Criminal sanctions may apply to an offshore escrow account

Warning Sign, Sign, Warning about Offshore Escrow Accounts

Beware of FATCA! It has recently come to our attention that some people have mistakenly been recommended to use an Escrow Account for privacy of overseas financial transactions. Criminal sanctions would apply to any U.S. Person use of an Escrow Account for the purpose of secrecy.

Any U.S. Person participation, interest, legal right, beneficial ownership, or on behalf of a U.S. person must be reported and is subject to current year taxation. For example: escrow, charity, foundation, trusts, private corporations, stiftung are not tax recognized.

Standard for Automatic Exchange of Financial Account Information, is an information standard for the automatic exchange of information (AEoI), developed in the context of the Organisation for Economic Co-operation and Development (OECD). The legal basis for exchange of data is the Convention on Mutual Administrative Assistance in Tax Matters and the idea is based on the USA Foreign Account Tax Compliance Act (FATCA) implementation agreements.

[box type=”alert”]Collection of data criminalises failure to provide data unless an “Excluded Account”.[/box]

[box type=”info”]Participation in anything that is not specifically exempt is reportable.[/box]

[box type=”tick”]Secrecy is officially sanctioned in an Excluded Account. IRC 402(b) is specifically exempt from automatic exchange of information reporting and is an “Excluded Account”.[/box]

[box type=”note”]One only needs to look at the U.S. Treasury website regarding the Swiss Bank Program to discover why the Foreign Account Tax Compliance Act (FATCA) was invented.[/box]

The IRC 402(b) foreign retirement plan administrator issues to you and your counter party the W-8BEN-E which defines the U.S. tax status and that means FATCA has no need to look through that structure to find the individual beneficiary because checking off Box 29e on that reporting form means that whether there is or is not a U.S. beneficiary is exempt from reporting.

This W-8BEN-E box 29e specifies exactly the exempt beneficiary US tax status of this compliant 402(b). That means simplified and straightforward capital flows from your investments to your compliant IRC 402(b) account.

Your delivering the plan administrator’s authorised signed W-8BEN-E to financial institutions is the most secure and straightforward capital flow route you can go.

Collection of data in all stages of the development, asset-transfer and funding of an overseas financial structure criminalises failure to provide tax information, which means if the intermediary or anyone involved in the does not comply with the data collection rules they will be criminally prosecuted for money laundering.

Under FATCA the idea was a 30% withholding penalty, perhaps on black money a person might be willing to pay that as a ”tax” in an Offshore Voluntary Disclosure Program but with rules on CRS, Automatic Exchange of Financial Information failure is go to jail.

Morgan Stanley estimates that annual reporting on each of their clients will cost a minimum of $600.00 plus the client is totally annoyed because his data is spread to all of, in over 130 countries, which means no secrecy or privacy. Now the extortionist, or predatory legal action will know exactly how much money to ask for you to pay.

All unnecessary when you have an “Excluded Account”.

FATCA enforcement was to charge a 30% withholding. However, FATCA never enforced that actually what they did was simply block transfers. Meaning they could have charged the 30% withholding and we had all assumed that to pay the withholding and then money would move, without a person revealing their details but instead what FATCA did was they blocked the movement of money. Money does not move until you give us what we want. SO FATCA was for US Dollar transfers so HSBC thought OK so we change the Dollars into Euro and transfer Euro and thereby avoid FATCA….Wrong!!! HSBC was recently fined 6 Billion dollars for money laundering

The Common Reporting Standard (CRS) is FATCA on steroids because instead of the sender/receiver being charged a withholding of 30% everyone and anyone who touches the money without providing the data is criminally charged with money laundering…which means the clerk at the bank, the manager at the bank, the trustee, escrow officer, whomever the intermediary AND the person sending or receiving the money. Which means the people that move the money will collect the data and then when the data is received it is spread out to all the countries because there are rules about data collection but no rules regarding data management…meaning no privacy and no way of knowing who or whom all in the world has access to your financial details!


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