Robots, Art, Offshore Finance, and Life 


Robots, Art, Offshore Finance, Life - Offshore due dilligence; page 3 of 8
"Offshore Finance" safe harbour

​Using an Offshore credit-card?

Are your offshore investments really private? And what about your offshore credit card? Could your private details leak into open databases? These are issues to address well before you give your address away.

What about the Financial Action Task Force (FATF)

Banks worldwide are being pressurised by the FATF to clearly establish the actual residential address at which the account holder and/or director of an offshore corporation lives.

Addresses are of great importance to those seeking to establish who has private offshore holdings; addresses make cross-referencing with tax files and other databases possible. The FATF realise that while offshore banks will stop short of giving out the confidential details of their account holders, there are many other ways in which at least some of the data can slip out into the public domain.

The leakage of your private information can occur whenever your offshore bank interacts with third parties -- be they banks or other financial institutions -- on your behalf. And this happens more often than you think.

Ever make a US Dollar payment?

​Making a wire-transfer will typically involve one or more correspondent banks. If you order a payment in US dollars, funds will be routed via the United States -- along with your name as the sender, as well as your address. Where your name alone would probably not be enough to successfully identify you, your residential address provides the extra piece of information necessary to lead onshore authorities right to your door.

But it's not only wire-transfers that can compromise your confidentiality.
One of the attractions of an offshore environment is the availability of a wide range of investment products, and most offshore banks will gladly help you achieve your investment goals. Where some of the investments on offer will be private or in-house products, virtually every offshore bank will also let you access an array of third-party investment vehicles such as funds, bonds and a wide range of other financial instruments.

But putting your money in your favourite fund may well be the end of your offshore secrecy if the fund is based in a tax-reporting friendly jurisdiction. Again, your offshore bank may well (ormay have to) give out your personal details -- and if it includes your private residential address, you may be giving the bureaucrats back in your home country enough data to identify you.

Make sure you know your jurisdiction!

Naturally, caution is advisable with respect to investment vehicles managed from the United States or the European Union. Remember that Luxembourg, a home to many popular investment funds, is part of the European Union -- and although it still enjoys a degree of autonomy regarding bank secrecy, this is unlikely to be the case for long. Even more traditional offshore havens are surrendering their fiscal sovereignty -- you might think it safe to invest in a Bermuda-based fund, but you might not know that Bermuda was first to sign up to the Organisation for Economic Co-operation and Development information sharing protocols with a letter of commitment.

We know which Banks protect your confidentiality

​There are a handful of privacy-minded offshore banks that are aware of the danger that third-party investments pose to their clients' confidentiality. To prevent the leakage of client information, they will hold all third-party investment products in their bank's name rather than in the name of the client. Often, however, this is only applicable to numbered accounts. 

Offshore - Due Diligence (Page 3 of 8)