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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, December 12, 2000 - Vol. 2  No. 58
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In This Issue:
* COMMENT: The Money Laundering Farce Must End -
Insatiable FATF. Nauru's Billions. Swiss Reputation. ML Links.

* OFFSHORE: Bahamas Bank Quits. Anti-OECD Group. BVI & Man Folding?
Bermuda Independence Back Again.
$$ The Offshore Money Manual - Don't Go Offshore Without It $$

* WEALTH: Tax News from US, Ireland, Russia, Gibraltar. Diamond Boom.
$$ The World's Six Best Retirement Havens $$

* PRIVACY: U.K. Snoop Law Countered. Wired Privacy Link. Web Phones.
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COMMENT: The Money Laundering Farce Must End
by Bob Bauman, Editor.

One of the major arguments of the world money police is the imagined
need to stop "money laundering." They claim widespread abuse of banking
and other financial systems by sinister criminal forces. Offering little
proof, artful officials use their questionable premise to justify a
supposed right to monitor and record all financial transactions. By
design, banks and their employees have been forced into the unwanted
role of spies and police deputies.

In the only popular uprising against this arrogant attack on financial
privacy, in 1999 protests from hundreds of thousands of irate Americans
forced the US government to back down on so-called "Know Your Customer"
rules. The KYC proposals would have made every American banker a
government vetting agent, with a duty to investigate, watch for and
report supposed "suspicious activity" of all account holders. (Since
then the Clinton administration has pressed banks to adopt "voluntary"
KYC rules in spite of these protests).

From earliest history, unless restrained, governments always have used
every available tool to spy on citizens. Until this trumped up money
laundering scare the consensus in western democracies has been that
personal freedom and privacy greatly outweighed prior restrictions
aimed at potential criminal abuse. This established principle rightly
forced police and prosecutors to build each individual case on legally
gathered evidence rather than use the dragnet approach.

But now prosecutors reverse this traditional right to privacy. Instead
of a presumption of innocence, whole classes of people are viewed as
potential criminals based solely on wealth and its free use. Subject to
civil forfeiture, the accused are stripped of their assets and forced
to prove their innocence.

Are these drastic restrictions on financial freedom justified?

Existing anti-ML efforts have proven very costly and highly ineffective.
In the US in 1998, only 932 people were convicted of money laundering,
yet the cost to the private and public sectors exceeded $10 billion,
averaging more than $10 million per conviction. Based on several years
statistics, a British law professor calculated that the UK government
has stopped only 0.004% of the criminal money that flowed through the
City of London. The professor concluded: "Money launderers do not have
a statistically significant chance of being caught, hence the deterrent
effect of such laws is negligible."

The question must be asked: "When is this madness to stop?" No one
should ever have to justify he right to keep their personal business
private, except upon an individual indictment based on specific facts
presented to a court of law.

This financial dragnet must end. A continuing and expanded popular
resistance holds the key to success.
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INSATIABLE F.A.T.F DEMANDS
PARIS. After varying appeasement efforts, the 15 "non-cooperative
countries" that the Financial Action Task Force named to its "money
laundering blacklist" in June are told they must do still more.
LINK: http://www.moneylaundering.com/NewsArticleDec004.htm
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NAURU'S BILLION DOLLAR BUSINESS
The New York Times claims that the remote Pacific island of Nauru has
found a lucrative niche by learning the trade of money laundering. An
interesting first hand account from the island itself. LINK:
http://www.nytimes.com/library/magazine/home/20001210mag-moneylaundering.html
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SWISS REPUTATION AT STAKE?
ZURICH. As we have often reported, Switzerland has tightened up
standards relating to the assets of shady characters, concerned about
its own national reputation.
LINK: 
http://globalarchive.ft.com/globalarchive/articles.html?id=001114001476&query=
offshore#docAnchor001114001476
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SOURCES ON THE NET:
* Money Laundering Alert - good resources and links around the world.
LINK: http://www.moneylaundering.com/
* Money Laundering Compliance - for professionals in law, banking and
financial services and enforcement agencies.
LINK: http://www.countermoneylaundering.com/
* More LINKS: http://www.net-magic.net/users/jlafear/links.html
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* OFFSHORE *

BAHAMAS BANK EXODUS BEGINNING?
NASSAU. The head of an offshore bank that lost its license to operate
blamed Bahamas new, stricter laws for his decision to shut down and
liquidate assets.
LINK: http://www.herald.com/content/mon/business/internat/digdocs/038682.htm
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FIGHTING THE O.E.C.D. ANTI-TAX HAVEN ATTACK
WASHINGTON, DC. The OECD is intent on stamping out "harmful tax
competition," but an opposition voice is heard from the Center for
Freedom and Prosperity.
LINK: 
http://www.freedomandprosperity.org/Articles_on_Tax_Competition/tni12-02-00/tn
i12-02-00.shtml
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B.V.I. PLANS O.E.C.D. APPEASEMENT
ROADS TOWN, BVI. The Finance Minister says the UK overseas territory
will go along with London and OECD demands, beefing up anti-ML laws
and allowing sharing of tax information with foreign governments.
LINK: http://www.tax-news.com/html/oldnews/st_jbvindustry_11_12_00.htm
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MAN FINANCIAL PRIVACY UNDER FIRE
DOUGLAS, I.O.M. Under investigation by Irish tax authorities, amid
charges of Russian money laundering, the Isle of Man may compromise
its financial privacy laws.
LINK: http://www.tax-news.com/html/oldnews/st_celticleague_11_12_00.htm
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BERMUDA INDEPENDENCE BOOST?
HAMILTON. A leading advocate of Bermuda independence claims the
government in London is pushing the island towards inevitable separation.
LINK: 
http://www.bermudasun.bm/cgi-local/edpull.pl?cat=01News&ord=01&ed=2000-12-08

A very useful Web source - all the Online newspapers of the world:
LINK: http://onlinenewspapers.com/

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+ WEALTH +

I.R.S. STILL CHASING OFFSHORE TAX CHEATS
After two years of reporting in this e-letter, the general "news"
media finally is catching on to the IRS offshore tax evaders' story.
Example at
LINK: 
http://www.nandotimes.com/nation/story/body/0,1037,500288787-500457143-5030114
64-0,00.html
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ANTI-ML LAWS USED TO CATCH FOREIGN TAX EVADERS
NEW YORK. A US district court says the government can forfeit bank
accounts (in this case $15.3 million) located in US belonging to accused
foreigners allegedly evading foreign taxes. For a related case, see
US v TRAPILO, at
LINK: http://laws.findlaw.com/2nd/971011.html
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U.K. CORRUPTION CRACK DOWN
LONDON. As part of a general crackdown on business and international
corruption, the UK will allow foreign governments to reclaim money
stashed in British banks by corrupt leaders.
LINK: 
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT35CHMKMGC&liv
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IRISH TAXES ARE SMILING
DUBLIN. When people think of Ireland, they usually think of leprechauns,
shamrocks and big pints of Guinness, not favorable tax treatment. But
Ireland is one of Europe's great tax havens.
LINK: 
http://www.forbes.com/2000/11/17/1117lifestyle.html;$sessionid$24BFT1IAADEUHQF
IAGWCFEY
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RUSSIAN FLAT TAX STARTS SOON
MOSCOW. Starting Jan 1, 2001 Russian citizens will enjoy a flat 13%
tax rate on income earned. Some are wondering if it is a genuine
initiative to stimulate the economy or an attempt to lure suspicious
citizens into the Russian tax net.
LINK: 
http://www.nationalpost.com/search/story.html?f=/stories/20001207/396427.html
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GIBRALTAR ANOTHER OFFSHORE SUICIDE?
Gibraltar is making noises about imposing new taxes to remove the highly
attractive existing discrimination that favors non-residents. In a
misguided quest to appease the OECD's phony demands the Rock could
seriously damage its own financial future.
LINK: http://www.tax-news.com/html/oldnews/st_jgioverhaul_11_12_00.htm
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A.I.B. BUYS SWISS BANK
DUBLIN. As we reported, the Sovereign Society's offshore convenient
bank account provider, ANGLO IRISH BANK, will buy a private bank in
Geneva, a significant expansion of AIB's private banking and asset
management operations.
LINK: http://www.independent.ie/2000/341/b02c.shtml

More about the Sovereign Society member's offshore convenient bank
accounts at
LINK: http://www.sovereignsociety.com/Convenient_Offshore_Bank_Accounts.html
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DIAMOND SALES BREAK RECORDS
JOHANNESBURG, South Africa. Diamond sales are expected to break all
records this year. Half year sales from De Beers, which has 2/3 of all
diamond sales, were 44% higher at $3.5 billion.
LINK: 
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3OQTHZKGC&liv

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* PRIVACY *

ENCRYPTION COUNTERS U.K. SNOOP LAW
LONDON. In six months Britain begins requiring encryption users to
surrender their keys to the government. But cryptographers have new
software that makes enforcement impossible.
LINK: http://www.theregister.co.uk/content/4/15292.html
Check out the software at LINK: http://www.m-o-o-t.org
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WIRED PRIVACY NEWS COLLECTION
Your every electronic transaction - Internet e-mail, Web browsing,
online purchases, may be under surveillance. Keep track of Carnivore,
Echelon, and privacy news at Wired magazine's Web site,
LINK: http://www.wired.com/news/privacy/
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TELEPHONES ON THE WEB
The Internet's most complete index of online phone books, with over 400
links to Yellow & White Pages, Business Directories, Email Addresses
& Fax Listings from over 170 countries.
LINK: http://www.teldir.com
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER: Bob Bauman, Editor.
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