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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, October 15, 2003 - Vol. 5 No. 122
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In This Issue:
* COMMENT: The Fear Factor.
* OFFSHORE: Cook Islands May End Tax Haven Status. Australia Eyes Pacific Island Problems. Monaco Football Issue. Chechnya a Haven?
* WEALTH: U.S. Dollar Devaluation, Controls? Color of Money. Russia Abandons $ for Oil, Gas. Wealthy Chinese Hide. Aussie Taxes. DeLoitte in Another Scandal. U.S. Corporate Tax Breaks.
* PRIVACY & RIGHTS: E.U. Plans Wiretaps. U.S. Tenants Privacy.
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Guest Comment is co-authored by David MELNIK, QC, a leading Canadian attorney and a member of The Sovereign Society's Council of Experts, and Anthony J. LANGFORD, a wealth preservation consultant based in Texas.
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COMMENT: The Fear Factor.
Dear A-Letter Reader:
"Going offshore" presents challenges including distance, time zones, long distance communication, differing brokerage services and multiple choices from a world of new investment opportunities. Then too, foreigners accomplish financial objectives differently than do their North American counterparts. History, tradition and local laws ensure such differences wont end any time soon.
But the biggest obstacle to many people considering going offshore financially is the fear factor.
Fear actually can be a good thing. We often say "Don't let greed overtake fear." Yet misplaced fear can lead to financial ruin. And the leading concerns prospective offshore investors have is that their money will "disappear" into the pockets of a dishonest bank or financial advisor. Or that the IRS will target them for investigation.
Neither fear should be an obstacle. Banks and financial advisors in reputable offshore havens are just as strictly regulated as they are in the US and Canada -- often more so. So long as you report income to your tax authorities you have no reason to fear investigation.
The real question is how to deploy your capital. You shouldn't let your cash sit in a bank account earning little or no interest. Your investment objective should be consistent return with minimum risk.
You can manage your own offshore investments, but many prefer to hire a professional wealth manager. If so, interview your potential manager in person. Personality, compatibility and competence are all essential elements in an investment advisor. Ask detailed questions and demand precise answers. Check out a prospective advisor for pending legal actions and ask for bank and legal references, then follow up.
Here what you need to know before you agree to hire an advisor:
1. The net profit or loss track record for clients, for each of the past 5 years, after all costs were deducted.
2. Academic and professional credentials and proof of past experience as an investment manager.
3. Possible fees, expenses or other charges that may be deducted from your earnings account.
4. Whether the manager has direct access to client funds or does he hold a "power of attorney" to trade on a client's behalf.
5. Will one client's funds be commingled with other clients' funds.
6. In case of the investment firm's insolvency, will its creditors have any claim against client funds?
7. If I were to invest with you today, how would you deploy my funds?
8. How frequently do you communicate with your clients?
9. If I'm not happy with your performance, how can I retrieve my investment and how long will this take?
If, after asking these questions, you feel of any trepidation, keep looking for a manager. Unless you are completely satisfied, hold on to your money.
David Melnik, Q.C. (E-mail: dm1976cp@netcom.ca)
Anthony Langford (E-mail: anthonylangford@mailcity.com)
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EDITOR'S COMMENT: If you want to know more about offshore
investing, consider joining the Sovereign Society. Click here:
LINK: http://www.agora-inc.com/reports/SVS/WSVSD405/
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* OFFSHORE *
COOK ISLANDS MAY END TAX HAVEN STATUS
RAROTONGA, C.I. Initial reports are unclear, but it appears that the
Cook Islands, long an established tax and asset privacy haven, may
end that status by June 2004. We will report more on this later.
LINKS: http://www.smh.com.au/articles/2003/10/14/1065917393787.html
http://sify.com/news/politics/fullstory.php?id=13283506
* Growth forecast for Cook Islands in 2004. LINK:
http://www.abc.net.au/ra/newstories/RANewsStories_964370.htm
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AUSTRALIA EYES PACIFIC ISLAND PROBLEMS
CANBERRA: Australia will not stand back and watch its Pacific
neighbors descend into instability Foreign Minister says.
LINK: http://www.theage.com.au/articles/2003/10/14/1065917417858.html
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MONACO HAVEN BECOMES SPORTS ISSUE
French football teams feel Monaco's football team has a major
advantage because of the tax haven's strict financial secrecy.
LINK: http://www2.sbs.com.au/home/index.php3?id=39386
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IS THIS A JOKE?
CHECHNYA might become an offshore center? Are they kidding?
LINK: http://www.russiajournal.com/news/cnews-article.shtml?nd=40840
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* WEALTH *
U.S. CURRENCY DEVALUATION, CONTROLS?
One man's opinion is that newly designed US paper money may
lead to currency controls and devaluation. LINK:
http://www.321gold.com/editorials/droke/droke100903_currency.html
* The New Color of US Money.
LINK: http://www.moneyfactory.com/newmoney/
* The Federal Reserve on the new money. LINK:
http://www.federalreserve.gov/boarddocs/press/other/2003/200310092/default.htm
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RUSSIA ABANDONS OIL PRICING IN U.S. DOLLARS
MOSCOW: Huge gas and oil exports will be priced in euros. LINK:
http://www.money.telegraph.co.uk/money/main.jhtml?xml=/money/2003/10/10/cnoil10.xml&menuId=242&sSheet=/money/2003/10/10/ixfrontcity.html
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CHINA'S WEALTHY DON'T WANT PUBLICITY
A quarter of China's 100 richest people come from Guangdong, but many
are reluctant to be named; they see that as a "kiss of death." LINK:
http://www.thestandard.com.hk/thestandard/news_detail_frame.cfm?articleid=42531&intcatid=2
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AUSTRALIAN TAX COLLECTORS CRACK DOWN
New report highlights the black market economy. LINK:
http://www.theage.com.au/articles/2003/10/12/1065917274577.html
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DELOITTE INVOLVED IN MAJOR U.S. INSURANCE FAILURE
Big Four firm accounting firm DeLoitte allegedly contributed to the
largest insurance company failure in the United States. LINK:
http://www.pittsburghlive.com/x/tribune-review/business/s_159795.html
* U.S., European Union move closer on auditing procedures. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480562539
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MAJOR U.S. CORPORATE TAX BREAKS CONSIDERED
Congress Weighs Corporate Tax Breaks. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A21513-2003Oct13.html
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* PRIVACY & RIGHTS *
EUROPEAN UNION PLANS DUTCH WIRETAPS
EU goes to the experts to tap your e-mail.
LINK: http://www.theinquirer.net/?article=11946
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U.S TENANT PRIVACY NON-EXISTENT
Landlords tap into multiple data bases on new tenants;
when the credit check is only the start
LINK: http://www.nytimes.com/2003/10/12/realestate/12COV.html
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
Bob Bauman, Editor * Daniel Aponte, Jr. Research Asst.
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