

Your Email Inbox is Under Attack... How to Fight Back

You may have noticed in recent months that you have some new friends. In fact, a lot of new friends. 

Just this morning, in my email inbox, I had messages from Jamie, Wray, and several other new "friends." All of them were giving me a hot tip on a stock that was in a "booming sector" and which had "just begun a PR blitz."

That was in addition, of course, to the usual invitations to enlarge certain parts of my body, shrink others, to buy software at dirt-cheap prices, obtain prescription drugs without a prescription, etc.

Indeed, I receive about 500 email messages daily, with about 90% of them being unsolicited advertising or "spam" messages. That's about double the amount I was receiving only a few months ago.

What's going on? It turns out spam merchants have found new and creative ways of delivering their messages. And because it costs only a fraction of a cent to generate a spam message to an inbox, if only a few people out of millions respond, spammers make money. And yes, while sending spam is illegal in most major countries, it's easy to disguise the origin of an email message. Indeed, I regularly receive spam purporting to come from my own email address at assetpro@nestmann.com!

One of the most effective ways spammers have discovered to deliver their message is to include it in an image. That fools anti-spam software that looks for telltale phrases.  Image spam has increased 400% since 2005, according to anti-spam company Ironport, and now represents 25%-45% of all junk e-mail.

Another way spammers have foiled countermeasures is by planting "Trojan Horse" software on millions of computers, essentially taking them over and converting them into spam generators, without the knowledge of their owners. Secure Computing, another anti-spam company, says that 250,000 new computers are added to these spam "botnets" daily.

What can you do to take back control of your in-box? Here are a few suggestions:

  • Use up-to-date anti-virus and firewall software. Your Internet Service Provider probably already has sophisticated anti-spam filters installed, but some spam will inevitably still find its way to your inbox. And a lot of it will contain viruses or Trojan Horses that could damage your computer, or more ominously, take it over and convert it into a spam generator. Continuously updated anti-spam and firewall software can reduce the risk of viral attack and in the event of an attack prevent loss of data. I use EZ Anti-Virus (http://www.ca.com ) and ZoneAlarm (http://www.zonealarm.com ) although there are many other suitable offerings.

     

  • Don't open suspect emails. Some viruses and Trojan Horses can launch themselves simply by opening or even previewing the message. To be safe, don't open suspect messages, and turn off the "preview pane" in your email program

     

  • Avoid "pfishing" scams. In a pfishing scam, you receive a bogus e-mail, allegedly from a bank or online merchant. The message contains a link routing you to an authentic-looking, but phony, website where you're asked to enter sensitive information such as your password, your Social Security number, etc. This gives the fraudster enough information available to steal your identity or drain your account.

To protect yourself, NEVER respond to an unsolicited email by entering personal information into an online form. If you're not sure, call the company sending you the e-mail. Don't call any number listed in the email, either. These are often fake listings. Instead, call the number on any statement the company has sent you, or look it up.

MARK NESTMANN, Privacy Expert &
President of The Nestmann Group
www.nestmann.com

P.S. Check out my article in the newly released January edition of The Sovereign Individual for more tricks about how to keep your phone calls, email, and bank records safe from fraudsters. Don't receive The Sovereign Individual? Order your risk-free subscription here. (Consider it a late holiday gift to yourself.)


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