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The point is, by moving assets offshore, you regain control. Within the
United States, you must play according to federal rules — rules that
get a little less citizen-oriented every year. Offshore, there are
entire jurisdictions organized to play by your rules. You design the
game, and you get to be the winner
There are major concerns concerning privacy. You will hear a
staggering number of horror stories from people whose lives have been
indelibly marked by corporate and governmental intrusion.
If you're like many Americans, you probably assume that the
Constitution ensures your unalienable right to privacy. Unfortunately,
you're wrong. The Fourth Amendment — the national guarantee most often
cited when people talk about confidentiality — specifies only that "the
right of the people to be secure in their persons, houses, papers, and
effects against unreasonable searches and seizures shall not be
violated and no warrants shall issue, but upon probable cause...."
The men of 1787 who drafted this legal tenet clearly meant to protect
privacy as it pertained to property. They wanted a right to
unthreatened ownership of land and personal possession. Our founding
fathers lived in a world where people shared common norms of morality.
They didn't need to sort through the questions that plague a global
information-service economy. They didn't need to worry about how one
man might decide to use (or share) private financial information about
another. They didn't foresee an era in which sophisticated
communication systems could instantaneously interact, calling up,
comparing and exchanging information about you or me within a matter of
several seconds.
In other words, they didn't foresee the 21st century post 9 /11.
Today, the greatest threat to your individual privacy has nothing to do
with property theft.
It has to do with access to information
about you and your activities. Where you live and work, the names of
your children, your medical and psychiatric history, your arrest
record, the phone numbers you dial, the amount of money you earn, the
way you earn it, and how you report it to Uncle Sam after if s yours —
these are the information tidbits that will undoubtedly remain stored
in lots of different places as long as you keep your money within U.S.
borders.
An offshore financial involvement offers youand your family the
one and only escape from this government-endorsed conspiracy. Just as
you can legitimately make more money oversees than you could ever hope
to earn in this country, you can also look forward to enjoying your
foreign profits in an atmosphere of complete confidentiality. In money
havens scattered from Hong Kong west to Aruba and south to the
Netherlands Antilles, you can benefit from iron-clad secrecy laws that
strictly forbid any bureaucratic review of your personal financial
records. That means you can legally guard your assets from the
overzealous inspection that has become part and parcel of U.S. banking
and investment portfolio management.
If you're like most
upper- and middle-income Americans, the federal government alone
maintains nearly 150 separate files on you. According to one recent
analysis, Uncle Sam currently has computer tabs on 10 billion files, a
virtual treasure trove through which an army of eager bureaucrats can
search and snoop. The state in which you reside probably holds another
dozen or so active computer files on you. And the Census Bureau
routinely updates its records. Any minute of any day, its computer
system can spit out your basic data: sex, race, ethnic origin, marital
status, employment situation and place in the household pecking order.
Most important, it can legally pass any or all of that information
along to other interested branches of government.
Then, of course, there's the Internal Revenue Service. The IRS knows
how much money you make, and where it comes from. The Social Security
Administration probably knows more than you do about your employment
earnings history. If you served in the armed forces, you're permanently
listed in the archives of the Veterans Administration as well as your
service branch.
Are you a borrower? If so, then at least one credit bureau (and
probably several) keeps a file on you. Lenders nationwide can request
from any one of these independent business operations a slew of
information about your income, debts, employment history, marital
status, tax liens, judgments, arrests and convictions. .
Still another category of consumer investigation companies collect
information about the health habits and lifestyles of likely employment
and insurance applicants. How do these agencies get their information?
Mainly from the friends, neighbors, employers, landlords and other
casual professional associates of those they are investigating.
What does the law have to say about this blatant invasion of
privacy? What are your rights when it comes to keeping your financial
life confidential?
You don't have many. And the ones you do have are steadily
eroding. The bottom line is that while the U.S. Supreme Court has
recognized your constitutional right to privacy in some cases, it has
repeatedly failed to extend that right to "informational privacy." In
other words, you have very limited ability to curtail the collection,
exchange or use of information about you or your personal financial
situation.
There are, in fact, laws that authorize the invasion of your
privacy. One of them is The Bank Secrecy Act of 1970 (Public Law
91-508). Its name is a deceptive misnomer because instead of protecting
confidentiality, it gives our government outrageous authority to review
and investigate personal and business bank accounts. The law requires
all U.S. banks to maintain records of deposit slips and the front and
back of all checks drawn over $100. Since it would cost so much to keep
these records on hand, banks are allowed to routinely microfilm all
your checks — regardless of value. So they do. All of them!
The law also demands that banks maintain records of any credit
extension (other than a real estate mortgage) that exceeds $5,000.
Banks must report all cash transactions, deposits or withdrawals, in
excess of $10,000. They are required to ask you for your Social
Security number or taxpayer identification number before any new
checking or savings account can be opened. If you do not supply this
number within 45 days of the request, your name, address, and account
numbers are put on a list for inspection by the Treasury Department.
Even more to the point, you would wonder why any American with the
economic option of moving offshore and into an atmosphere of utter
financial privacy would chose to.
Better and there are plenty of foreign financial centers willing to make you an offer that's hard to refuse.
To ensure your own financial privacy, you must do two things.
First, you must minimize the amount of information that gets created
about you. Second, you need to verify and limit access to the
information that already exists.
That may sound like elementary advice, but remember, the experts
say that we ourselves provide government and private industry with most
of the data they maintain on us. In fact, one study concludes that more
than 72 percent of the time, investigators obtains their information
from the very people they are monitoring.
So, out of respect for the fact that you will probably want to
keep some portion of your assets within the United States, take a
minute and consider ways that you can protect yourself from unnecessary
invasion of privacy. Just to get you thinking along the right track,
here are some practical suggestions.
First, be aware that that not all domestic banks are alike. They
all fall under U.S. banking regulations, but some are more
privacy-oriented than others. For example, a number of financial
institutions have recently started photographing and fingerprinting
customers before completing even the most routine transactions. Don't
do business with that kind of place! Instead, look for a bank that's
willing to ensure the highest possible level of financial
confidentiality.
A good way to identify the right institution is to ask for a
written contract that sets down the ground rules for your professional
relationship. Make sure your contract includes at least these two
provisions: the bank must notify you whenever anyone asks to see your
records; and you reserve the right to periodically see and correct any
records the bank may keep on you.
A second rule of thumb is to conduct low-profile banking. Think
about it. By reviewing nothing more than your monthly checking account
statement, an investigating agent could learn a lot about you — where
you shop, the restaurants you frequent, the names of friends and
relatives, your religious and political affiliations, even the private
clubs at which you have a membership. In essence, the account provides
a panoramic view of your everyday lifestyle.
You should aim to reduce the clarity of that view. For instance,
use your checking account for only ordinary, everyday expenses —
mortgage or rent payments, utility bills, car loans. Then, for more
sensitive purchases, open and maintain a second account — preferably
offshore. Better yet, handle these through a registered trade name.
Simply set-up a company and conduct your discreet transactions through
its checking account. It's easy to implement this strategy. Your
business must be registered, of course, either at the county or state
level (or both). It's perfectly legal as long as you register it and
use it without intent to defraud, and it will give you a flexible,
low-key way to legitimately preserve your privacy.
To keep a low profile, you should probably avoid the wide array of
privacy-insurance gimmicks that are around these days. Ultimately,
things like invisible ink (meant to protect your checks from the bank's
photocopy machine) and red checks (again, intended to limit
reproduction) are only going to work against you because they bring
attention to you and your account. That's not your goal. You want to
preserve privacy, so, you must try to blend in, become invisible within
a system that constantly searches for the slightest deviation from
routine procedure.
When it comes to investments, be forewarned that some — like
interest on bank accounts and dividends from a brokerage account — are
automatically reported to the government. Others are known only to
brokers, bankers, and fund managers. Still others are not reported to
anyone. Within this last (and most appealing) category, there are a
number of sub-divisions. For example, information about your commodity
futures, options, and non-dividend-paying stocks must be made available
for disclosure, but only if someone asks for it. Data relevant to a
foreign bank account is reportable to the government, but you are the
one who reports it. And investments such as municipal bonds, gold and
silver, foreign currency, diamonds, art and other collectibles are not
reportable to anyone, not necessarily known to anyone, and not
available for disclosure until the investment is sold.
Again when it comes to investment, consider the benefits of
working through a registered trade name. Brokerage firms accept
corporate accounts, and these accounts are used by individuals as well
as by large corporations. A professional corporation can trade under
its own name, and if titled properly, will ensure the anonymity of the
real owner. You should know that your privacy is maintained only at the
trading level. Outsiders can still gain access if the brokerage firm
chooses to reveal the true owner.
To maintain financial and personal privacy in your correspondence,
consider renting a post office box. This, together with a registered
trade name, can do a lot to ensure at least a significant amount of
confidentiality.
Finally, keep tabs on your credit records. There are about two
thousand separate credit bureaus in this country, and they all carry
data that could potentially be used against you. Under the Fair Credit
Reporting Act, you can demand to know what is in your file. If you
disagree with any of the information you find in it, you can insist
that another investigation be done. If that second go-around doesn't
resolve the matter, you can enter your own statement of explanation as
a permanent part of the credit file.
Within the United States, it's possible to work like a dog,
diligently and ferociously safeguarding the limited privacy that our
legal system still allows. Frankly, the incredibly rich don't need to
bother. They're already protected by sophisticated investment plans —
usually they include offshore involvements. The very poor don't make
much effort either. They're too busy making ends meet, and Uncle Sam
isn't vigorous in pursuit of information about them. They don't have
enough money to make it worth his while. Finally, of course, there are
the very crooked. They don't spend time protecting a legal right to
privacy because illegal activity keeps them pretty well-occupied and
camouflaged.
That still leaves a lot of people. People like you whose level of
success makes them aware of how the government systematically deprives
them of personal financial privacy but who hesitate to take any drastic
action.
. By moving a portion of your money offshore, you can give yourself an
immediate escape valve. You can stop chasing that elusive goal of
onshore privacy, and in the process, you can walk away from the
frustration and aggravation that are part of that quest.
You can find out what life is like on the other side of excessive
government regulation and bureaucratic red tape. You can, for the first
time in your life, discover what true financial freedom feels like.
If you want to design an international investment plan that's
tailored to your specific needs, you must establish a one-on-one,
professional relationship with an experienced offshore financial
consultant. When it comes to structuring a foreign involvement that's
sensitive to your genuine concerns about privacy, the same advice holds
true.
Nevertheless, there are four basic privacy benefits that apply to
almost every offshore venture and can be, implemented in virtually any
foreign financial center.
Domestic banks are in bad shape — worse shape, in fact, than most
foreign banks. More banks failed in last number of years than at any
other time since the depths of the Great Depression. Of course, your
money is insured by the FDIC, but what would happen in the event of a
universal banking crisis? Federal agencies could never handle the
massive run on banks that would ensue. Having some money tucked away,
in a safe and secure foreign account may be just
Remember, too, that in times of trouble, governments tend to
persecute the financially independent by means of price controls,
rationing, foreign-exchange controls, prohibition of foreign accounts,
confiscation of property, and high taxes. War, and sometimes just the
threat of war, can bring with it the sting of government restrictions.
History has also taught that discrimination can rise up and attack
even the powerful within a society. At various times, in various
places, Jews, Blacks, Asians, Protestants, Catholics and many others
have been singled out for disdain. Unfortunately, governments are not
immune to their own prejudice. Under federal authority, people around
the world have had their property taken away. Sometimes they have also
been imprisoned and even killed.
That's why smart investors living in politically and socially
explosive countries often keep the bulk of their money offshore.
Overriding (and rational) fears of government expropriation push them
into a no-choice position. As Americans, we can be far less fearful.
Nevertheless, there is growing concern about creeping federal authority
over individual economic liberty. As a result, quiet transfers of money
and assets have become common.
If the essence of financial privacy means limiting the information
that is available about you, then it seems wise to act before the fact.
Don't wait until a period of unrest brings you and your assets under
federal scrutiny. By then, it will be too late. You won't be able to
protect what you've got because Uncle Sam will probably decide to
"protect" it for you.
If you have the proper government credentials and just $ 150, you
can gather the following information and material on just about anyone:
checks (both front and back copies), bank statements, signature cards,
loan applications, deposit and withdrawal slips, and all bank
communications. Even more to the point, you can get it without your
suspect ever knowing about the probe.
Domestic banks typically release records in the event of civil
litigation, court proceedings, and in some IRS audits. A private
foreign bank, on the other hand, can protect you from any such
invasion. By owning your own offshore bank, for instance, you ensure
that all your financial decisions (and the papers that authorize them)
are beyond the reach of domestic rules and regulations. Provided your
dealings are structured as bank transactions rather than as individual
or corporate ones, Uncle Sam has limited authority over the size or
frequency of your transactions.
One of the most important privacy benefits you get from an
offshore involvement is protection against overly aggressive
competitors. Countless fights have taken place in U.S. courtrooms, many
of them involving large sums of money and vengeful antagonists. The
inclination to sue at the least provocation is on the verge of becoming
an epidemic. And the likeliest targets are the people with the most
money.
Let's say you become involved in a business situation that
ultimately leads to a lawsuit. If you bank within the United States, a
court may award your competitor legal access to any or all of your
financial records. In the process, your privacy may be seriously
jeopardized. If, however, your records are kept offshore, they are
impervious to court orders.
Another important benefit involves the right to maintain a healthy
distance between creative ideas and your competitors. For example,
let's say you have a formula or patent that you want to protect. If you
decide to copyright the idea here, you must disclose it to the
Copyright Office, Immediately; your million-dollar concept becomes part
of the public domain. Before you have time to establish a firm market,
the idea can be reformulated with minor revisions and translated into
your strongest competition.
Instead of going to the appropriate onshore office to file your
formula, why not convert it into financial information? Call it "the
exhibit to an agreement between a scientist and the formula's owner."
If the formula's owner just happens to be an offshore entity, the
exhibit is likely to be protected under the bank secrecy laws of the
foreign jurisdiction.
Have you ever been the target of ugly gossip or intentional
misinformation? It's sometimes based on nothing — just lies and
innuendo. Other times, the story has a kernel (or more) of truth. And
that's even more difficult to handle.
Most of us have a few skeletons in our closet. When it comes to
financial privacy, however, those bones take on particularly ghoulish
contour. Past mistakes — from car repossession to a personal
bankruptcy, draft evasion, or a minor criminal record — can haunt you
for a very long time. Credit bureaus maintain all their information for
at least seven years; and often for even longer.
The truth is, we do not live in a perfect world. People do not dismiss
the past from the present. They are not willing to judge associates
only on the grounds of firsthand experience. If, for whatever reason,
you are interested in separating your past from you present,
Financial privacy is a must. You will never have it within the
domestic financial environment. Offshore centers, however, can
guarantee that today is what matters. Yesterday is essentially
irrelevant.
There is a more subtle concern that some people have about
separating their personal identities. Even if they have no past mistake
to hide, they want (and need) to make a clear distinction between
various current financial involvements. For example, doctors have a
very particular professional image in this society. To protect their
medical practice they must appear above and beyond many of the
investment projects that the rest of us can implement.
What would you think of a doctor who decided to invest in a bar?
Probably not much. Yet he has every right to experiment with profitable
ventures. By handling his affairs offshore, he can keep a desirable
distance between his Manhattan medical practice and his Miami Beach bar
and grill.
Privacy is a relative concern. It can mean virtually nothing to
one person while it means everything to the next. Only hermits know
complete confidentiality, and they pay a high price for it. They're
isolated from everything. Nobody knows anything about them but, then,
they don't know about anybody or anything.
Most of us don't want privacy when it costs that much. At the same
time, very few of us want to just hand-over the details of our
financial lives to the government. Instead, we want some middle-ground,
some halfway point between hyper-sensitive secrecy and flagrant
economic exposure.
Offshore banking can help you regain control your personal and financial privacy.
It is an option in the post 9 /11 era that you should take
seriously for yourself and your family’s financial and personal privacy.
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