Internet
Offshore Banking
Storms gather over fantasy islands
Mmm...the Bahamas, the Cayman Islands, Grenada... the very
names trip off the tongue and conjure up images of exotic and
sophistication. Bet you could get a decent return or two from
a company out there...
Imperial Consolidated, for example: 15 per cent per year for
one of its funds - guaranteed. 15 per cent per year! Guaranteed!
Why even a poor old hack could make a decent man of himself
with returns like that.
But that’s the thing about fantasy holiday destinations,
they always seem just a little too fantastic.
Internet Offshore Banking & Investment International
As reported elsewhere in Investment International, Imperial Consolidated
is offering fabulous returns. And while we are not saying IC will
fail to achieve, one wonders whether the firm would have passed
more stringent regulatory requirements in say, Jersey.
It has been a tough time for IC lately. News has been filtering
through from the Bahamas that the firm has been forced to cease
offering its Hint credit card.
This, because it lost the backing of card issuer Leadenhall
Bank & Trust, and card administrator Axxess International.
The firm has also decided to ship out of the Bahamas and may
set up shop in Grenada, where it also has offices.
Internet Offshore Banking - Grenada
Meanwhile, over in Grenada, a firm called Preferred Trust,
run by a man who is operating under a new Grenadan passport
and a different identity, is offering even more enormous returns
for investors.
Joseph Severin (previously Verlin Swartsendruber) is hoping
to give investors returns of up to 60 per cent per year on investments
as low as US$10,000.
Mouth watering stuff. But Swartsendruber, sorry Severin, admits
the returns are not guaranteed and says his company has not
been independently audited because this is unnecessary under
Grenadan law.
So there you have it. Enormous returns and risk to match. But
then, that’s the fantasy of the sunshine islands.
Still, it may be harsh to criticise some of these jurisdictions
too heavily. After all the Bahamas has just landed the much-coveted
Qualified Jurisdiction status that is awarded by the IRS in
America.
Internet Offshore Banking & America
What this means is that America approves of the way the Bahamas
is being regulated and of what it is doing to fight money laundering
and tax ‘avoision’ by US citizens.
For jurisdictions that fail to land the ‘qualified’
status, the punitive measures are severe. Companies operating
in such centres will face the sanction of a 30 per cent withholding
tax on US-sourced income.
Ian Fair, chairman of the Bahamas Financial Services Board,
was naturally overjoyed at the news.
He said: “It is obviously very, very good news because
it clearly indicates recognition and acknowledgement that the
laws that we have put in place and amended meet international
standards.”
Fair also reckons the boost from the US will help the Bahamas
to escape the OECD’s purge on tax havens.
Internet Offshore Banking & The Bahamas
“Our chances [of escaping the blacklist] have been increased.
They have been enhanced by this because the only country which
keeps a constant watch on us is our great neighbour, the United
States.”
The Bahamas submitted its case for QJ status in the middle of
last year, but the US stalled because of the centre’s
lack of compliance with Know Your Customer rules.
It was only recently that the Bahamas introduced KYC rules
which allowed the islands to win the status. At the moment the
Bahamas doesn’t know how long it will retain QJ status.
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