Nauru: Real life Kinakuta 162
23mcgee writes "Today's washington Post has a story about a small Island in the pacific named Nauru. After exhausting it single natural resource, geographically remote Nauru is reinventing itself as an offshore banking center that provides it's customers the means to hide their transactions -- an offshore haven similar to Kinakuta, the fictional data haven in a Slashdot favorite; Neil Stephenson's Cryptonomicon. "
offshore confusion (Score:1)
I'm not sure about the US, but us Canadians have to declare any foreign income as well. So I'm confused.
Can anyone enlighten me?
Real and virtual worlds tied together (Score:2)
The Dentist (Score:1)
SIR, ARE YOU FUCKING WITH ME, SIR?
-----------------------------------------------
Or Switzerland for that matter (Score:1)
Many countries are doing this already -- Dubai in the United Arab Emirates is trying to move away from dependence on oil reserves towards, as here, banking and finance, to cite an example off the top of my head. Can this kind of thing work everywhere? Bleed the land dry, then run the economy by skimming cash off other lands?
Re:offshore confusion -answers (Score:2)
1.) Many countries (such as the Cayman Islands) will offer you residency if you purchase property in the Islands. If you've got enough money to hide in the Caymans this isn't a problem. From that point you're a Citizen of THERE, and not of the US and no longer bound by silly IRS codes.
2.) Offshore banking makes it hard for the IRS to prove income. Transactions greater than $10,000 to/from a US bank get reported directly to the IRS. That's not the case in the "money havens", since they are not bound by US law. You could transfer monies to and from your brokerage account (in another country, England maybe? Who knows?) where you could make capital gains on investments, but the IRS has no way of obtaining the information.
Hope this helps clear up the confusion.
Re:offshore confusion (Score:1)
Whoever moderated this... (Score:1)
-----------
"You can't shake the Devil's hand and say you're only kidding."
Re:offshore confusion (Score:4)
I'm not an expert on offshore banking, but I'm pretty sure that if you're drawing a paycheck, you're probably not a candidate.
However, if you have a large income strictly in cash (10s, 20, 50s, 100s), once you find a way to get that cash overseas, without federal knowledge (aka money laundering), you can then safely deposit in your offshore bank account.
There are other situations I can imagine. I'll give your company this contract, at this price, but you have to sweeten the pot with a deposit in this foreign account, and for your own sake you better draw it out of a unaccountable fund (hush fund), maybe lots of petty cash withdrawals, some funky depreciation schedules, oddly priced sales of new equipment, etc.
To use the Cryptonomicon example, a Taiwanese clone maker solds thousands of PC's with unlicensed MW software. All the profits were lost apparently (a good accountant can do this, I know a little of accounting practices, and it seems like fiction writing at times), but they could have ended up in an offshore bank.
In short, if you're a working stiff pulling down a weekly or monthly salary, there isn't much advantage to an offshore bank. If you're a drug dealer/smuggler or high placed government or corporate official, you might have need of sucha thing.
George
Re:offshore confusion (Score:1)
I believe using offshore anonymous bank accounts are generally used for illegal or shady purposes, therefore I don't think tax laws matter all that much. (am I wrong?) The money can't be traced and therefore can't be classified as earned income.
-----
Re:The Dentist (Score:1)
"We hope you find fun and laughter in the new millenium" - Top half of fastfood gamepiece
not a new thing (Score:2)
Re:not a new thing (Score:1)
Even after you get the free toaster?
George
Why this ain't Kinakuta (Score:2)
This would be big news if Nauru decided to alleviate the bank transactions on the island of any international control, including themselves. That was the major point in Cryptonomicon; that the only way to create a true data haven is to put it somewhere outside the influence of any country, period.
That's when it would severely screw up the world's economy, because a perfectly anonymous electronic currency would be untaxable and uncheckable. That is, even by the bank itself, which is not the case of Swiss banks.
And I still think the best place to put a data haven is on the Moon. :)
"Knowledge = Power = Energy = Mass"
Re:offshore confusion (Score:1)
I figure I'll have at least one offshore bank account eventually, but I haven't developed a need for one yet. Or maybe I'm lying about that.
Well... (Score:1)
Heh heh. I could put a penny in a Nauru anonymous bank account, and no one would be the wiser!
Let's just say this bank is not for you and me. They cost more than I had in a bank account my whole life.
"Knowledge = Power = Energy = Mass"
A real smooth talking leader.. (Score:2)
Nauru's president, Rene Harris, also declined to comment on the island's offshore services. "What's it got to do with you?" he asked angrily before hanging up.
The disturbing thing is that after years of Bill Clinton biting his lip and trying to look remorseful, an attitude like that seems almost refreshing.
What happens when... (Score:1)
Slashdot focus (Score:1)
Just a very loose tie-in with encryption.
Rob really needs to reel it in.
Re:not a new thing (Score:1)
Nauru profits by charging fees: for example, $5,680 to establish an offshore bank and as much as $4,980 every year after that to keep the registration active.
.. Or are you referring to something else?
Anyway, $10k to establish a bank is nothing. Am I misreading this?
OS banking (Score:2)
This is a good thing... (Score:1)
slashdot is everything geek (Score:1)
So where do I keep my pr0n? (Score:2)
Though it seems like a lot of the need for data storage in a legally-neutral locale could be alleviated by strong crypto, I still suspect that one day, we'll see something along the lines of vast server farms operating in jurisdictions largely untouchable by traditional institutions of law and order. What might some of the applications be? Aside from the obvious use indicated by the subject
Perhaps when coupled with highly secure (and secret) financial transactions, the black market might find itself with a whole new dimension...
-jay
Tracing Nauru Banks... (Score:2)
From the article:
Tracking Nauru banks is difficult, the State Department report said, because all "have the same post office box." The only visible presence offshore firms have on Nauru may be a wall display in a hallway of the Nauru Agency Corp., where their names are engraved in plastic.
So the trick is to open your own BANK, not just an account with one of the banks...
Check this out:
In 1998, $70 billion was transferred from Russian banks to accounts of banks chartered in Nauru, primarily to evade taxes, Victor Melnikov, deputy chairman of the Russian central bank, said in an interview yesterday...The estimated volume of Nauru's Russian capital flow is so staggering as to strain credulity, some analysts said. In comparison, Russia's total exports amounted to only $74 billion last year, according to the International Monetary Fund.
How about a Bank of Andover/Slashdot incorporated in Nauru?
--diva
Re:Not quite Kinakuta (Score:1)
I wonder... (Score:1)
The big question is... (Score:1)
...will they be using Finux for their datahaven?
W S B - transmitting from the beyond...Re:hehe...bird crap (Score:1)
[sillywiz]
Re:not a new thing (Score:1)
Re:Or Switzerland for that matter (Score:1)
Rick
Some thoughts... (Score:2)
With Switzerland no longer the totally safe refuge it once was for tax exiles, the "instantaneously rich", and other such folk, it wasn't going to be long before someone started up an alternative.
It's a pity that it doesn't sound like it's 100% computerised, complete with ultra-strong encryption, but rather a low-tech system. That leaves it very vulnerable, especially to armed nations, or larger criminal organisations. Even the locals might get a tad greedy.
With electronic currancy, there's nothing physical to steal. This reduces the incentive to level the buildings, demolish the safes, and generally make a mess of the place. Physical storage, though, doesn't have that. There's something to see, something to take, and that is worrying. For them, anyway. Doesn't bother me, as I'll never have enough money to make it worth putting there.
I expect one of three things, in their first 2-3 years of operation: An Island-wide civil war, an invasion by a foreign power (possibly the US, though France has never shown itself as caring of national sovereignty, as the New Zealanders discovered), or a heist that dwarfs Brinks-Matt and the Great Train Robbery combined.
Re: money laundering (Score:2)
One simple way of laundering money is to get yourself one of these anonymous offshore bank accounts, then create a fictitious offshore company that hires you to perform expensive consulting work. You have really hired yourself, but it's hard to tell that's what has happened, and harder still to prove it. So you then submit work records and bills to the bogus company and get paid. Your income appears to be legitimate. Of course, this means you have to pay income tax on it, but at least you get to keep the rest, and you can pass an IRS audit with flying colors.
This is great for relatively small amounts of money (say, up to a few million). There are much more sophisticated games you can play with things like currency futures trading if you really need to launder massive sums.
There was a really interesting book (now out of print) called Power On Earth by Nick Tosches (New York: Arbor House, c. 1986) which covered the story of the Italian banker Michele Sindona, who was reputed to have ties to the Mafia and, by his own admission, knew some pretty shady characters. At one point in the book, Sindona gives a good overview of what money laundering is (and isn't) and several ways it can be done.
Re:Slashdot focus (Score:1)
Re:A real smooth talking leader.. (Score:2)
On a similar note, I don't think it's that different from a state deciding they'll make it cheap and easy to form a corporation, or that they won't charge income tax. Suddenly, all the other states begin losing income as businesses flock to the finance-friendly states.
fossilized bird droppings, Huh??? (Score:1)
Thanks (Score:2)
George
Sterling had it first. (Score:2)
Not to in any way diminish Mr. Stephenson, who is one hell of an author, he was not the first to come up with the concept of the "Data haven". As early as 1988, Bruce Sterling imagined the concept with his Jamaican "Data Pirates" in Islands in the Net [amazon.com].
However, Neil does get points for predicting the right hemisphere.
--
Re:What happens when... (Score:1)
Not Helpful To Us "Wage Slaves" (Score:4)
Offshore accounts are useful in keeping transfers of funds hidden once that money is sitting offshore.
This would be useful for:
In order for the important transfers to remain secret, you'd need to have a whole pile of accounts, some to be used for the "Opaque Transactions," and others to be used for "Transfers To/From Canada."
One account is most definitely not enough, and the action of shifting money is also not convenient.
Ditto for any other situations where you need to have money in Canada to spend on things.
The tax havens are "capital rich," which means that based on supply+demand, interest rates will be low to nonexistent.
The net effect of this is that you don't actually make money off of having money in the tax haven; all you do is to avoid being taxed at home.
The people that would thus care about this might be:
Re:offshore confusion (Score:2)
With an off shore bank account such as this you could earn your money (paying income tax) then transfer it the the offshore account.
From the offshore account you invest it. Intrest earned goes back to the offshore account. No tax's on the intrest.
Yes this would probably be illegal.
I'm being pedantic (Score:2)
And then of course, Nicky Halflinger, computer prodigy, writes a massive tapeworm that protects his adopted community from being cracked as well as breaking into every secret database in the world and releasing it, in 1975's Shockwave Rider, by John Brunner.
George
Re:not a new thing (Score:1)
Nauru vs Kinakuta (Score:1)
numb
?syntax error
No its not... (Score:4)
In a way its a sad story how this country which overspent its natural resources is now forced to prostitute itself to Russian organized crime in order to fund its budget. Not that I am against offshore banking (I am in principle against taxes), but still...
However, if the article mentions that the country has 190 million dollars in a fund left from its wealthier days. Maybe, if the leaders are willing to play "dirty" against the big guys, doing a Cryptonomicum wouldn't be such a bad idea. How much would putting a good pipe to the island (or a permanent sattelite link) cost?
I am doubtful of the realism of Stephensons vision however. If an offshore datahaven were to succeed with causing an upheaval in the western economies, you can bet your ass America wouldn't think twice before the island had a carrier permanently docked in its harbour. Its funny how much influence that can have over a very small country, huh?
I mean, just look what happens when anything threatens the American oil market...
The true datahaven can't be located in some physical place. It has to be nowhere, and it has to be everywhere. It will not gain its security by mountain vaults but by crypography, and it won't secure its existance by oceans but by being dynamic, distributed, and smart. Lately I have seen a few projects in the open source world aspiring towards solutions in this direction (Freenet, the Eternity system) and they are much better news in this front than the existance of roque island states.
-
Security (Score:1)
The system is as secure as the 'distant money centers' are. And it's all electronic.
Forgot to mention: World Income (Score:2)
If you're a resident of Canada, for instance, Revenue Canada considers your income for tax purposes to include all world income, and that includes whatever you might be trying to hide by flowing it through a tax haven.
Thus, if you don't leave Canada, probably taking on residency in one of the tax havens, the avoidance of tax represents tax evasion which is definitely against the law, and possibly a criminal act (as opposed to being "merely civil").
Becoming an International Criminal may not be on the "top ten list" of things to do this week...
Re:fossilized bird droppings, Huh??? (Score:1)
One word: fertilizer.
Re:perl (Score:1)
-----
Re:What happens when... (Score:1)
impounded and have their lines of communication shut off. It's no the same as a ship registry it's got to be a physical place. That's the whole point of a data haven or tax shelter, the way the work is they physically reside in a place with non-disclosure laws, other than that it's jsut a bank. A bank can't function w/o a staff and a phone and a database.
so there
That buys a bit more than you think... (Score:2)
Just a slight difference...
Re:OS banking (Score:2)
If I had substantial assests, I'd be using them to make myself a royal pain in the ass to the powers that be. I'd therefore be concerned about making someone's shit list and having the hammer of civil forfeiture [fear.org] - whereby the state can take anything and everything you own without even charging you with a crime, much allowing you a trial by a jury - directed against me.
Re:Slashdot focus (Score:2)
I thought we got rid of that years ago.
focus! [slashdot.org]
hocus focus [slashdot.org]
Just two quick examples of Rob reeling it in from this category alone.
/. needs focus like I need a real job.
Re:OS banking (Score:1)
Re:What happens when... (Score:1)
But they don't need physical defenses. The bank doesn't exist on the island, and the island itself is part of the U.N. If the U.S. waltzes in and tries to take it over, they'll get themselves into a lot of trouble.
Re:offshore confusion -answers (Score:2)
Sadly, not so.
(disclaimer: don't get your tax advice from slashdot!)
It's a widespread fallacy that countries only have the power to tax their own citizens. Most countries will tax their own citizens on their income, plus they tax all income earned within their country. If you're a US citizen drawing a salary in the UK, you quite often end up paying two lots of tax. Yopu have to hope for a favourable "double taxation treaty" to rescue you. It's never this simple.
As noted below, offshore havens are of use to people who have substantial sources of income other than paychecks . . . .
jsm
Not Neal Stephenson! (Score:2)
Re:offshore confusion -answers (Score:2)
> From that point you're a Citizen of THERE, and
> not of the US and no longer bound by silly IRS
> codes.
Dream on. I am working here, and I am a citizen
of another coutry, and paying taxes like anyone
else. I suggest to read the appropriate IRS docs
otherwise you are in trouble. Even worse, I pay
three times higher taxes that you on certain
income (the so called "Income not connected with
US business") unless this money goes directly
outside US, for example business deals in my
country and deposited in my country's bank
acount. But in that case IRS does not care anyway.
Also if you lived in US for more that four
years, you are treated as a US permanent resident
for tax pusposes, altough you are screwed as
a foreigner in any other way. When Uncle Sam
wants his cut, nothing can stop him from coming
up with any law that surves the purpose.
> transfer monies to and from your brokerage
...
> but the IRS has no way of obtaining the information.
Worse, each brokerage transaction gets immediately reported to the IRS, not just transactions above 10 grands. Even if you keep money cash, not in stocks, the broker keeps them in a money market account. Where else this interest comes from?
If you really beleive in what you said, and are doing this, I suggest that you get the he.. out
of US before IRS raids your business. You can read
the Senate hearing if you don't believe me,
I just forgot the url with the horror stories.
Best,
Common way to build revenue (Score:1)
At least one of the ex-Soviet states attempted to set itself up in this way. Naturally, there are also the Caribbean islands with confidential banking laws and low (no?) taxes. I believe it's a reasonably common method of building revenue.
Unfortunately, one problem when attempting this is the confidence issue. People are very confident that Switzerland will remain, with no major changes to its banking policies. It's much harder to predict the actions of a small nation that has just initiated this sort of policy. The stability and reliance on tradition hasn't been demonstrated. You really don't want the state to start revealing information (or nationalizing assets!).
Naturally, this won't keep all money out. It's also likely (as Neal [cryptonomicon.com] said) that a higher portion of early adopters will be doing something shady. This gives these small states an opportunity to demonstrate their commitment to their policies, especially if larger states [usdoj.gov] fail to pressure the state for information or other violations of policy.
Re:offshore confusion -answers (Score:2)
Now, there are two ways to go about this. If you're a criminal type, of course, you don't much care what the US government thinks. And you're probably not getting too many of those drug, prostitution, and illicit gambling charges on VISA, these are in cash. Which, of course, is smuggled out of the country hidden in dolls or coffins or whatever, at least according to most of the gangster movies I've seen.
The other thing is to actually become a citizen of a tax haven and remain a non-resident of other countries. An actual case of this is Irving Gould, onetime principle owner and Chairman of the Board at Commodore. At some point in time, he moved to the Bahamas, real house an everything, and I assume became a citizen. But he had to be careful about being percieved as a resident of any country. So he actually had people who kept track of how many days he spent in any given country. For example, it was not uncommon for the PET Jet to circle until after 12AM, when old "Uncle Irv" was coming into the US, just so that fraction-of-a-day couldn't be held against him in US tax court. In other words, maybe a bit shady, but all perfectly legal.
I don't supposed you would do this until you're making enough money to have that kind of lifestyle, but that kind of goes without saying. Most offshore accounts offer little interest, charge high fees for transactions, require opening deposits in the $10-$25 range, etc. It's not likely to attract the typical working stiff, even if you're a contractor or some-such getting lots of payments in cash. On the other hand, a millionaire with lots of foreign income and fewer scruples could well go for such a thing, profitably.
It'll probably only get easier, with the e-banking and e-trading. There are already US-based companies specializing in setting up foreign investors in US stocks and bonds, and it probably won't be long until US folks have the same online shot at some foreign securities. Now, when you're doing the electronic transfer to your bank in New Jersey for that killing you just made on the Newer Markt, ole Uncle Sam will be there to congradulate you. But all you'll hear from that Caymans' bank is the $50 (or whatever) deposit fee.
Which just goes to illustrate the old point that the rich do, in fact, get richer.
Re:What happens when... (Score:1)
"Lord knows we need the world to be a lot more like that. "
all I meant by that is alot of us here on slashdot enjoy a fertile imagination, if the world was more like cryptonomicon it would be:
A. Not so banal
b.Funny
c. Have data havens
why don't you check who's afraid of reality when you can't put a name to your silly little comments.
(sorry to the rest of you. just can't stand people who get off on ruining others good times.)
Re:Real and virtual worlds tied together (Score:2)
Unless you go through illegal channels of course. But money laundering is a very expensive business -- if someone had a laundering scheme which would provide an "anonymizer for cash", and you ended up keeping 48% of the money, then that would be regarded as a very efficient scheme indeed.
In general, havens are not usually worthwhile for straightforward tax avoidance -- they're more for your Kalashnikovs and Kokayne/IMF loans crowd.
And if you're paying 52% straight down the line, I can probably give you the name of a man who could save you some.
jsm
Re:offshore confusion -answers (Score:1)
Re:What happens when... (Score:1)
like when the us waltzed into grenada?
or panama?
The un can't do anything. The un is a figure head.
the us doesn't even pay it's dues. The us can't get into big trouble becuase without nato there is no un.
regarding the fact that the bank isn't even there, explain that to me and I'll shut up.
there is a long history of one country blockcading or invading another for financial reasons. If you asked carl marx that is the only reason.
but you can't ask him cause he's dead.
Re:not a new thing (Score:2)
No, but there's more to it than the Post put up. US$10K is the administrative fee to set up the bank. If you want to use your bank for any actual banking business, then you would have to pay in capital of about US$1mn, or nobody but nobody would deal with you. If you didn't want to do that, but wanted to use the bank as a front company for tax-driven transactions, you'd still probably have to stump up, in order to fall outside the "thin company" regs.
So $10K would basically buy you a brass plate on a wall (brass plate and rental of wall extra), and the right to call yourself a "bank" which can be useful if you're planning any Nigerian advance-fee frauds. Or if you're laundering money on the cheap, and just want to extend a paper trail (rather than being concerned to create a bank which can carry out transactions with any appearance of legitimacy).
But for that privilege, $10K is indeed cheap. Which is why I would guess that "Incorporated in Nauru" will soon become the best way known to man to get yourself blackballed from any reputable banking system.
jsm
Re:offshore confusion -answers (Score:1)
The US is actually quite unusual in taxing its citizens when they work in foreign countries, although there is a $70,000 exemption (no tax paid on earnings of less than $70,000 while employed overseas). As a Finnish citizen, for instance, I don't have to pay any Finnish taxes on income I make abroad, as long as I spend at least 180 days outside the country per year. (This made quite a difference in Japan, where I paid 6% Japanese income tax instead of ~45% Finnish income tax.)
And again, the above paragraph is a simplification of 17,000 pages of international tax code, so don't put all your money in a Nauruan bank account based on this...
Cheers,
-j.
Re:Security (Score:1)
Finding those sneaky banks (Score:1)
Damn, well I guess they can just use the CIA maps...no wait...yup we're screwed.
But seriously folks, banks don't launder money, people launder money. If you make offshore money havens a crime, only criminals will have offshore money havens.
Ok, I'm done now.
--
Re: money laundering (Score:3)
Ahhhh (this used to be my life, a few years ago). I'm sure that Mendax would like to remind all slashdotters that this is an illustrative example only, and that it should not be tried at home.
The phrase you can pass an IRS audit with flying colors is used here rhetorically -- actually, a half-competent auditor would tear you to shreds if you tried this "thin" scam on any significant tax liability. Real tax avoidance schemes are a lot more complicated and require [ahem] godlike genius consultants to design them (particularly if you want to have a chance of them being declared legal).
Oh yeh, and people who "go to Vegas, buy a load of chips and then cash them in without gambling" get to learn a fair amount about both the IRS and the Secret Service before long. The casino companies have a troubled enough relationship with Lily Law without acting as willing accessories to avoidance or worse.
If you're really interested, the locus classicus is "Secret Money" by Ingo Walter.
jsm
Attention Leaders of Third-World Countries!!! (Score:2)
Then come join the thriving business of MONEY LAUNDERING, or, as we like to call it, Helping out the less fortunate! Come join the hundreds of other third-world countries as they too pick up on what the "economy" is REALLY about! Within months you too will be lying in mountains of money, smoking your Cuban Cigars, surrounded by beautiful women in bikinis!
What's that? You say the rest of the country is angry that you're holding on to all the profits while they're still poor? Well, if you respond to this add within the next 30 minutes, we'll throw in, ABSOLUTELY FREE, a pair of genuine, bona-fide mafia hitmen, voilin cases and all! Now, you too can sit back and relax to endeavor in your mounds of cash while you hear sounds of bones breaking and screams of pain from the next room!
Supplies are limited, order today!
Is this going to be the wave of the future? Once we've sucked the Earth dry of it's resources, we'll move toward starting other business practices that aren't so "legal?"
Other ways to make money (Score:2)
Even More Obscure Banks (Score:1)
Tax Evasion for Dummies (Score:4)
Example #1, let's say that you run a company worth $500,000,000. Now let's say you want to give yourself a "raise". You hire a "consultant" who happens to bill you to an account fron one of these offshore banks in the amount of $10,000,000. Your company sends the money for "work rendered" and wow, that's odd your company just sent those ten million dollars to YOUR secret account and you've just evaded taxes on $10,000,000.
Example #2: you run a profitable "business" from traditional organized crime, or large-scale drug dealing, or assassinations or even working as $5,000/day call girl. Now you have a whole lot of money and if you legitimize it within the U.S. you'll end up with a lot of taxes on it. But what if this money gets deposited to your offshore account? Well, now suddenly there are no taxes involved. Neat, eh?
As for the laws about foreign income, the IRS even admits it's basically honour system. There's no way to trace this so basically as long as said random rich person reports enough income to be credible, they can hide the rest without fear of the authorities find out. After all, there isn't a real difference in lifestyle between somebody who makes $100,000,000/year and somebody who makes $10,000,000/year, so you hide $90,000,000 and report that you make $10,000,000/year and meanwhile become worth billions without taxation difficulties.
Re: money laundering (Score:1)
>trip to Vegas, get $xxK in chips, gamble a
>little, then cash in, thereby getting new bills.
Hmm, have you tried this?
I can't find the post, but I distinctly remember a past comment on
where the poster was pretty definite that the second or third time you tried this,
there were FBI and/or Treasury agents around Vegas who would call you in for a nice chat
about why you weren't gambling.
I have no knowledge either way, but that caution sounds pretty plausible to me.
Poor communications (Score:2)
The Nauruans got burned once, when they sold all their birdsh1t to foreigners. They got rich quick, then got poor again just as quick. Poorer than when they started, since their island seems to have been deforested in the process. I'd expect them to be cautious going into a venture like this one.
If there is are fortunes to be gained by this, and if the Nauruans can use it to improve their lot and that of their children, more power to them.
Re:Or Switzerland for that matter (Score:1)
Dubai, of course, is not a poor country -- the "banking and finance" they are moving towards is based on fifty years' worth of investment of their own oil profits, and they will certainly not be screwing around with money laundering (although they probably will have strong banking secrecy -- Gulf State accounts are usually highly secretive, mainly because they're so big).
In general, when you see an annoucement like this, it's because some chancer in New York, London or (all too often) Vancouver has sweet-talked the local government into letting him run his pet scheme from there, kidding them that they will have a thriving financial sector. The money never, ever shows up in the local economy, apart from a few bribes to the Finance Minister.
jsm
Re:The fed govt to me is just another company... (Score:1)
Use The Backhoe, Luke! (Score:3)
"We can't get at the money or data, sir! It's all hidden underwater, at the other end of this big
jsm
focus!@#$!# (Score:3)
OS Banking and why.. (Score:1)
I figured I would give an example.
Lets say you have a stock acct in the US with 200,000$ in it as well as a savings acct with 50,000 in it. The people
that use the OS accts have money like this. If your average return on stocks is 30% and your average return on
savings is 2% then you have an income of 60,000$ a year in stocks and 1000$ a year on savings. This means that
you have a total annual income of 61,000$. The US government is going to want there cut of your hard earned
money, (22%) 13,420.00$, come tax time. This will leave you with 47,580$ after taxes..
Now lets say you have a OS acct. You do your stock trading from your OS acct and keep your savings in an OS acct
as well. The US government does not see the income as a US income. There for you get to keep the 22% and not
report it to the IRS. That is an extra 13,420$ in your pocket. That is also worth the trouble of keeping the money
outside of the US.
There are other sides to this such as you can trade stocks, bonds, and currency in any country in the world, as well
as growth funds, and living funds offered by the bank.
Hope this helped some one..
Shameless plug (Score:1)
Many ppl want an offshore account but get knocked back, or dont know how to go about it. This makes things easy...
http://www.exxcomm.com/ [exxcomm.com]
Re:Use The Backhoe, Luke! (Score:1)
Re:Tax Evasion for Dummies (Score:1)
Hmm...this makes me think... How much do you figure ole Billy Gates has tucked away in offshore accounts??
Just a thought.
Ender
Re:not a new thing (Score:1)
www.exxcomm.com
did you know 2/3rds of the entire planets transactions are made offshore?
Offshore != illegal
Re:Other ways to make money (Score:1)
Re: money laundering (Score:1)
Re:The Dentist (Score:1)
Beer recipe: free! #Source
Cold pints: $2 #Product
links to Freenet or Eternity System anyone? (Score:1)
Im interested in this datahaven concept... it has to be everywhere.. like a vast distributed filesystem with quotas based on storage capacity and bandwidth?
I havent read cryptonomicum... on the todo list now
Re:not a new thing (Score:1)
My plan is nearly to fruition... Bwahahahahaaaaa!
Beer recipe: free! #Source
Cold pints: $2 #Product
Re:I'm being pedantic (Score:1)
Couldn't tell you... it's been years since I read Neuromancer. My point was not that Sterling was the first to come up with it, but that he was using it before Stephenson. Perhaps I should I have stated that better... but I was going for a little controversy in the post title. :)
--
So? (Score:1)
get rid of the standing army.
No war - no army
Problem solved.
Re:What happens when... (Score:1)
The U.S. would have to dissolve the island nation or seize political control of it in order to have direct control over the laws which permit the bank to exist. If you recall, the U.S doesn't even do such things to non-member nations. There are some rules which they do take seriously... for instance the one which prevented them from taking Saddam out of Iraq... which I believe is part of thier constitution.
Despite the instances you describe above, I think the U.S. does not think lightly of attacks on U.N. member nations... much less toppling their governments and taking control of their banks.
As for the physically existing in any significant capacity on an island with a weak communications infrastructure and limited access by air... that's just silly. They probably operate much like cruise ships. Offices all over the world, but they pay taxes and work by the rules of foreign governments. It's even covered quite clearly in the article:
do they? (Score:1)
A very small number (Read: The vocal Minority)
seem to be nationalistic, but somehow I doubt the
vast majority is. They have money and basically
free income...why should they care?
How many people outside of congress and a few
right wing public "Congressional Wannabee" nuts
really care about flag burning and Clinton's
blow jobs?
top level? (Score:1)
or importer then.
Certainly a good buisness tho...I doubt it you
were REALLY a a cannabis suplier who had enough
money to need to use offshore acounts, you would
post on
maybe you would...but I doubt it
Though if you are...
your service is greatly apreciated by those
of us who love the product
(course any marijuana I would get tends to
be the more quality stuff so is probably grown
local in a small garden...so I doubt I would
see any of your suposed stuff)
Nauru vs. Tuvalu: a study in contrast (Score:2)
Like Nauru, tuvalu is a tiny pacific island, the world's 4th smallest nation. [tsx.org] Population : 10,000. When the internet boom began, tuvalu stood to make a fortune on the domain name trade - it's
What happened next was a sad tale of how a pacific nation, remote and unaware of the existence of the internet, was swindled by domain name sharks.
First, webTV grabbed admin. control of the
Good wired story here. [wired.com]
Next, VCs and domain name companies descended on the remote island, courting the confused govt. Ultimately, Tuvalu signed a deal with a Canadian company, which failed to deliver the $50 million it had promised in a year (that's 10 times the country's entire GDP). Sad story. [cnnfn.com]
Now Tuvalu, wiser and bitter, is still looking for a company to administer
If only they could be like Nauru, with its offshore banking, or Niue, which hosts tons of porn on the
I felt particularly sorry for them because they are so naive and quaint. It's a custom on the island to apologize if you walk past someone sitting, since the level of your head is higher than theirs. And hey, you can climb on top of the local church if you ask permission from the pastor. They're so naive their web site [yahoo.com] is a Yahoo Club.
Poor Tuvalu. Maybe the linux community can help them out by hosting their domain thingie and transforming their island.
w/m.
An easy model for a Data Haven. (Score:2)
1. Client side encryption. This way you as the provider of the service can not be responsible for the contents, since you have no way of having knowledge of the contents.
2. Multiple locations. Governments change, with that policies change, though this is a good thing in a democracy it might adversely affect your business.
3. The possiblity for VPN so that people can make online changes.
4. The possibilty to store and make available huge amounts of tapes, since the bandwith of a truck loaded with tapes or disks is still unsurpassed.
Basically, this has been done for years by back-up companies. What they need to do is link their sites through a network and make sure that the locations are identical. This way it is almost impossible for a government or even a combination of governments to take over the system. (I thought I read about INTEL entering this market, but I couldn't find the URL on Wired. Anybody got the article on that for me?)
www.nic.nu (Score:2)
Porn isn't uch a big deal (Score:2)
Re:Why this ain't Kinakuta (Score:2)
Don't get your hopes up... (Score:2)
All it does is make sure that even less of the top
Re: money laundering (Score:2)
Well, the first thing he would do would be to ask you "who owns this company?". If you answer "I don't know", then you have just committed a very serious offence indeed. Depending on circumstances and jurisdiction, the guy may be able to subpoena your lawyer or accountant and force them to grass on you. He can certainly have your house searched for the particulars of ownership. And your bank will usually want to know the background of the offshore company it's dealing with before accepting transfers, which is information it will give up without even protesting.
Your example is absolutely fine in principle. But you have to add a lot more layers of the same thing (so that you can make it much less likely that the auditor will ask you or your friends a killer question) to make it work in practice.
Is this a minor glitch on your part
Yes, sorry. I realised halfway through the post that I didn't want to imply that I'd ever designed laundering schemes. What I did were tax avoidance (!=evasion, although the IR didn't always agree) schemes. But although your objective in these schemes is always that they be legal, there's always a temptation to add a few layers of "security through obscurity", which is the same sort of thing money launderers do, so one gets a fair enough feel for what will and won't work.
jsm