In the not too distant past, opening an offshore bank account and moving your assets beyond reach of those who might wish to lay claim over them was often a straightforward process.
However, doing the same today -- and keeping your offshore assets confidential in particular -- requires some advance planning and knowledge of what you are up against. Cutting corners or making the wrong decisions at the beginning of the process can compromise your privacy in the future.
Choose your offshore agent with care and remember: they are there to serve you, and not to scrutinise you. Similarly, many bankers are still businessmen who understand your need for privacy -- even though most are under pressure to turn into the agents of a fledgling global financial police force.
Consider how your financial privacy might be compromised, and take steps to prevent the location of your offshore assets in the long term. This ranges from the most obvious steps -- such as not telling anyone -- to awareness of the uses to which digital and non-digital footprints can be used.
The transfer of assets offshore rarely receives the attention it deserves. Opening an offshore bank account is just the start; successfully placing your assets offshore is a separate process and it requires careful thought.
Any asset transfer obviously raises a fundamental question regarding privacy. It is obvious that transferring funds from one bank to another leaves a permanent record of the transaction in the sending bank; in terms of privacy, a money transfer effectively ties two bank accounts together.
Transactions that involve an offshore bank on the receiving end deserve careful consideration. Taking shortcuts can compromise not only your privacy, but also the security of your assets.
Those who casually credit their new offshore bank account with a direct transfer from a regular onshore account often later regret their carelessness. The creation of an unguarded and permanent record of the location of their offshore assets is a consequence that a surprising number of people do not consider.
In the majority of today's developed countries, confidentiality of banking transactions is virtually non-existent. The days when requests for access to bank information had to be supported by clear evidence of wrongdoing are gone.
In large parts of Europe, for example, tax authorities and others routinely gain access to bank account records, sometimes on a regular (annual) basis. The need for court orders is diminishing as governments try to convince us that if we are doing nothing wrong, we have nothing to hide.
Think twice before sending your assets offshore from any bank that is either directly located in your country of residence, or located within an economic, political or information-sharing block of which your own country is a member -- such as the EU. If privacy is a concern, don't -- onshore bank records are not private; the record of your onshore-to-offshore transfer can slip out of the door before you know it.
Your onshore banker himself might volunteer the details of your activity, even before the government asks for it. This can happen if your banker detects what is termed as "unusual or suspicious account activity" -- and the very act of sending money offshore is cause enough for suspicion. The fact that your transaction is legitimate does not matter at this point.
For instance, the Financial Services Commission in Jersey -- an offshore haven itself! -- issued an "Anti-Money Laundering Guidance Update" warning its financial institutions to exercise vigilance when dealing with banks in Malta, The Cayman Islands, Antigua and rather predictably Russia. Similarly, the US Treasury has issued warnings to financial institutions regarding transactions with countries on blacklists produced by the FATF -- and that includes just about every well-known offshore tax haven.
Where a few years ago making a straightforward wire transfer to an offshore banking haven would have probably gone unnoticed, doing the same today may generate a Suspicious Activity Report (SAR), forwarded to a national Financial Intelligence Unit for further investigation.