| First it needs to be stated that no one has a | | | | restaurants, as tour guides, taxi drivers |
| crystal ball which predicts the future. These | | | | etc. So more jobs are at stake in the tourism |
| thoughts are just opinions and should be | | | | business. We also have to take into account |
| taken as such not as legal or tax advice. We | | | | the resorts these countries have which create |
| will try to show the political positions of | | | | even more jobs and generate revenue in the |
| the countries that are not in favor of the | | | | form of a hotel room tax built into the |
| tax haven offshore jurisdictions and the | | | | rates. These countries also charge a head tax |
| position of the tax haven countries. The | | | | on every person coming into their country. |
| countries most outspoken against offshore | | | | Bottom line is there is much more money in |
| banking and offshore corporations are | | | | the tourism business than there is the |
| Australia, UK and USA.Today there is a great | | | | offshore business for the government of these |
| outcry from these and other countries about | | | | jurisdictions. The governments of these |
| the tax saving benefits afforded to citizens | | | | countries don't make much off of a bank |
| of certain countries by going offshore. These | | | | account for instance, actually nothing. They |
| countries claim that their constituents are | | | | have no income or capital gains tax. The |
| cheating them out of billions of dollars of | | | | offshore corporations would pay a few hundred |
| taxes by going offshore. The offshore | | | | dollars a year in taxes but that was it. The |
| jurisdictions that are considered the tax | | | | banks would pay a few thousand dollars a year |
| havens say that is a nice allegation but we | | | | for their licenses. So these countries sold |
| are not your collection agency and do not ask | | | | out on offshore privacy to protect their |
| us to change our bank and corporate privacy | | | | tourism. If they did not do so the countries |
| laws because your constituents do not want to | | | | allowing tax free importation from these |
| pay taxes, this is your problem not ours. The | | | | countries of tourist bought items might go |
| actual amount of taxes that are avoided | | | | away. Tourists returning from these countries |
| unlawfully is a figure that one can only take | | | | by ship or air might find themselves stuck in |
| a guess at. Many people set up offshore | | | | long lines while they are searched and |
| structures to do business outside of their | | | | interrogated by authorities of various |
| home country and are not in violation of any | | | | affected countries which would quickly and |
| laws the way they conduct their business | | | | seriously discourage tourism to these |
| affairs. Many people live in other countries | | | | countries. Other countries like Switzerland, |
| and need to own offshore bank accounts, | | | | Lichtenstein, and Luxembourg sold out due to |
| offshore corporations, offshore real estate, | | | | pressure from the EU. But now we are seeing a |
| etc. Many people use offshore privacy to | | | | reversal in position regarding the EU, not |
| protect themselves from identity theft, | | | | much of a reversal but at least a sigh of OK |
| kidnapping, blackmail, and possible | | | | enough is enough.In recent months the USA was |
| extortion.Let me use an analogy to make a | | | | exposed by the New York Times Newspaper in a |
| point. In Latin America there is an | | | | scandal whereby they were monitoring SWIFT |
| organization of five states called Mercosur. | | | | wire transactions for some years. SWIFT is a |
| Mercosur consists of Argentina, Brazil, | | | | private company that enables banks to |
| Paraguay, Venezuela, and Uruguay. Mercosur | | | | communicate with each other securely |
| also has associate members which are as | | | | including sending wire transfers. SWIFT |
| follows: Chile, Bolivia, Peru, Columbia and | | | | machines require a separate terminal and line |
| Ecuador. The Mercosur countries engage in | | | | so as to make them most secure. The USA |
| free trade and easy border controls with no | | | | served a court order on the SWIFT people in |
| passports, just national identity cards for | | | | New York to turn over all the data they |
| border crossings. Mercosur recently issued a | | | | requested and gag ordered them to not mention |
| statement that they would in the future | | | | what was going on. It went on for two years. |
| strive to resist any further attempts to get | | | | This got the EU nations most upset. While |
| them to spend more resources on narcotics | | | | they have not actually prosecuted the SWIFT |
| enforcement that stems from the UN. The UN | | | | people for violating the banking laws of the |
| says its member countries must enact certain | | | | various European nations affected, there was |
| kinds of laws to control narcotics and states | | | | serious talk of it. Whether or not obeying a |
| these laws and insists on enforcement | | | | USA court order to violate the banking laws |
| policies. The Mercosur spokesperson stated | | | | of other nations is a viable defense has |
| that this was an irrational policy since it | | | | never been tested in any court, yet anyway. |
| has not worked for over a quarter of a | | | | The EU position on this was they must get the |
| century and it was severely draining the | | | | USA to understand their banking laws call for |
| resources of their countries. Essentially | | | | privacy. This of course is not exactly giving |
| they said they were sick and tired of the | | | | ground for more privacy invasive laws which |
| United States which is the nation driving | | | | is what we mean by a reversal.Today the most |
| these policies through the UN, making their | | | | privacy oriented jurisdiction in the world is |
| problems, the problems of other countries and | | | | Panama. Panama has 400,000 corporations |
| they were going to collectively attempt to | | | | registered there. Panama requires corporation |
| legalize narcotics in their own nations to | | | | formation agents to be lawyers and their know |
| free themselves from this heavy burden of | | | | your client rules are strict and call for |
| narcotics enforcement. This has already begun | | | | criminal penalties if not followed. Panama |
| to happen in Bolivia, Paraguay, Argentina and | | | | banks follow tight anti-money laundering laws |
| Venezuela with the abundant legal | | | | as well as know your customer laws. Panama |
| availability of cocoa leaf. The cocoa leaf | | | | does still allow for anonymous bearer share |
| has cocaine alkaloids (real cocaine) and is | | | | corporations which do not require the entry |
| commonly used as a chew like chewing tobacco | | | | into any registry of any ownership names or |
| leaf or made into tea leaves. Street cocaine | | | | identities. The anonymous bearer share |
| is perhaps 30 times as potent and is diluted | | | | corporations combined with Panama bank |
| with harmful substances like turpentine, | | | | secrecy laws make for the best privacy in the |
| ether, etc. Cocoa leaf is a natural plant | | | | world today. Panama foundations are also |
| product used for centuries as a stimulant by | | | | anonymous with no owners, beneficiaries or |
| people living in the high altitudes of | | | | protectors names appearing in any registry or |
| Bolivia, farm workers etc. One can now see | | | | database. Panama is also in no tax treaty |
| coca tea being sold freely on the internet | | | | with any other country and is fairly unique |
| but I would strongly advice you not to order | | | | in this regards. Of course one can ask the |
| any because you may get charged with | | | | question if Panama can sustain their |
| narcotics importation, seriously because it | | | | practices under pressure from other |
| can be lab tested to contain cocaine. So my | | | | nations.First off Panama does follow the FATF |
| point is a lot of countries have said ok | | | | (Financial Action Task Force) practices. |
| enough is enough when it comes to narcotics. | | | | Secondly Panama does not exactly have a lot |
| It is not working leave us alone, take care | | | | of tourism, actually it has quite a small |
| of your own problem. So Mercosur countries | | | | amount of tourism and most of their tourism |
| are now worrying about their own problems | | | | comes from Latin America not the EU or USA. |
| more and less about the narcotics issues in | | | | This means there is no meaningful tourism |
| the USA and other nations. I think you will | | | | that can be taken away. Panama is a small |
| see more of the same type of thinking when it | | | | country and 15% to 20% of the workforce is |
| comes to offshore banking, offshore | | | | employed by the international banks. Panama |
| corporations, offshore foundations, offshore | | | | has 400,000 corporation registered there who |
| stock brokerage accounts etc.Offshore | | | | each pay $300 in annual corporate taxes. This |
| jurisdictions have to go through all sorts of | | | | comes to $120,000,000 dollars and this is for |
| compliance that is not needed in say the USA | | | | a country of 2.9 million people. Also |
| or the UK. One offshore formation agent went | | | | consider these corporations are paying for |
| to the USA and was able to open eight USA | | | | resident agents, nominee directors etc. Then |
| bank accounts in one day. In Panama a bank | | | | we get into Panama Foundations which also |
| account can take five days after you collect | | | | collect $300 in annual taxes each year plus |
| and submit the reference letters and | | | | nominee council member fees. Panama will and |
| documents. In the USA and UK no bank | | | | has resisted attempts to compromise banking |
| reference letters are required to open a bank | | | | secrecy and corporate secrecy.Again let us |
| account, neither are any professional | | | | look towards history to see what we can |
| references required. In the USA and UK they | | | | learn, this time focusing on anonymous bearer |
| do enforce money laundering protective | | | | share corporations. The issue with anonymous |
| measures strictly. One can buy USA | | | | bearer share corporations is that when the |
| corporations or UK corporations without any | | | | international wires are monitored it is |
| of the due diligence requirements that are | | | | impossible to tell who the natural persons |
| required from offshore jurisdictions. So the | | | | are behind the bearer share corporations |
| playing field is not exactly level yet these | | | | sending or receiving the wires. The British |
| countries are screaming for more controls not | | | | Virgin Islands used to offer anonymous bearer |
| on themselves but on other countries. It | | | | share corporations. A few years ago they gave |
| seems that the offshore jurisdictions will | | | | in to pressure from the UK and stopped |
| scream enough is enough if any further | | | | issuing new bearer share corporations but |
| controls are imposed on them and resist them. | | | | they did make allowances for the existing |
| Of course one wonders what further controls | | | | bearer share corporations to remain anonymous |
| they could come up with that they haven't | | | | for 10 years. After that time they would need |
| already imposed.Let's look at history a | | | | to dissolve or operate in a non-anonymous |
| little to see how things deteriorated in the | | | | mode. If we want to look on the dark side we |
| past regarding offshore privacy and offshore | | | | can consider Panama doing the same if |
| banking. Most of the older offshore tax | | | | international pressure ever built up |
| havens are also tourist destinations such as | | | | sufficiently to force a change. So of course |
| Cayman Islands, Nassau, Bermuda, Grenada, | | | | those owning an existing bearer share |
| Belize etc. These countries usually have | | | | corporation would be unaffected for ten years |
| little if any natural resources and need to | | | | and these corporations would probably go up |
| bring in everything they consume. While some | | | | significantly in value on the secondary |
| of them avoid income taxes instead they | | | | market. We have absolutely no indications |
| impose taxes on goods imported. These | | | | subtle or otherwise that anything is going to |
| countries got heavily involved in tourism as | | | | change in Panama.It is also a possibility |
| a way to keep their economies moving. A | | | | that some other nations may enter into the |
| cruise ship docking at these ports usually | | | | bank secrecy arena in the near future and |
| carries 2500 people. Each person probably | | | | some other nations may return to bank secrecy |
| spends an average of $100 a day when in this | | | | as well. Only time will tell. Nothing we see |
| ports buying t-shirts, duty free liquor, | | | | gives any inkling of an idea that Panama will |
| tobacco, jewelry etc. many spend a good deal | | | | reverse on its position of bank and corporate |
| more. That is $250,000 per cruise ship. These | | | | privacy and it appears that things may have |
| jurisdictions get from 3 ships per week, to | | | | already sunk to an all time low and offshore |
| 40 ships per week docking there. The money | | | | banking and corporate privacy may actually |
| from the cruise ships exceeds what would be | | | | soon start to improve, first with the wire |
| earned from their previous offshore banking | | | | transfer system and later on in other |
| and incorporation activities. Remember a bank | | | | areas.For more information on Offshore |
| that controls hundreds of millions of dollars | | | | Banking and Offshore Corporations go to: |
| of deposits can only have 50 or so employees. | | | | |
| A thriving cruise ship port can have | | | | Martinez is a senior partner at Panama |
| thousands of employees working in the shops, | | | | legal Law Firm. |