CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Playing the Game 37
over a million by now, and some experts put the number as high as three
million. According to various estimates, half of cross-border trade and investment
passes through a tax haven or a secrecy jurisdiction at some point
along the way. So you’re already in the best of company.
Stealth and camouflage can also be taken a couple of steps further.
Ownership of your one or more IBCs or PICs can be transferred to an offshore
trust. In most secrecy jurisdictions contributors to trusts do not necessarily
have to be named in trust documents, and such documents do not
have to be filed with local authorities. Trustees can carry out your instructions
and, except in rare circumstances, avoid answering questions about
who is giving them instructions. Furthermore, trustees are usually absolved
from responsibility for directives issued, which protects both them and you.
Trusts typically offer a strong measure of asset protection from attacks by
creditors and, set up in tax havens, allow citizens of many countries to accumulate
revenues not subject to income or capital gains taxes. And, being
doubly cautious, many trust documents incorporate “flee clauses,” allowing
the domicile of the trust to be relocated to another secrecy jurisdiction
should anyone come asking questions. Be sure to get these flee clauses written
into your documents.
The evolution of trust law over a period of centuries typically has required
that the contributor to a trust and the beneficiary of a trust can’t be
one and the same. In other words, you cannot set up a trust to benefit yourself.
But have no fear; secrecy jurisdictions are not about to be stopped by
such ancient traditions. Take Nevis, for example: “Under the Nevis International
Trust Ordinance, the same person can, but is not required to be the
Settlor (creator), Beneficiary, and Protector of the trust.” 9 Furthermore, “foreign
laws, including U.S. laws, do not apply to Nevisian trusts. This means
that under Nevisian law, the claim will always have to be re-tried, ab initio,
in the Nevisian courts, with Nevisian attorneys and with Nevisian judges
who can generally be expected to uphold the Nevisian trust.” 10 If someone
pursuing you even sets foot in Nevis, he or she must first post a $25,000
bond with the court before any legal action can be undertaken. In other
words, now you’ve got a secret company operated by a secret trust in a secrecy
jurisdiction determined to protect your secrets no matter what.
A variation on offshore trusts is an offshore foundation. This is a legal
entity that has no shareholders or members, but it can hold ownership interests
in other companies. Founders can be beneficiaries of a foundation, but