Introduction - We are no longer opening Panama corporations, foundations or bank accounts. We are also not using any of the tax havens for our clients banking anymore. This is because the offshore banking legal environment is changing rapidly. Hong Kong, Singapore, Switzerland, Lichtenstein, Luxembourg, Austria, Andorra, Jersey, Gibraltar, Isle of Mann, Cayman Islands, and ALL the other jurisdictions have agreed to enter, or have said they are in the process of entering, into TIEA (Tax Information Exchange Agreements) This concept involves signing cookie cutter treaties with 82 nations in the OECD (Office of Economic Cooperation and Development). This is not just affecting the USA. Even before the treaty was signed, in mid-June 2009, Hong Kong had its police issue a warning declaring that placing money in banks to avoid taxes is a criminal action. This is very serious, unlike anything ever seen during past crackdowns. As a matter of fact the OECD now considers all countries and jurisdictions cooperative.

The Tax Information Exchange Agreements – The OECD protocols allows for information sharing in cases of "suspected" tax evasion. We are not talking crimes here--no proof of a crime is required. In fact, nothing specifies what would be probable cause to gain this information and each request is individual. It appears to be discretionary or, in other words, any excuse or cause can be a reason. Conceivably, a country could submit thousands of requests per week for privacy-violating information. The government could then ask their bank to reveal who the beneficiary owner and signatory are on the account as well as all bank statements for last few months or even further back. This is information sharing, not freezing of accounts. They are now working on asset forfeiture as a secondary step to the tax information sharing agreements.

The banks will, as a rule, will not reveal the request for information to the client. This is considered "tipping" and can be a crime in some countries, like we see in Hong Kong. If, upon receipt of the information, the government responds back to the country where the bank is located, saying that there was a case of tax evasion, then the subsequent offense would be money laundering. As a result, the bank account could be frozen to allow the "victim" country to collect their losses through the courts in the respective countries.

What Hong Kong Did (June 2009) – This is a summary of the memo the Hong Kong Banking Superintendent sent to the CEO of all their banks this past week. This occurred before the new treaty, which Hong Kong vehemently intends to sign, has even been signed:

In a letter addressed to the CEOs of all Hong Kong licensed banks, Karen Kemp, the director of Banking Policy for Hong Kong, said that accepting money that is being secreted to accomplish tax evasion, even from a foreign jurisdiction, is a crime. The Hong Kong banks are expressly directed not to assist any entity avoid any kind or degree of taxation from any jurisdiction in the world. If a Hong Kong bank does so they may be found guilty of money laundering. Further, they would be in danger of losing their banking license because now they would not be found to be a fit and proper bank according to the standards of Hong Kong legislation.

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