================================================= Expat Worlds Bi-Monthly Digest ================================================= 7 July, 2004 Vol. 6, Issue 10 .....IN THIS DIGEST..... ==== THE STORY =================== -=Financial Privacy - You Ain't Got None=- ==== OTHER EZINES ================ ==== EW SPECIAL ================== -=Western European Bank Account=- ==== HUMOR, TRIVIA, NEWS AND MORE... == -=Trivia=- -=News Story=- -=Traveller's Tales=- -=Jokes=- ==== THE RESOURCE TIP ============= -=WorldTime 6.5=- ==== INSIDE THIS MONTH EXPAT WORLD == -=Table of Content=- ==== THE STORY ================================== FINANCIAL PRIVACY YOU AIN'T GOT NONE! (Part 1) Trying to go about life while maintaining financial privacy is a lost battle for most Americans as well as others in developed countries around the world. Thank God for 3rd world countries! As we have said in previous issues of EW, U.S. Common Law defines no expectation of financial privacy. Indeed, it may constitute money laundering for US persons to seek financial privacy and/or protect their assets from the government.. The following remarks by EW are for informational purposes only and are written for Americans but may well apply in many other countries. As always, the newsletter does not endorse any asset protection scheme that requires conduct that could be defined as criminal. Its brevity is intentional for the full text of these "rules" takes volumes. For persons who do not wish to do business with the State, options are limited, none are perfect, some may be closed down but the clever rascal can still do business without the State being privy. That said, let's get on with: CASH It remains possible to conduct private financial transactions using cash. Yet as EW said earlier in our FinCEN article it is a crime to use cash to avoid FinCEN. Certain transactions subject to the U.S. Bank Secrecy Act must be reported to the IRS, Treasury and/or Customs Department. A transaction of two or more related transactions exceeding $10,000 in cash (and in certain cases, other monetary instruments) is reportable. Any declaration that separate transactions are related makes them treated as a single transaction. Two significant exceptions to cash reporting apply. The General Instructions for IRS Currency Transaction Reporting Form 8300 for trade and business, "Exceptions," state: Cash is not required to be reported if it is received ... in a transaction that occurs entirely outside the United States ... [or] in a transaction that is not in the course of a person's trade or business. An example of this "not in the course of a person's trade or business " is: if you own a flower shop and you sell your automobile for more than $10,000 in cash, you would not submit a form 8300 for that transaction. Therefore cash transactions of any size between parties not engaged in "trade or business" appear non-reportable. FUNDING Moving money internationally usually leaves a "paper trail" and is not private. BUT once funds are abroad they may be reclaimed with MUCH greater privacy. Why do you think the US doesn't publicize or encourage US citizens to have a foreign bank account although it is perfectly legal for them to do so! Small amounts of cash and monetary instruments may be moved privately across U.S. borders. U.S. law requires any person transporting, causing to transport, or mailing more than $10,000 in cash or certain cash equivalents, or an equivalent amount of foreign currency, across a U.S. border to declare that fact on Customs Form 4790, "Report of International Transportation of Currency or Monetary Instruments." While making an unrelated series of such transactions, each $10,000 may not constitute "structuring" under the Bank Secrecy Act. This limit makes relocating assets in this manner impractical or requiring the patience of Job. It should be noted that transfer of funds through normal banking procedures of amounts over $10,000, which does not involve physical transportation of currency or monetary instruments does not require it being reported by you manually (the bank will do this automatically with or without your consent). MONETARY INSTRUMENTS These are: coin or currency of the United States or of any other country, travelers' checks, money orders, investment securities in bearer form or otherwise in such form that title thereto passes upon delivery, and negotiable instruments (except warehouse receipts and bills of lading) in bearer form or in such form that title thereto passes upon delivery. U.S. Customs strictly enforces these reporting provisions. Customs may seize all unreported cash or cash equivalents, including the balance of monies under the reporting limit. United States v. $11,580, 454 F.Supp.376 (M.D. Fla. 1978). Many foreign recipients will not accept cash payments from unknown person and may be required to notify government authorities when cash is received. (No worry here mate! - EW) When moving money, it is best to avoid U.S. $100s. Counterfeit $100s are widespread, including the newest series with the enlarged portrait. Some hotels, banks and merchants outside the United States refuse $100s. Use $50s or smaller dominations or another currency. (Singapore dollars has S$5000 notes readily available (+$3000 USD equivalent) which make transporting physical cash a lot less bulky) "Monetary instruments" that do not require reporting are: bank checks, travelers' checks and money orders made payable to the order of a named person, which have not been endorsed or which bear restrictive endorsements. A restrictive endorsement is one where a third-party payee is named in the endorsement. The third-party payee may or may not be willing to accept such payment. A check made payable directly to a foreign recipient will eventually "disappear" in the sense that the paper or electronic trail ages. However, banks in all jurisdictions keep records of cleared checks, and a trail is also created through the clearing process. Certain valuables can be used to transport wealth internationally. For instance, numismatic coins and jewelry are not monetary instruments. Once removed from domestic jurisdiction, the valuables may be stored for safekeeping or converted to cash and/or securities. US gold coins like the $20 gold piece are still legal tender and are valued at $20 as such, but in the "real" world they sell for +$500. Accounts receivable can be marketed internationally and funds paid conveyed to a foreign recipient. Names of companies willing to purchase receivables at a discount (factoring companies) are published in sources such as The International Herald Tribune and the Financial Times of London among others. All cash U.S. dollar transactions, wherever they occur, clear through the US Federal Reserve. Therefore foreign investments denominated in currencies other than US dollars effectively avoid U.S. in rem jurisdiction. The mere transfer to or through a U.S. bank of the alleged proceeds of a crime or property deemed to facilitate a crime may subject the entire transfer to confiscation. This is true even if neither sender nor recipient are subject to US jurisdiction and the seized funds represent the proceeds of activity outside US territorial jurisdiction. United States v. Daccaret, 6.F.3d 37 (2d Cir.1993). A debit card drawn on a non-U.S. financial institution and settled with offshore monies is one of the best ways to move money without a paper trail especially if the debit card is associated with an anonymous secret account. This CAN be had - ask for info on Expat World's "Lifeline anonymous ATM card!" NON- REPORTABLE FOREIGN INVESTMENTS U.S. law requires U.S. persons holding more than $10,000 in "foreign financial accounts" to report their presence on Schedule B, line 11a of their federal income tax return, and file a separate information return to Treasury. Schedule B must be completed for the purpose of reporting foreign accounts, even if interest and dividend income is less than the threshold for completing it. "Willful" non-compliance may result in criminal prosecution. Treasury Form TD F 90-22. 1, the "Foreign Bank Account Reporting Form" is submitted to a Treasury Department intelligence center in Detroit and conveyed to FinCEN. Instructions for this form read, in part: Who Must File a Report? Each United States person with interest in or signature authority or other authority over bank, securities or other financial accounts in a foreign country, which exceeds gate value ($10,000) at any time during the calendar year, must report each calendar year by filing Form TD F 90-22.1 with the Treasury on or before June 30, of the succeeding year...F.. Bank, Financial Account. The term "bank account" means a saving, demand, checking, deposit, loan, or any other account maintained with a financial institution or other person engaged in the business of banking. It includes certificates of deposit. The term 'securities account" means an account maintained with a financial institution or other person who buys, sells, holds or trades stock or other securities for the benefit of another. The head of the IRS International Compliance Office has stated that tax returns indicating foreign transactions are always reviewed to determine if they warrant further investigation. EXCLUDED FROM REPORTING Several types of investments and holdings appear to be excluded from reporting if they are purchased without opening a "bank, securities, or other financial account" or using such an account to maintain custody. They include (1) real estate; (2) safekeeping arrangements; (3) insurance policies; and (4) securities. However, even a mere book entry in a foreign corporation is an "other financial account" within the meaning of Instruction F if the foreign entity transmits or disperses funds or otherwise functions as a bank on behalf of the holder of the account. United States v. Clines, 958 F. 2d I 1 82 (11th Cir. 1992). Real estate. A U.S. person's holdings of real property in a foreign country are not a "foreign bank, securities, or other financial account" as define in the instructions for Schedule B of IRS Form 1040 or Treasury Form TD F 90-22. Safekeeping. Valuables or documents purchased outside the United States and placed directly into a non-U.S. safety deposit box or private vault likewise do not constitute a "foreign bank, securities, or other financial account." Safety deposit boxes are available at many foreign banks. Opening an account may be required to rent one. (not always, EW note). Such an account may become known to global intelligence agencies such as FinCEN. To avoid having to personally visit the box each time valuables are to be added or removed, the boxholder may give an attorney or other trusted intermediary a limited Power of Attorney or other legal authority to perform this function. Non-bank safekeeping is also available in many jurisdictions. Such depositories, not being financial institutions, are subject to fewer record keeping and disclosure requirements. Some vaults permit anonymous safekeeping arrangements. Insurance contracts. Foreign insurance policies do not appear to be "foreign bank, securities, or other financial accounts" and are thus apparently exempted from annual reporting by U.S. persons. However, U.S. persons purchasing foreign insurance contracts must make a one-time filing of IRS Form 720 and pay a one-percent excise tax. Under U.S. law, income accumulating within a life insurance contract, single-premium or variable annuity is tax-deferred and non-reportable. Right now this is a big loophole to keeping some of your financial privacy Foreign annuity contracts may be held in a U.S. retirement plan. A domestic retirement annuity may be rolled over into a foreign annuity in a tax-free exchange. The annuity certificate must remain in the United States. This makes the contract subject to U.S. in rem jurisdiction and essentially eliminates its privacy and features. A properly worded contract may make it possible to deal with this problem if a receptive U.S. custodian can be found. Securities. Foreign stocks, bonds, or other securities purchased directly from a foreign issuer, without opening an account, do not appear to be reportable by a U.S. person as a "foreign bank, securities, or other financial account." Bearer securities are private. An issuer will recognize the physical possession of its bearer securities as their owner without further inquiry Non-dividend paying bearer shares and zero-coupon bonds, shares or coupons appear to not need be reported. Bearer shares or bonds at more than $10,000 must be declared at U.S. borders. KEEP THEM STUPID The US government's position, surely denied if asked, is that they don't want the general public to know about doing their private financial business overseas. They do this by establishing a slew of US laws that hinder foreign fund managers. No law prohibits U.S. investors from buying foreign securities, but managers of most foreign mutual funds discourage direct investment by US persons to avoid U.S. jurisdiction. However, no U.S. jurisdiction is established if an offshore firm merely answers an unsolicited inquiry or accepts an unsolicited investment. Inquiries made from non-U.S. addresses and from non-U.S. entities (e.g., foreign corporations) often receive more favorable consideration. There you go readers. They are the rules and regulations one has to play by if one wants to keep from being a criminal in the eyes of Big Brother. One area we left out is the use of an asset protection trust for financial privacy. We will do that another day. NOTE: Part 2 will be in next EW Digest issue. So stay tuned. ==== OTHER EZINES =============================== ASIAN TIMES ONLINE Asia most trusted source for news, business,commentary and analysis from throughout Asia and our world. (www.atimes.com). ----- Subscribe now to the "Timely Time Management Tips" newsletter. Free tips sent to you to help you get more done in less time, with less stress. Send your email now to: mailto:timemanagement-subscribe@topica.com ----- japan-guide.com Extensive, up to date online guide on Japan living and travel related information. http://www.japan-guide.com/ ==== EW SPECIAL ================================= WESTERN EUROPEAN BANK An Account with Internet Banking and a Visa Card! Here at Expat World we do the impossible. We are now able to get you a personal account at a major Western European Bank based just on a copy of your passport. We've been asked by many of our readers and client's if we can do this and have now plowed through the almost impossible post 911 hysteria to find a bank with a reasonable attitude. Before you become suspicious this account is NOT with the former Eastern block bank in Latvia, Estonia, Hungary etc. It's a 5-star bank complete with internet banking access and a Visa card which has branches located throughout its home country and other EU nations. For details go to and select SPECIALS from the top menu or email us at office@expatworld.net with "Western Europe Bank Info" in the subject heading. ==== HUMOR, TRIVIA, NEWS AND MORE... ================ NEWS STORY Japan Firm's Chip Tells Mom if Kids Out of School TOKYO (Reuters) - Forget the notebook and the multicolored pen, a Japanese firm has developed the latest in school supplies -- chip-embedded student ID cards. The cards make it easier for parents to keep tabs on their youngsters, said Toru Hasegawa, a spokesman for software firm NAJ Corp, based in western Japan. Students scan ID cards on passing through the school entrance and the time is recorded and sent via email to their parents' mobile phones or computers, he said. Parents are also alerted if their child fails to arrive at school. The same happens when school is over, so parents know when to expect their children to arrive home, Hasegawa said. The system, which will go on sale in August, was conceived in response to growing concern about violence in Japan, he said. "Being able to quickly get the information that their kids are leaving school is a relief for parents," he said. Japan has long prided itself on being relatively crime-free but has been horrified in recent years by increasingly violent crimes committed by ever-younger children. Despite safety worries, many education-obsessed parents send small children to late-night cram schools. It is not unusual for primary or junior high school students to be returning home at 10 p.m., Hasegawa said. --- Teachers face fine for failing students The Bangladeshi government is considering stopping the salaries of teachers in 50 schools where not a single pupil passed the national leaving exam, the official news agency BSS said Tuesday. Teachers at the schools from six districts would be made to "face the consequences" for their pupils' "dismal" performance, BSS said. The Ministry of Education said it planned to take disciplinary action against the teachers and might also stop their salaries, the report said. The names of their schools would also be added to a government "blacklist". The secondary School Certificate exam is taken by pupils aged 16 at the end of their final school year. --- Police, fire, ambulance, or lover? MALAYSIAN men looking for love have resorted to dialling the 991 emergency number in order to chat up female officers. Last year, a whopping 98 per cent of the 671,667 calls that came into 991 were not genuine, Civil Defence director-general Jamel Ariffin was quoted as saying by the New Straits Times. And from January to May this year, as little as three percent of the 221,622 calls to 991 were genuine, Jamel said. The rest were mostly from men who wanted to chat, while other non-emergency calls were made by children and pranksters, he said. The number of non-emergency calls was on the rise despite a campaign by the Government to educate the public against misuse, he said. ----- TRAVELLER'S TALES DOGGONE: A woman in China was worried that her husband's beloved dog would mess up her newly decorated apartment. So she kept taking it far from home, hoping it would get lost. But the clever wolfhound always managed to find its way back, Xinhua reported. Xiao Fang, a proud homeowner in Nanjing, decided to take inspiration from the movies. She hired a group of hit men to "take the dog out." When the husband returned and discovered that his dog was dead at the hands of contract killers paid by his wife, he declared that he couldn't share a home with a "murderer" and filed for divorce. This story has a such a powerful lesson to it. Home is where your loved one and your pet are, not just a showroom for designer furniture. ----- Oxymoron: Private e-mail ----- You have to be kidding me...we are at war, living in fear and if our government needs to lie to us to protect my family, they can lie to me all they want. Enough of your liberal crap, unsubscribe me immediately. -- Mary B. ----- "Without nipples, breasts would be pointless." -- Anonymous ----- Bill Clinton and Al Gore are sitting in a diner. The waitress says, "Ready to order?" Clinton says, "Yeah. I'd like a quickie." The waitress says, "A quickie? Mr. President, I don't think that's a real good idea. I'll come back when you're ready to order from the menu." Gore leans and says, "It's pronounced "quiche." ----- Warning signs that you might need a different lawyer * You met him in prison. * During your initial consultation he tries to sell you Amway. * He tells you that his last good case was a Budweiser. * When the prosecutors see who your lawyer is, they high-five each other. * He picks the jury by playing "duck-duck-goose." * He tells you that he's never told a lie. * He asks a hostile witness to "pull my finger." * A prison guard is shaving your head. ==== THE RESOURCE TIP ============================ WorldTime 6.5 Big promotion,Complete Full Version Previously sold for 29.95 and now it is absoutly FREE. Accurate Time Around the World Quickly view the time of any location in the world. Automatically set time using Atomic Clocks. Eliminate embarrassing phone calls at inappropriate times. WorldTime is ideal for synchronizing schedules, meetings, events, and communication between time zones. It is a must for businesses that contact associates around the globe, for individuals who contact distant relatives, or the curious who want to know the time surrounding world events. All 24-time zones. Covers Thousands of countries and cities Get it at ==== INSIDE THIS MONTH EXPAT WORLD =============== EXPAT WORLD NEWSLETTER (VOL.16 ISSUE 06) Table of Content: - PANAMA IS HOT - A WORLD CLASS RETIREMENT HAVEN THAT'S RIPE FOR PROFITABLE REAL ESTATE INVESTMENT - BITS & PIECES - THE RED LIGHTS OF SEOUL - YOUR PRIVACY IS BEING SLICED, DICED, CUT, SHREDDED AND HOMOGENIZED UNTIL THERE IS VIRTUALLY NOTHING LEFT OF IT. - PASSPORTS BY MAIL UPDATE - ISLANDS LURED TO SELL PASSPORTS - DOMINICA PASSPORTS - SERBIAN CUSTOMS SEIZE FAKE BELGIUM PASSPORTS - EUROPEAN UNION SEEKS VISA-FREE TRAVEL TO THE USA FOR ALL EU MEMBERS - TURKS-CAICOS SERIOUSLY CONSIDER BECOMING CANADA'S 11 PROVINCE - THE EMPLOYEE TAX-FREE TAKE HOME PAY INDEX - AROUND THE WORLD WITH EXPAT WORLD - INTERNATIONAL SNIPS & CLIPS - CRAPPER RAPPER - THE PERILS OF BEER - HOUSE OF PRICKS - "JOHN" WAYNE YOU MISSING SO MUCH Each week the EXPAT WORLD DIGEST gives you just a smattering of what you can find in the EXPAT WORLD newsletter that we produce once a month. Why not get the whole story and subscribe now to our electronic version for just US $30 per year. Go to our website: www.expatworld.net to sign up. ********************************************************************* EXPAT WORLD - the newsletter of international living URL - http://www.expatworld.net Email - office@expatworld.net ---------- End of Expat World Digest -------------------------------- To unsubscribe, write to unsubscribe-digest@expatworld.net