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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Prosperity & Privacy in the Offshore World Tuesday, December 3, 2002 - Vol. 4 No. 126
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In This Issue:
* COMMENT: A Glimmer of Hope
* OFFSHORE: Switzerland in the News. UK Labour Hits the Rich. Irish Tax Hounds. EU Prods Gibraltar. Monaco for millionaires
* WEALTH: EU savings tax. Economic growth is the answer. Digital piracy in China. British "no" to euro. Singapore and socialism
* PRIVACY & RIGHTS: US police want more. Canadian medical
database. Ireland to store data. Total information awareness.
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Our Guest Comment is by MARK NESTMANN, Sovereign Society editorial director and a leading expert on privacy. --Bob Bauman, A-Letter Editor, The Sovereign Society
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COMMENT: A Glimmer of Hope
Dear A-Letter Reader:
In the April 17, 2002 A-Letter, I wrote about an obscure type of treaty called a "MLAT," or Mutual Legal Assistance Treaty. MLATs give governments the right to gather evidence and seize assets without a judicial hearing and in some cases, with no right of appeal to any court. The treaties essentially override all confidentiality laws that might otherwise apply. And their one-sidedness is an invitation to serious abuse.
The US has more than 50 MLATs in effect, more than any other country. Since the first MLAT came into effect in 1977, they have been used to gather evidence in hundreds of cases and to seize billions of dollars in alleged criminal assets.
But thanks to a mostly-overlooked decision by the Supreme Court of British Columbia, abuses by US agents using MLATs may be severely
curtailed.
In this case, Chief Justice Bruce COHEN, writing for the court, denied a request for information via the US-Canada MLAT due to a finding of "abuse of process" by the IRS in connection with efforts to obtain records relating to alleged tax offenses. It ordered that records seized by the IRS in a search of the Vancouver offices of offshore promoter Jerome SCHNEIDER be returned to Schneider's possession.
This is an important case, and not only due of the notoriety of Schneider, who for more than 20 years has promoted the use of private banks in offshore jurisdictions to supposedly shelter income from tax. According to international tax attorney Bruce ZAGARIS, it is a setback to the United States, because, "The case shows the ability or targeted persons to raise constitutional and other legal issues, even though new US-MLATs expressly state that MLATs are between the treaty states only and do not give rise to any rights of the investigated, defendants or third parties." (International Enforcement Law Reporter, October 2002).
This decision is a glimmer of hope for anyone concerned about the proliferation of unconstitutional treaties between the US and other countries that purport to eliminate the constitutional rights of investigative targets..
And for that, we ironically must give credit to another country. Thank you, Judge Cohen.
That's the way that it looks from here.
Mark Nestmann
P.S. Even if you think you've made yourself judgment-proof by placing your assets offshore, if the government wants them, MLATs make them uniquely vulnerable. My newly updated report on MLATs lists all US- MLATs now in effect, analyzes their impact on offshore investors and suggests practical strategies to deal with them. To learn more, just click on:
LINK: http://www.agora-inc.com/reports/190SMNML/W190CB47/
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* COMMENT LINKS:
* US vs. Schneider (Supreme Court of British Columbia). LINK:
http://www.courts.gov.bc.ca/jdb-txt/sc/02/10/2002bcsc1014.htm
* Linking MLATs to tax collection hinders fight against crime. LINK:
http://www.freedomandprosperity.org/ltr/president1/president1.shtml
* Canadian MLATs. LINK: http://www.oas.org/juridico/MLA/en/can
* Bruce Zagaris' International Enforcement Law Reporter newsletter.
LINK: www.ielr.com
* Mark Nestmann's web site. LINK: http://www.nestmann.com
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* OFFSHORE *
SWITZERLAND IN THE NEWS:
* EU compromises with Swiss on interest withholding tax; Swiss
preserve bank secrecy. LINK:
http://www.swissinfo.org/sen/Swissinfo.html?siteSect=
111&sid=1481828
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* Swiss private banks declining fast, many fighting to survive. LINK:
http://www.commentwire.com/commwire_story.asp?comm
entwire_ID=3783
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* US fines Swiss banks millions for misleading investors: LINKS:
http://www.swissinfo.org/sen/swissinfo.html?siteSec
t=105&sid=1478207
http://www.swissinfo.org/sen/Swissinfo.html?siteSect=113&
sid=1483971
* Swiss turn over Salinas files to Mexico. LINK:
http://www.newsday.com/news/nationworld/world/wire/s
ns-ap-switzerland-mexicosalinas1127nov27,0,3083560.story?
coll=sns-ap-world-headlines
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BRITISH LABOUR CLAMPS DOWN ON RICH
LONDON: New budget aims to end the tax break for foreigners living
but not domiciled in the UK. LINK:
http://ftyourmoney.ft.com/servlet/ContentServer?pa
gename=FT/FTym/FTyourmoney
Render&c=StoryFTYM&cid=1037872351993
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IRISH REVENUE EYES CHANNEL ISLANDS, ISLE OF MAN.
DUBLIN. Government seeks tax information exchange agreements
with British offshore havens to prevent tax evasion.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10103
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EU PRODS GIBRALTAR OVER TAX BREAKS
BRUSSELS: Continuing attack on the Rock's offshore financial
business.
LINKS: http://u.tv/newsroom/indepth.asp?pt=n&id=26105
http://www.tax-news.com/asp/story/story.asp?storyname=10113
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MONACO FOR MILLIONAIRES
Jaundiced view of "a rotten little retirement home for fat cats."
LINK:
http://www.spectator.co.uk/article.php3?table=old§ion=curren
t&issue=2002-11-30&id=2550
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* WEALTH *
EU MEMBERS FACE RENEWED PRESSURE ON SAVINGS TAX INITIATIVE.
BRUSSELS: Austria, Luxembourg and Belgium on the hot seat to end
bank secrecy in tax matters. LINKS:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/
StoryFT/FullStory&c=StoryFT&cid=
1037872480637&p=1012571727088
http://www.nytimes.com/financialtimes/international/FT1037872455975.html
* And now, the EU wants to end power of individual members to veto
EU tax policies. LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10130
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ECONOMIC GROWTH IS THE ANSWER TO TAX SHORTFALLS.
WASHINGTON: Lawrence KUDLOW argues that growth should be
the number-one priority of political leaders. LINK:
http://www.washtimes.com/commentary/20021126-7954010.htm
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DIGITAL PIRACY RAMPANT IN CHINA.
Not just music and movies, but sophisticated engineering programs. No action for fear of upsetting "delicate" US-China relationship.
LINK:
http://www.nytimes.com/2002/12/02/technology/02PIRA.html
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BRITISH TREASURY CASTS DOUBT ON UK'S ENTRY INTO THE EURO.
LONDON: Wisdom of fixed exchange rates questioned. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com
/StoryFT/FullStory&c=StoryFT&cid=1037872437833
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SINGAPORE AND SOCIALISM
What's the difference? One works; the other doesn't. LINK:
http://www.nbr.co.nz/home/column_article.asp?id=4518&cid=5&
cname=Asia
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* PRIVACY & RIGHTS *
POWER HUNGRY U.S. POLICE WANT MORE.
WASHINGTON: Cops want restrictions against abuse lifted. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A51934-2002Nov28.html
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MASSIVE CANADIAN MEDICAL DATABASE PROPOSED.
OTTAWA: Federal Privacy Commissioner RADWANSKI "terrified"
by proposal. LINK:
http://www.thestar.com/NASApp/cs/ContentServer?GXHC_gx_session_id_
=0cdeb2b92223d0ab&pagename=thestar
/Layout/Article_Type1&c=Article&cid=1035774937686&call_page=TS_Ne
ws&call_pageid=968332188492&call_pagepath
=News/News
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IRELAND TO STORE DATA.
DUBLIN: Detailed personal data on every citizen's phone and mobile
calls, faxes, and e-mail and Internet usage will be retained for up to
four years under a new "Justice" bill. LINK:
http://www.ireland.com/newspaper/front/2002/1128/901350883HM1TECH.html
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A HUMOROUS TAKE ON "TOTAL INFORMATION AWARENESS." LINK:
http://www.salon.com/politics/comics/2002/11/28/tia/index.html
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