July 2004 Archives

By John Berlau -

For John Kerry, the specter of Attorney General John Ashcroft trashing Americans' civil liberties has been a useful campaign prop. In campaign stops, Kerry has promised to "end the era of John Ashcroft and renew our faith in the Constitution." In a Kerry administration, he promised the liberal group MoveOn in June 2003, "there will be no John Ashcroft trampling on the Bill of Rights." In his 2004 campaign book, A Call to Service, Kerry accuses Ashcroft and the Bush administration of "relying far too much on extraordinary police powers."

BERMUDA: After a half century as an offshore banking haven for companies from the United States and other nations, Bermuda has followed the lead of other financial centres, banning insider trading and market manipulation.

The island nation's Senate passed the insider trading and market manipulation laws yesterday, following a similar move by the House of Assembly on Friday.

Those found guilty of insider trading face up to seven years in jail or fines of $US175,000, while market manipulation carries a maximum fine of $US100,000 or five years in prison.

By Katherine Yung -

DALLAS - American workers are encountering a harsh truth about how they earn a living: Old expectations about safe careers, the best opportunities and steadily rising incomes are being shaken as never before.

For the first time, a growing number of middle-tier service jobs -- software engineers, financial analysts and the like -- are moving offshore or paying a lot less than they once did.

This globalizing of the world's work force -- still in its early stages -- has allowed American employers to drastically lower labor costs, giving them more flexibility and choices in hiring. Feeling the pain are American workers, who face a much more brutally competitive job market, stagnant or declining pay in many cases and widening income inequality, experts say.

By Lilla Zuill

One of America's biggest banks – JP Morgan Chase & Co. – is putting down roots in Bermuda with its announcement yesterday that it was buying up a fund administrator operating on the Island. The deal, for an undisclosed amount, will see JPMorgan Chase – which is reputed to be second largest US banking firm – acquire Tranaut Fund Administration Ltd., a privately-owned hedge fund administration services company said to service about 40 hedge funds.

Tranaut, which has offices in Dublin and Bermuda, helps hedge fund managers with accounting services as well as taking on the task of corresponding with fund investors. Of Tranaut's 45 employees, nine are based in Bermuda, the company said yesterday.

By Jon Boone

Gibraltar gave the English language the phrase "as safe as the Rock", such was the impregnability of the fortress base for the Royal Navy. But the same cannot be said about Rock Financial Services, an execution-only brokerage company based in Gibraltar that collapsed last year losing £12m and leaving hundreds of small investors out of pocket.

The downfall of Rock risks seriously tarnishing the reputation of the territory, which has been seen as one of the better places for investors to manage their money offshore.

by Bill Blevins

A thorough wealth-management programme needs to consider various aspects, including tax efficiency, income requirements, possibility of above-average returns, inheritance issues, probate, dependents, family requirements and administration simplicity. Many individuals work on these separately or only consider some of them. It is, however, possible to incorporate them all together in one financial planning exercise, one that will be simpler and possibly cheaper than you may expect.

By von Ron Lewin (The American Chamber of Commerce in Russia)

“Offshore Software Development” in the IT world is the term most often used to describe the business of outsourcing software programming and engineering services to contractors or wholly-owned facilities located in foreign countries with lower labor costs. India is the largest provider of such services, estimated to be worth $6.3 billion in 2000-2001.

The traditional reason for this practice is cost-avoidance in response to a shortage of programmers and the resulting rise in salaries. However in some cases it is also done to gain access to specific technical skills which might not otherwise be available.

By Vernon S. Veira

Real estate in the right place not only offers the potential for investment profits, but also offers you a safe alternative if things go bad at home. Since real estate you own offshore will never show up in a domestic asset search, it also provides practical privacy and asset protection advantages.

If these advantages weren't compelling enough, in one of the Caribbean's premier jurisdictions for international real estate investments, St. Kitts & Nevis, when you purchase qualifying real estate, you're eligible for a remarkable and almost instant benefit: an alternative citizenship and passport.

By Lesley Campbell

A LITTLE known piece of EU legislation is set to come in to force in January next year which may catch out a number of innocent British citizens.

The directive aims to identify citizens of EU member states who are avoiding tax by keeping funds offshore.

It raises, yet again, the complex question of tax evasion versus tax avoidance. There is nothing illegal about having legitimately-earned money in an offshore bank account and earning interest on it. What is illegal is neglecting to declare the interest to the Inland Revenue and not paying tax on it.

By Sherry Slater

The secret to predicting the stock market’s direction lies in understanding the commodities market, an Iowa-based author says.

Glen Ring, an analyst and speaker, will offer his insights to local investors Thursday and Friday as he explains how various markets interact. The evening, introductory session is free. The day-long, advanced session costs $199. He expects about 50 people to attend the first and about 30 to go on to the second.

Bank of China has become the first Chinese bank to open a premises in Middle East and North Africa, with the news that its representative office opened in The Diplomatic Area in Manama, Bahrain, on 1st July 2004.

Guo Jingsi, Chief Representative of The Bank of China Representative Office, said: 'The Middle East is a key market, and is currently China's fourth largest trading partner. We will be looking to develop the links between these two key emerging regions over the next few years, by promoting investment opportunities.'

'The Middle East is a new concept to us. We plan to study the market and will investigate the possibility and feasibility of upgrading our licence to include an Offshore Banking Unit (OBU) in the years to come.'

By Bob Williams and Jonathan Werve

WASHINGTON, July 15, 2004 — U.S. oil and gas companies have at least 882 subsidiaries located in oil-free tax havens such as the Cayman Islands, Bermuda, and even the tiny European principality of Liechtenstein, a Center for Public Integrity investigation has found.

Further, the investigation revealed that at least a half dozen U.S. oil and gas companies have actually re-incorporated in tax haven countries.

In the past, Enron Corp. had by far the most tax haven subsidiaries with 780, but that was before the troubled company declared bankruptcy and sold off or shut down nearly all of its operations. It is unclear how many of those subsidiaries are still in existence today.

The Washington Post

WASHINGTON - For some time now, the Internal Revenue Service has been shouting from the housetops about its stepped-up efforts to go after tax evaders, protesters and shelter promoters. And while it's hard to assess the impact of these efforts - since even the agency doesn't really know how much tax goes uncollected - there are some signs that the message is sinking in.

For example, earlier this month a 26-year-old man who had been resisting the IRS and making typical tax-protester-type arguments in the U.S. Tax Court to try to stave off collection of more than $3,000 in taxes and penalties, suddenly recanted all and promised to pay his tax, interest and penalties and never to "make these arguments in the future or appear in the (Tax) Court again," according to the Tax Court ruling.

WorldMatch has become the first firm to gain an online gaming licence in Malta following the enactment of new legislation, it was announced at a formal launch ceremony on the island last week.

Describing itself as an “innovative concept” in the online gaming industry, WorldMatch will give the likes of casino operators, airline companies, cruise liners and internet portals access to the gaming sector without any commitment in terms of management, technology, finance or legal matters. The firm has so far agreed six contracts.

By Jay Weaver

A former Haitian National Police commander in charge of law enforcement at the Port-au-Prince airport shook down drug traffickers for tens of thousands of dollars and let them fly cocaine-filled planes to the United States, a criminal complaint alleges.

Romaine Lestin, expelled Friday from the Dominican Republic on a smuggling conspiracy charge, appeared Tuesday before a Miami magistrate judge without a lawyer and did not respond to the charges.

According to a survey conducted by the Eurostat data agency and released on Thursday, Luxembourgers came top of the EU's 'rich list' last year, with the Irish in second place.

Having undertaken a comparative analysis of gross domestic product (GDP) levels per capita in each of the 25 EU member states, Eurostat revealed last week that Luxembourg's residents enjoyed around 208% of the EU average GDP per capita in 2003.

Citizens of the Republic of Ireland came a not very close second, with 131%, and the Danish were revealed to benefit from GDP per capita levels 123% of the EU average.

By Duncan Campbell

From the £7,000 engagement rings in the window of House of Gold in the centre of St Helier to the new holographic portrait of the Queen in the museum, Jersey looks affluent and comfortable.

But beneath the surface the little island that houses more than £260bn of its own kind of gold in offshore banking deposits and investment funds is facing a potentially massive upheaval that has ramifications for tax havens around the world.

By, Richard Daughty

As soon as the G-8 finished hatching their secret plans and drinking all the liquor, they hightailed it out of town, sticking somebody with the bill. Then things really quieted down. To illustrate the point, we cut to the dramatic scene where the hero peers into the dark and hostile surroundings, and says "It is quiet out there" and a voice says "Too quiet" and the next thing you know all hell is breaking loose and there are bullets flying everywhere and the next thing I know a minister is saying, "I now pronounce you husband and wife," and people are shaking my hand and clapping me on the back, and this strange woman is smearing wedding cake all over my face.