In the past, the G7 countries dominated the handling of International cash flows and the commissions earned by transfering large sums of money. In the recent decade, the Caribbean countries have started to make inroads into this formerly closed world economic competition.
In Antigua, the government web site on the tiny Caribbean island tries to attract offshore investors and international financial capital transfers and storage by bragging that Antigua is against greater disclosure of financial information. This give a "high comfort level", they say.
In Nevis, this tiny island promises that companies set up there need file no annual returns, or provide accounting. Incorporation can be done in 24 hours.
Dominica boasts of the "absence of tax treaties, or any exchange agreements with any other country". Lack of extradition is even a selling point in some jurisdictions.
The small places around the Caribbean are aggressively trying to expand their offshore financial industries by making it easier for depositors and corporations to keep their affairs "SECRET". Some even sell citizenship, with a "name change" for your new passport. That flummoxes the computers in the G7 countries.
Among the dominant players of previous centuries in financial world markets, the U.K. and the U.S.A. are the ones most publicly attempting to quell the brushfire wars for financial commissions, transfers, foreign exchange commissions, and storage of cash. The most common buzz words and jargon by these two countries in this war are vague allegations of criminal activities, money laundering and drug money. Conveniently ignoring the fact that both countries have more of both activities than the rest of the world combined. Nor has there been any proof to such allegations. But, it has a nice self serving ring to it. No mention of course is made by the USA in particular, with it's "War on Drugs" and drug money rhetoric, about the huge USA industry built by the bureaucracies, building fiefdoms and spending multi-Billions of dollars in military, DEA, political and industrial-political-military budgets in these so called criminal and drug wars to chase a mere hundred million or so of questionable cash flows. Inflated figures are the norm in this public war of words and grandoise adjectives by the U.S.A..
Hypocritical, hardly describes the inflammatory allegations and rhetoric coming out of these two major G7 players, when it comes to small scale battles for financial domination of world wide economic activity.
Dominica with it's unique one-stop shopping for bank secrecy, protection of money you have earned; from the depredations of tax departments, through inheritance, or seeking to keep what you have from frivolous liens and suits is called criminal activity by some G7 countries. Economic citizenship and name changes also complicate the money trail of hungry lawyers, opportunistic gold diggers and others seeking to separate the lucky rich from their capital in these G7 countries.
The USA state department uses the fact that 200 to 300 Russians have elected to use Dominica's services as criminal rhetoric. What business that is of the USA I have no idea, except that knowing that Russia is allegedly run by various mafia groups of the former KGB and politicians and they siphoned off millions supposedly from some IMF loans to Russia. But then Congressional and Senate investigations in this country show that they knew this would happen before they even lent them the money. So why cry, when you got conned and were expecting it? Far as Russia is concerned it is all legal and no business of any other country.
The traditional financial safe havens, such as Switzerland, Luxembourg and Liechtenstein have grudgingly yield to G7 pressures to open their books and loosen the secrecy laws. This has resulted in a huge drop in financial flows and commissions to their financial industries. It used to be, you had to have a conviction in some country of criminal activity, before a judge would issue a court order releasing financial information.
The Caribbean countries have in recent decades suffered much neglect from big brother to the north. Attacks on the banana industry, limits and controls on sugar quotas and various neglect with things like the old Caribbean Basin Initiative. With the decline of normal economic standbys, the Caribbean nations have had to aggressively start seeking to compete in World markets and diversify. Finance handling is one of those. G7 countries then protest against the competition and politicians have told their law enforcement agencies to boost the complaints and rhetoric about criminal and drug activity as a propoganda weapon.
An IMF study recently estimates that $8 trillion USA is in offshore tax havens around the world. You figure the commissions on transfering that stuff back and forth for business and it comes to quite a piece of change. A third of that money is supposed to be in the Caribbean offshore centers. Mainly 17 of them. Antigua, Barbuda, Anguilla, Barbados, British Virgin Islands, Cayman Islands, Dominica, Grenada, Montserrat, Netherlands Antilles, St. Kitts, Nevis, St. Lucia, St. Vincent and the Grenadines, Turks and Caicos. Belize is not included here, because Belize lacks the free flow of parity with USA dollars, or ECC dollars, has an income tax and foreign exchange controls. Turks and Caicos this year discovered that storing money in bank vaults makes you a target for international burglaries also. Barclays Bank is rumored to have lost $800,000 stored in their vault in the Caicos to a penetration. More stronger and sophisticated storage vaults for money is going to have to be the rule in aspiring Caribbean financial offshore centers. This is hard to do on many islands when the water table is only 3 feet down and hurricanes can blow the buildings away.
99% of the money in financial offshore centers are legal money, seeking protection from invasive tax laws, divorce problems, inheritance laws, and lawyers with frivolous lawsuits in the G7 countries. But if you are a G7 country, then seeking such protection might be legal but the governments will call it criminal because they are limited in accessing it through various bureaucratic machinations and procedures designed to separate people from their money, either in life, or after death.
IBC's ( International Business Corporations), Trusts, and a maze of independent legal jurisdictions protect the person with money against the depredations of those in the various G7 government bureaucracies designed to take it from them through quasi-legal strategms. Bearer shares complicate the G7 countries efforts even more. Even though all this stuff is legal, the G7 countries and the U.K. and U.S.A. in particular, trumpet the fact that they cannot penetrate the secrecy as an illegal act in the press and with meetings with offshore center governments, hoping to frighten, threaten and intimidate provincial back country politicians and bureaucrats into reversing their allegience to their own country in favor of the G7 country.
The Caribbean countries that are tax havens are becoming more sophisticated. The more advanced are passing laws like Switzerland used to have, making divulgance of any information to do with banks, or financial transactions in their countries against the law, with mandatory jail times for offending banking personel. Any divulgance of shareholders, depositors, account transfers, money balances are being met with strict laws to force secrecy.
Many island lawyers are nominee shareholders of hundreds of IBC's. The lawyers are protected by the criminal nature of new laws protecting secrecy when pressured by outside G7 forces. One banker on Antigua said he incorporated 12,000 IBC's in the past two years. Many offshore banks are only one-room outfits, with one, or maybe two employees. They almost never have any money, as it is all moved around electronically. The new computer banks are also a new force into International Finance. Anguilla leads the way with offshore encryption technology that the G7 countries do not have the key codes too. Belize is still lagging, but the Belmopan College is starting to upgrade it's computer course levels and hopefully will soon start software development two year degrees and offer additional courses in Dos, Unix, C++ and encryption design. Linux is superior to the USA dominant Microsoft Windows operating system and the Red Hat version of Linnux is a more complex version of UNIX, the base computer language.
Encryption design is a must for offshore financial business between banks and even government communications. As it is right now, several of the G7 countries can crack nearly all the world's encryption codes, because they have the keys and copy all the satellite transmission international traffic.
Offshore banks, whether a name plate on some back street office, or a fancy building downtown, only accept money coming in from outside sources to the tax haven country. Usually there is no income tax, or financial exchange regulations, or anything else. Money is made from annual licensing fees to the banks and business's that pay registration fees. The economy also benefits because of the access to foreign exchange and all the jobs employed in the offshore financial business. In some countries, the storage of foreign exchange in bank vaults also brings in the owners of the money, on annual visits, or even to live and settle down. Usually such individuals are dynamic, aggressive and start investing in their new country, as they cannot stay idle, even though rich. Everybody benefits. This of course is why places like the U.K. and the U.S.A are fighting brush fire wars around the globe against the spread of offshore tax haven countries and throwing out foul language in the form of allegations of criminality, money laundering and drug money. They are simply trying to keep the benefits of handling foreign money for their own countries. It is a trade war of course on a global scale. Anything they cannot control is branded illicit, or criminal. The two major countries of the G7 group are the U.K. and the U.S.A. and they would like to impose standardized rules governing the handling of money. It is of course always to their advantage and never to the advantage of any small country in the offshore financial business. If the shoes were reversed, neither the U.K. or the U.S.A. would accept standardized rules proposed by smaller offshore financial center groupings. Regional leaders in the Caribbean brand this as hypocrisy. The pressures being applied to comply to regulations by the U.K. and the U.S.A. are nothing more than colonialism in a different form.
"The United States is determined to keep us out of the capital markets," said Lionel A. Hurst, Antigua's ambassador in the U.S.A. They preach diversification while ruining our traditional export markets, then attack us when we seek a piece of the world financial handling pie. We simply want a piece of the action that is currently going to New York and London. The U.K. and the U.S.A. is fearful of that.