Showing posts from November, 2013

The weak link - Cleaning up trusts and similar entities will hurt money-launderers, but it will need a lot of political will

WHEN Mark Morris, a Zurich-based tax consultant with a conscience, requested a meeting with the European Commission to explain the many devious ways in which tax evaders were using shell companies and other vehicles, a bored official offered him 20 minutes. “Once I started describing all the loopholes,” Mr Morris recalls, “his eyes lit up. Two hours later he was still listening, scribbling furiously.”

Only a fool holds dirty money in his own name these days. Anyone in the know tries to conceal ownership through labyrinthine combinations of anonymous shell companies and arrangements such as trusts and foundations. Campaigners have worked hard to expose the extent of this “layering”, helping to push corporate transparency up political agendas. G8 countries backed mandatory registration of real, or “beneficial”, owners at their summit in Northern Ire…

FATCA and Trinidad

Earlier this month, there was an article on FATCA in the Trinidad Express extensively quoting a local attorney named David West.  Mr West is the former Head of the Central Authority Unit and a certified anti-money laundering specialist who went on to call on those drafting the Inter-Governmental Agreement (IGA) with the US to ensure that reciprocity is part of the arrangement.  That is to say, if financial institutions based in Trinidad and Tobago must report the financial activity of certain US persons to the IRS, US based financial institutions must report the activity of certain Trinidad and Tobago persons to the government of Trinidad and Tobago.
Mr West makes a very good point and appears to have a better grasp of FATCA than others.  Here I am thinking about the opening remarks of the Governor of the Central Bank of Trinidad and Tobago at the meeting of the Council of Securities Regulators of the Americas (COSRA) in October 2012.  The Governor in his wisdom, concluded that “ther…

FBAR Penalties

Effective July 1, 2013, FBARs must be filed electronically using the E-Filing System maintained by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). 

This mandatory electronic filing requirement applies to all FBARs, and to amendments of previously filed FBARs, that are submitted by individuals or by entities on or after the effective date.

“Quick Reference Guide to International Penalties”


Should You Opt Out Of IRS Offshore Amnesty?

Since 2009, many U.S. persons with foreign accounts and income have sought shelter from the IRS onslaught. Not everyone has entered the IRS voluntary disclosure program. Still, it can be the safest move and the only one guaranteeing no prosecution. You may fear that if you don't enter the program, you might be caught and it will be too late to get the program's formulaic deal.
After all, at least the penalties there are capped. Undisclosed foreign accounts or income can be serious and can carry civil and criminal penalties. The IRS Offshore Voluntary Disclosure Program (OVDP) isn't perfect, but it is a finite way of getting beyond the fear of discovery and prosecution. If you are evaluating the current 27.5% miscellaneous offshore penalty and cringing about how much it will hurt, what about opting out?
There is much talk of opting-out but sparse data so far. The opt-out election is irrevocable and is typically made after th…

FATCA and the Petrodollar

Last week I spent time watching some videos in a new YouTube channel that I subscribed to, called FATCA Forum and reading thru a website called  It was moving seeing first-hand accounts of how this law is impacting regular people.  There is this one clip in which a man is actually crying as he describes how it has ripped his family apart.  Of course FATCA is used as a catch all term to describe other related US compliance rules which include FBAR and PFIC reporting, together with similar efforts being promoted by the UK (son of FATCA) and other OECD nations.  One thing commentators are failing to do in my opinion, is to explain what exactly is driving this.
Previously, I wrote about the 2007 to 2010 period where rich countries saw the ratio of their gross sovereign debt to GDP spike from 74% to 101% on average.  British public debt jumped from just 44% of GDP to 79%, while US debt leapt from 66% of GDP to 98%.  Furthermore, thanks to weak profits and higher unemploym…

Unreported Bank Account In Singapore?

(Reuters) - Banks in Singapore are urgently scrutinizing their account holders as an imminent deadline on stricter tax evasion measures forces them to decide whether to send some of their wealthiest clients packing.
The Southeast Asian city-state has grown into the world's fourth-biggest offshore financial center but, with U.S. and European regulators on the hunt for tax cheats, the government is clamping down to forestall the kind of onslaught from foreign authorities that is now hitting Switzerland's banks. Before July 1, all financial institutions in Singapore must identify accounts they strongly suspect hold proceeds of fraudulent or wilful tax evasion and, where necessary, close them. After that, handling the proceeds of tax crimes will be a criminal offence under changes to the city-state's anti-money laundering law. "Because of banking secrecy, Singapore used to be an attra…