One particular financial pattern which you need to be aware of, especially because it excites bankers, regulators and bureaucrats is the rapid transfer of money through accounts.
It is consequential in the context of banking transactions that the United States dollar is an effective tool with which to intrude into the financial privacy of all, including non-US citizens.
Making a transfer in US dollars become particularly perilous following the publication of a US Senate Report which demanded that correspondent banks handling US dollars transfers for foreign banks should not only positively identify the foreign banks' ordering customers and transfer beneficiaries, but also note the nature of each transaction.
This situation came about due to a few isolated scandals concerning so-called shell banks caught using New York dollar correspondents for illicit means. However, it now affects all banking transactions that make use of the US banking systems -- and that is virtually all US dollar denominated cross-border payments.
For example, if you hold a US dollar account at a bank in Budapest, your funds will actually be held in the United States, at your Budapest bank's nostro account.
Under the new guidelines, you are required to provide the US correspondent bank with your personal details such as name and residential address, as well as give a reason for any wire transfer you might care to order. Naturally, your local bank will forward this information on your behalf as a matter of course -- you won't even be told. Few banks are willing to risk having their all-important US dollar correspondent accounts closed for non-compliance.
Effectively, this means that banking in a low-profile privacy haven no longer provides a clearly defined protection from the reach of the US authorities. In addition to obtaining your personal data, they can even order the freezing of your US Dollar funds if they deem your actions with their currency to be in some way irregular!
Additionally, the US IRS (Tax Authorities) are continuously negotiating information exchange protocols with foreign governments. There are a whole range of currencies that do not share this surveillance risk. A small number of privacy-conscious offshore banks are now using tactical strategies that enable them to best serve their customers without the onerous reporting requirements.
So Far, the 15 pages of this Offshore thread have painted a picture of some of the pitfalls which need to be avoided and also touched upon other areas which need to be considered. This is the tip of a very large iceberg. If you want to hear about solutions, contact us to schedule a call, or discuss by email, so we can address your specific problems speedily and efficiently.