Know Your Client Rules And Requirements Around The World

Know Your Client Rules And Requirements Around The World
Know Your Client Rules And Requirements Around The WorldPost-FATCA Madness In Real Time

Sept. 11, 2014
Panama City, Panama

Dear Offshore Living Letter Reader,

The unintended consequences of FATCA and the overreach of the U.S. government and the IRS have started playing out around the world. In the last week, I’ve heard from a half-dozen people with “know your client” tales of woe.

Indeed, I have my own.

Let’s start with the know-your-client form that the homeowner’s insurance company I have a policy with for my Medellin apartment sent me last week. The form is two pages long and asks for some understandable information, such as the name of the person holding the policy, the address of the property being insured, etc.

Then it goes on to ask the nationality of the person holding the policy. Why would an insurance agency need to know the nationality of someone buying a homeowner’s policy from them?

But wait…there’s more. The form also includes a tick box asking if the policy-holder has other nationalities. If so, the form continues, the policy-holder is to name them.

Then this homeowner’s insurance form wants to know what residencies I hold. Continue reading “Know Your Client Rules And Requirements Around The World” »

Operation Choke Point Is Closing U.S. Bank Accounts

Operation Choke Point Is Closing U.S. Bank Accounts
Operation Choke Point Is Closing U.S. Bank AccountsYou Better Hope The U.S. Government Likes What You Do For A Living

Sept. 8, 2014
Panama City, Panama

Dear Offshore Living Letter Reader,

If you’re living in the United States, you may have heard already about “Operation Choke Point.” This Department of Justice program was originated ostensibly to clamp down on online and payday lenders that charge high interest rates, and maybe originally that was indeed the idea. However, today, those businesses are not the only ones being choked. This operation has expanded its reach to pressure banks to close accounts of businesses in industries that have nothing to do with payday lending. What’s the common denominator among the businesses being targeted by this latest U.S. government attack? As far as I can tell, they’re all part of industries that the current administration doesn’t like.

Including, for example, gun shops and ammunition stores, which are having their accounts closed. Same for topless dancers and topless dance clubs. One report states that a porn star was denied a home loan, bottom line, because of his profession.

Banks are being told that it’s too “risky” for them to continue carrying clients associated with any of the businesses on the DOJ’s published list. The risk to the banks, I’d say, in fact, is being fined by the Justice Department if they don’t fall in line.

One could get behind shutting down payday loan scam groups, but that’s not what we’re talking about now even if, again, it was the original intent. What we’re talking about now is another example of growing political risk in the United States. The pragmatic response is the mantra I return to all the time but that has never been more urgent a cry than it is right now:

Diversify offshore.

People write me every day to ask about the political stability of this or that country in South America, but they don’t seem to think twice about political risk in the “West.” Continue reading “Operation Choke Point Is Closing U.S. Bank Accounts” »