With Carl Limbacher and NewsMax.com Staff
For the story behind the story...
Tuesday July 18, 2000; 11:55 PM EDT
Offshore Bank Accounts May Soon Be Within Feds' Reach
With what seems to be the never-ending explosion of the global market comes the ever-crushing implosion of security and anonymity in the world of offshore banking.
Recently the European Union and the Organization for Economic Cooperation and Development cracked down on countries providing safe havens for foreigners hoping to evade domestic taxes or launder money.
According to the Financial Times of London, both the EU and the OECD chose to target smaller islands, branding them as "harmful tax havens," while turning a cheek to such "attractive tax havens" as Switzerland and Luxembourg. The OECD gave an ultimatum to 35 offshore financial centers including the UK Islands of Jersey, Guernsey and the Isle of Man, demanding that they revise their tax regimes within one year or face economic sanctions.
Some of the countries have agreed to cooperate, but many find the system unfair. For example, the Cayman Islands, which many contend have some of the worst standards, were not included on the OECD list.
Switzerland, which is believed to control a third of the offshore private banking market for the rich, is booming. Switzerland has refused to drop its bank secrecy law to cooperate with foreign investigations into tax evasion, although it is providing more information to foreign authorities than ever before. In order to open a private account today in Switzerland you must divulge a surprising amount of information and identification.
Swiss Offshore Banking:
Switzerland is home to the largest private offshore banking center in the world.
There are almost 400 banks in all, most offering private banking.
Seventeen banks act as unlimited liability partnerships.
Many are family controlled, some for over 200 years.
Partners guarantee the banks with their own personal wealth.
As long as they solicit no money from the public, they are under no obligation to publish their financial accounts.
The world’s top two private banks are UBS and Credit Suisse. They are publicly owned companies and are obligated to report their financial results.
JP Morgan and Merrill Lynch are both beefing up their Swiss banking operations.
Worldwide onshore private banking is growing faster than offshore banking.
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