America ... [is going] down the tubes, and the worst part is nobody knows it. They're all in denial, patting themselves on the back, as the Titanic heads for the iceberg full speed ahead.
No one can claim the person who said this is a nut or a radical either. He's Andy Grove, the man who built one of America's great New Economy companies--Intel--as quoted by mainstream journalist Fareed Zakaria in a recent issue of Newsweek. When people like Andy Grove are ready to tell the whole world that the United States is headed "down the tubes," it's time to act so you can protect yourself and your family.
Finding a Shelter for Your Assets
It doesn't work that way. The federal government has installed several barriers to make it difficult for you to gain real control of your assets and move them out of the country, and they require your banker, your stock broker, even your local Western Union office to cooperate with them. Moving assets takes informing yourself about the basics of the Bank Secrecy Act, Customs law and the Patriot Act as it applies to financial transactions. It takes planning. And it takes time. Those who start now should be able to liquidate, assemble their assets and move them abroad, but those who wait may find that the federal government has used the mechanisms already at its disposal to do what countries in similar circumstances have always done: shut off the flood of money "fleeing" the country because of financial panic or a political crackdown.
There are three stages involved in taking your assets currently in the U. S. and getting them safely and securely in a foreign account where you have access to them. At each step, there are obstacles created by the long, long arm of the federal government and American banking practice. Here's how you can navigate successfully through these difficulties so that you can use what you've built up through the years to finance your new life.
Establishing a Foreign AccountHave you ever heard of the Egmont Group? It's neither a consulting firm nor a real estate development company but an international organization created to improve the ability of governments to track the movement of money. In 1995, the Financial Intelligence Units (FIUs) of several nations, including the U. S., met in Egmont Palace in Brussels to devise a strategy to improve the scope and quality of the sharing of information about financial transactions.
The Egmont Group now includes 101 countries organized by region to facilitate information sharing about illegal and "unusual" financial transactions. (We'll learn more about "unusual" below.) This information sharing is done without any need for a court order.
Such information sharing is only as useful as the volume and quality of data collected by each of the participants. If banks in foreign countries allow so-called "anonymous banking" that requires customers to disclose little or no information about themselves, then the Egmont Group folks won't have much information to share, so another international organization, the OECD, has been crusading for countries to enact laws that require banks to collect information on customers more in line with U. S. regulations under the Patriot Act.
The Organization for Economic Cooperation and Development (OECD) in a previous incarnation helped implement the Marshall Plan, but now its role includes attacking bank secrecy and any other impediments to sharing information about international financial transactions with the United States. The OECD and its offshoot, the Financial Action Task Force, have been pressuring countries that have "anonymous banking" or that resist transmitting information to U. S. tax authorities to revise their laws or face sanctions. Remember Steve McQueen in the Thomas Crown Affair dumping satchels full of cash off at a Swiss bank without ever giving his name? The numbered Swiss bank account is extinct. Ever heard of the Austrian passbook account for which only possession of the passbook and knowledge of a password was necessary to deposit and withdraw money? It's gone after several years of FATF pressure. Been exposed to the Internet ads for offshore Caribbean banks where you could maintain accounts in privacy? Antigua and Barbuda had banking privacy laws that did require banks to collect customers' identifying information and allowed for its disclosure under a court order EXCEPT for purposes of tax investigation or collection. The U. S. and U. K. issued "Financial Advisories" against their banks, thus isolating them from the bulk of the financial world. Antigua and Barbuda changed their laws.
The American government has also put pressure on private banks directly to increase the amount of information they collect on new customers. Foreign banks that agree to collect and share information on their U. S. customers receive "Qualified Intermediary" (QI) status from the Treasury Department that gives them regulatory advantages and greater access to American financial markets. Banks in former "tax havens" in Central America and the Caribbean have been particular targets. One financial advisor describes how the situation has changed in the Cayman Islands:
It's a different world than it was ten years ago. They want references from you and letters from your bank. They want to know how you made your money.
The result is that emigrees will find it necessary to complete intrusive forms to even establish an account in many places. An emigrant's new bank will be providing his old one with information about his new location and account. That's assuming, of course, that the new bank will even accept the deposit until the new arrival gets a local street address or perhaps even establishes residency depending upon local law.
(There are exceptions, but these are not well publicized, and for a good reason. As soon as U. S. money begins heading to this or that country because of less intrusive banking laws and practices, the Egmont Group and the OECD will be putting the heat on and eliminating that refuge.)
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