Tag Archives: criminal

THE BANKING PASSPORT

In the course of writing The Passport Report, we interviewed lawyers who used the term “Banking Passport“. Until then, we had never heard of it. But after our initial rejection of the concept as something possibly illegal, we have had a change of thinking. Especially for people who live in unfree countries, the concept of having a second Banking Passport now seems quite reasonable.

For example:
Let’s say that Mr Smith is a citizen of the UNITED STATES OF ARRESTIA. As you know, ARRESTIA, hereafter called US, or “A” for short, has all sorts of currency laws and restrictions. “A” makes the unreported transfer of cash abroad a major felony-crime of “money-laundering”, punishable by 25 years in the pokey. It makes having a secret account abroad to preserve assets against government confiscation (by inflation or otherwise) a crime. Incredibly, failure to file detailed reports of all activities four times a year and pay one- third or more of your income to “the State” is also a crime. One can file all these reports and pay, but such disclosure defeats the whole purpose of most Arrestians to have a nest-egg that is judgment proof, and above all, government proof. There are persistent rumors that the US will follow the example of its mentor Russia and simply declare all banknotes over $20 to be null and void because cash is something only used by criminals and drug dealers. Confiscation of private property is the logical solution of bureau-rats to all conceivable civic problems. In our example, Mr Smith is an Arrestian who has wangled the right to travel abroad freely. He also makes an occasional deal where profits could be paid into a foreign account. He would probably be glad to pay a reasonable tax on such profits. But if he did pay a tax and revealed the nature of his foreign business (or publicly reported where he keeps his assets), he would never have anything squirrelled away for emergencies or retirement. So he stashes his cash and unwillingly accepts the risk of being a “criminal” by depositing his wealth outside of US. Thus, Smith wants to be low profile.
Offshore Financial Advisers” tell Mr Smith that he can control, yet conceal, secret assets by means of trusts, holding companies, Foundations, and other expensive legal enitities requiring annual costs of £2000 or more to set up, and at least £1000 per annum for care and feeding. The disadvantage of such arrangements (necessary for active businesses, in our opinion, but a waste of money for mere asset management) is that not reporting such activities is illegal anyway. To make things worse, with offshore trusts or other vehicles:
A)    Someone else knows your business! Those persons are not necessarily: i) Discreet ii) Honest, nor iii) Cheap to feed.
B)    Your advisers (or new partners in crime) will say they “need” to be able to sign checks (to insulate you, they say) and control your funds. But all too often the adviser:
i) Makes bad business decisions, ii) Makes mistakes, iii) Is not available when you need him, iv) Steals, or at best, v) Gets into difficulties unrelated to you and to save his hide, gives you up. You can’t sue anyone for telling your secrets without stirring up an even bigger can of worms!