IS BANK SECRECY DISAPPEARING?

| IS THIS THE THE LAST NAIL IN THE COFFIN OF TAX

EVASION BUSINESS?

This is the first part of our interview on the end of bank secrecy. Following the introduction of OECD new automatic
exchange standard requirement is bank secrecy really dead in the water? Is Singapore the answer to this treat? How
does this change offshore account opening business? Do not hesitate to contact us at
corporate@offshorepremium.com if you have questions in relation to this matter

Is there still a bank secrecy?

There are now 87 countries that have signed the OECD Mutual Administrative Assistance in Tax Matters
Now Article 6 of this Convention allows automatic exchange of information between participating jurisdictions, but
requires a competent authority agreement in order to agree on the modalities and procedures for automatically
exchanging information, as well as on confidentiality issues and data protection safeguards
There are now 51 countries that have executed the competent authority agreement called Multilateral Competent
Agreement among which 17 Tax havens (and not the smallest) have signed it as well. (BVI, Caimans, Mauritius and
so on)
There are 700 Tax Information Exchange Agreements which are in force. Yes they do not provide for automatic
exchange of information but they still authorized exchange of tax information
There are thousands of double tax avoidance agreement more and more that includes the tax information exchange
clause.
There are 111 countries that are FACTA compliant
There are of course countries that did not agree to all of the above or only to a part of it. But for how long.
There are means of pressure to force reluctant countries to comply. As we have seen in a previous interview on
FACTA the USA have threaten financial institutions that would not want to cooperate with a 30% withholding tax not
only on dividends or interest but on capital as well.
OECD dont use such a threat yet but this may come later. Also there is the threat of grey listing or black listing
uncooperative countries and being on the grey list or on the black list make said country financial institutions
operations more complex.
There is still bank secrecy for Non-European or Non US residents but for European tax residents and US tax
residents finding a neutral jurisdiction where the bank secrecy is not weakened by either FACTA or Tax information
Agreement
or
now
OECD
automatic
exchange
agreement
standard
is
nearly
impossible
Anyway when 15 tax havens agree to sign the convention on the Multilateral Competent Agreement to adopt the
common reporting standard of automatic exchange of information it is definitively a sign that things are changing and
not for the best

Singapore did not sign OECD Multilateral Competent Agreement. Is it the

next safe place to go?
Those people that are talking about Singapore as the Hail Mary of tax evasion did not understand the issue.
They have read that Singapore did not sign the Multilateral Competent Agreement to adopt the common reporting
standard of automatic exchange of information. And they deducted that Singapore was were to go.
But it is a bit more complicated than this.
Firstly Singapore has taken a strong stance on Tax Evasion which is deemed a criminal offence there since July
2013.
Secondly Singapore is reviewing all its old Double Tax Agreement to include the new OECD standard on tax
information.
Thirdly Singapore has signed in 2013 the OECD Convention on Mutual Administrative Assistance in Tax Matters
and accepted the principle of Automatic Exchange of Information that will become enforceable as soon as ratified by
the
parliament.
Finally Mr. Tharman Singapore deputy prime minister and finance minister has said on Tuesday 3 November 2014
Tuesday the Government will work closely with the financial industry to address issues that may arise as we work
towards implementing the new OECD Automatic Exchange Of Information Standard by 2018.
Singapore is only one step removed from Automatic Exchange of ax Information. On the long term Singapore is not
the Hail Mary of tax evasion. Even on the short term I would not use this jurisdiction if the purpose is to keep
undeclared assets.

How does it change the business of offshore bank account opening?

It

depend

what

business

you

are

talking

about

If we are talking tax evasion then it is a business that is changing tremendously and in my opinion is about to
disappear. As dinosaurs those who sole business is tax evasion are about to become extinct.
I mean those services will still exist but for a US or a European tax resident to use them will be simply suicidal.
I like to do parallel with the chess games. Put it this way if we talk about tax evasion European tax residents or US tax
residents with offshore accounts which sole purpose is to hide assess are about to become CHECK and under
threat of being captured on the tax administration next move.