The article below was originally published in Q Bytes, our free newsletter. If you are not yet on the distribution list, please click here to sign up.

One of the questions we often receive from readers is “What country does not have a tax information exchange treaty (TIEA) with Country X?”

In other words, many people have been rather freaked out by recent developments such as Swiss and Panamanian banking information exchange agreements with the US and the UK. They are naturally looking for the best offshore banks in jurisdictions that have still not signed any information exchange treaties with major countries.

My standard response is that, while there are some of these countries (Andorra, for example, has not signed up to any information exchange with the US or the UK and doesn’t show any sign of doing so in the short term), jumping from bank to bank, jurisdiction to jurisdiction as rules change is becoming an ever more hopeless task. Yes, you can move once or twice – but the trend is definitely away from secrecy. Each time you change bank, you also put your privacy at risk. It’s much better to adapt your strategy and live within the system, while choosing a private, offshore bank that has its wits about it and values its international clientele.

The news is not all bad. There are still lots of ways to keep your affairs under the radar within the system. Most people I talk to these days, while they are committed to the idea of privacy as a fundamental principle, are much more concerned about asset protection and diversifying their investments. These are the themes we cover in The Q Wealth Report members’ area. Why go offshore? Tax evasion, as I’ve often stated, is not a good reason to go offshore today.

There’s one country I know of, however, that is really off the radar when it comes to offshore banking. You can open multi currency bank accounts here, and get full internet banking – including of course the chance to send multi-currency international bank wires online. US citizens are very welcome. And everything can be set up by mail, with no need to travel there.

This country, I should warn you, is in Africa. Some people lose interest right there, but I think that is a mistake. This is actually an important gold producing nation, so not surprisingly, it’s doing well at the moment. If you think gold will keep going up in dollar terms (I do) then this country will continue to prosper. The bank I recommend there, to consulting clients, is actually based in Europe and owns a gold refinery.

The country I’m talking about is Tanzania. Here are some of the reasons I like it as a private banking haven:

• The Chinese and Indians certainly have no hesitations about Africa and have been pouring billions in here. It’s a matter of following the smart money.

• Since 2000, production of gold on an industrial scale has increased, especially from the Geita (AngloGold/Ashanti) and Bulyanhulu (Barrick) mines. The future of Tanzania looks bright.

• The Tanzanian government recently abolished a number of taxes, including Capital Gains Tax. And passed a new mining act. There is absolutely no tax on foreign bank accounts held by non-resident individuals or companies.

• Double taxation treaties have been signed with Canada, Denmark, Finland, India, Italy, United Kingdom, Norway, Sweden, and Zambia. Tanzania is also in the process of negotiating treaties with other countries including Belgium, Burundi, Iran, Lebanon, Malaysia, Mauritius, Pakistan, Rwanda.

• The Tanzanian Central Bank was heavily criticized for excessively restrictive precautionary banking regulations during the last decade. The result is that the Tanzanian banking sector is strong and healthy today.

A typical structure I might recommend to consulting clients, depending on their circumstances of course, would be a Nevis LLC with a bank account in Tanzania. As I said, that can easily be set up within a few weeks, with no need to leave home. The bank account can also be used as a platform for buying and selling stocks and investments internationally, though it should not be compared to an international online brokerage account.

More information on this and many other private banking and offshore wealth protection matters can be found in the Members Area here at Q Wealth Report. If you haven’t yet signed up, click here to see a list of the membership benefits.

Announcing Peter Macfarlane’s new report on how to invest offshore in rare earth metals and rare industrial metals – and how you can invest in these physical methods for privacy and profit!

With gold having reached an all time high again yesterday, and silver soaring back upwards, investors’ eyes are once again closely focused on precious metals. Our advice in Q Bytes of a few weeks ago to buy up gold has paid off handsomely again. One client recently wrote in about how surprised he is that the world seems to be going bankrupt. On both sides of the Atlantic, emotions and concerns are running high. Asia is the notable exception to the doom and gloom – which is why we are running our next event there this October. More details soon, or email us if you would like to be notified in advance.

Meanwhile, offshore banking expert and consultant Peter Macfarlane has just finished his latest new research report that he’s been busy on for the last few months. It’s downloadable as of today free of charge for Q Wealth members – just log in and look under ‘Special Reports for Members.‘. It’s about another metal investing class, one that we also expect will see substantial gains over the next few years. And once again it’s also about investing in physical, hard money assets with no reliance on banks, stock markets or the global financial system.

This report is about rare earth and rare industrial metals. These rare metals are essential ingredients in many high tech products, from iPads to solar panels. They have been called ‘green elements’ (although this report explains why that is really a misnomer) Still, we believe that the world will continue to consume and demand more and more of these metals for complex industrial processes

Investing offshore in rare metals is also an investment play on Asia and especially the Chinese economy and currency. China currently controls 97% of the world’s supply of rare earth metals. The Chinese have effectively stopped exports of these essential rare metals to the rest of the world, simply because they need their entire production capacity and more to feed the Chinese industrial giant.

This report explains how you as a private individual anywhere in the world can buy physical rare metals and have them stored in a tax-free Swiss vault. Any time you want to take physical delivery you can (subject of course to taxes and shipping costs and government restrictions.) Stockpiling rare metals seems to us like an excellent way to secure a part of your wealth offshore for the future. Unlike gold and silver, these metals are less sensitive to governments since they are not traditionally used as money. There are no reporting requirements on this asset class. In fact, there’s even a way to hold this investment completely anonymously.

For further details of how you can achieve privacy, profit and asset protection read our Rare Metals Investing page, or go directly to the report in the Members Area. If you are not yet a member of Q Wealth, besides instant access to this report you can get a whole range of other exclusive benefits that are listed here.

IMPORTANT: this report also contains a number of warnings about how NOT to invest in rare earth metals. Some classes of investment are already in bubble mode. Please take note.

Once you’ve secured your assets offshore in a protected structure, what next? How do you put them to work for you? How do you really ‘create wealth offshore’?

Certainly there’s no point in keeping much cash in an offshore bank account. Interest rates are at record lows, and offshore banks typically pay lower interest rates even than what you are used to offshore. Precious metals like gold and silver are an essential part of any portfolio… but you don’t want to keep all your assets in those, either. Stock markets are good for speculation with a small amount of capital, but frankly they are so manipulated that you as a small player will depend more on luck than judgement.

That leaves one asset class that we haven’t covered for a while: alternative offshore investments, like private offshore hedge funds. I’m moved to write about these because in the last week I’ve come across a couple of interesting opportunities from people I trust.

A WARNING AND CAVEAT FIRST
Those last three words are very important: ‘people I trust.’ Offshore investments are generally subject to little or no regulation. They are intended for sophisticated investors. Unfortunately there are some people out there who are just bad investment managers, and worse are outright offshore investment scams, so you need to go with people you trust.

The good thing, however, is that with alternative investments you can have a much greater involvement with management. You can typically get to interact and meet with managers. One of the opportunities I heard about this week even includes the fringe benefit of being able to use properties owned by the fund in South America.

So it’s all about finding people you trust. The very best way to do this is to get on a plane and do your due diligence in person, seeking second and third opinions along the way. Fortunately, there are people who can point you in the right direction by providing you with the benefits of their research as you start off. In this week’s free Q Bytes newsletter that has just gone out to subscribers, I mention three such people. I won’t name them here because I want to respect their privacy, but if you don’t want to miss out in future, be sure to sign up for Q Bytes.
FOR SOPHISTICATED INVESTORS ONLY

When investing in this kind of opportunity, who you know is everything. Funds like this don’t accept investments from the public, and even less from US residents unless they can certify themselves as sophisticated investors. Fortunately, such limitations don’t apply to participations from entities like Panama offshore corporations, Panama Foundations, or offshore LLCs, though entry levels are typically six figures.

I’m keen on Latin America not least because of resource investment opportunities. And earlier this year a number of Q Wealth readers got involved via Linda Dixon, our long-time  friend from Canada who moved into the gold and silver business in Peru and few years ago, with an alternative investment in a silver mine. These investments are coming to fruition now with huge returns. I talked to Linda a couple of weeks ago and she is preparing some interesting articles and videos for us, that will be available shortly in the Members Area.

If you don’t yet have access to our Members Area, you can see a summary of benefits (in essence, a list of all the info and tools you are missing out on) right here
Another trusted friend who has made a detailed study of alternative investments in frontier markets lately founded Alternative Latin Investor. Nate has been based in Buenos Aires for quite some time, and is just back from a four-month stint in Africa seeking to expand coverage of frontier markets over there. I’m trying to persuade him to join us on our residence, citizenship and investment trip to Paraguay this coming January.

Nate is putting on a very interesting webinar with some big-name experts on alternative investments in Latin America. It is scheduled for November 10th and requires advance registration – with an early bird discount before November 2nd.
NEW PETER MACFARLANE INFO SITE
Finally, just a notification that the new Peter Macfarlane & Associates site is finished. It’s nothing flashy or exciting, but explains a little more about why my consulting firm does in terms of corporate structuring, precious metals and second citizenships. Feel free to check it out at http://www.petermacfarlane.info

by Peter Macfarlane for the Q Wealth Report

Do Panamanian banks open multi-currency accounts? The answer is yes, but only in very special circumstances. See below for an explanation.

First, however, I owe an apology to regular readers for our failure to update the blog in a long time. Frankly, things have been very hectic over the summer. What with my research into Montenegro’s new economic citizenship (second passport) program, our upcoming event in Ireland and keeping on top of numerous requests from consulting clients concerned about capital preservation and international asset protection, I simply haven’t found the time to blog. From now on, things should be a little more back to normal – as far as is possible in this financially topsy-turvy world!

Anyway, readers know we are still keen on Panama as an offshore financial centre. Panama’s Private Interest Foundations offer some of the best asset protection there is. But a recurring concern of readers is Panama’s dependence on the US dollar. Whilst in theory Panama has its own national currency, the Balboa (currency code PAB) this has not had much financial significance for years.

Panama used to mint real silver and gold balboa coins, but the Balboa has always been at parity (one to one) with the US dollar, and balboa coins today only exist in the form of small change. Up until recently, dollarization was seen as a sign of the stability of Panama. No doubt the stability and low interest rates afforded by the dollar have contributed a lot to Panama’s success in the past. Today, however, it is seen as a threat by those who are going offshore for capital preservation.

Many clients have asked me how I can recommend Panama, considering its economy is based on the dollar, that is losing its value so fast. The answer is that I recommend the country, not the currency. Panama has a productive and diversified economy, and a good legal system. Panama corporation laws have stood the test of time since the 1920s and still provide great privacy and protection today.

But what about multi currency bank accounts in Panama? Up until recently, the dollar was king on the entire American continent. Banks simply did not have much demand for accounts in other currencies. Even currency exchange businesses like casas de cambio are rather thin on the ground in Panama.

In recent years, demand for banking services in other currencies in Panama has soared. Some of the larger retail banks, particularly Multibank and HSBC, are now routinely offering accounts in major world currencies like the euro, the yen, the pound sterling and the Swiss franc.

Unfortunately, foreign currency bank accounts are still far from the standard of sophistication you might expect if you are used to banking in Europe. Each account has a separate number, and in the case of HSBC, I was shocked to learn that the accounts can’t even be linked! That is, if you have a dollar account and want to open a euro account, you have to submit a whole sheaf of paperwork again – passport copies, bank references and the lot, just as if you were a new client walking through the door for the first time. If their IT system really can’t link accounts, it sounds like a criminal money launderer’s dream to me!

But things are changing. In the past year I’ve found three Panamanian banks that will open real multi-currency bank accounts. By this, I mean one account number you can log in to via internet banking, and in which you can keep different balances in different currencies. Switching currency or adding a new one to your portfolio is a matter of a simple mouse-click or two.

All three are Panamanian subsidiaries of established European banks. They will even open accounts where the beneficial owners are US citizens – something undoubtedly of value to our American cousins who are being turned away more and more from banks around the world – always provided that a Panamanian corporation or foundation is the legal owner.

The downside is that none of these three institutions are interested in small accounts. These are not accounts you can open with a small balance ‘in case you need them.’ You’re expected to put at least six figures on deposit, possibly more. If you are looking for an offshore safe haven, however, you couldn’t do much better.

Whether you are looking for a private banking experience such as these financial institutions offer, or a more run-of-the-mill offshore bank account, remember that your Q Wealth membership (click here to see the benefits and costs of joining) comes with a copy of the Practical Offshore Banking Guide 2010. At the back of that guide you’ll discover how you can take advantage of our free personalized banking referral service.

It’s not often that major developments occur in Southern Europe in the month of August. Montenegro’s announcement of its new instant second passport by investment program this past week is an exception.

Perhaps the Montenegrin government hoped to avoid the inevitable backlash from certain nationalist and socialist politicians in the European Union, while attracting the attention of wealthy Americans, Russians and Chinese at whom the program is aimed.

Montenegro has just become only the third state in the world to offer an economic citizenship program, along with the Caribbean island nations of St Kitts and Nevis and the Commonwealth of Dominica. Austria has a similar program with a few more strings attached, while Paraguay, Uruguay and the Dominican Republic are known for their relatively liberal grants of second citizenship after a period of residence. (More information on citizenship by naturalization programs.)

Montenegro is the youngest country in modern Europe, having voted for independence and achieved international recognition in 2006. However its history dates back to Byzantine times. (See Wikipedia entry on Montenegro)

Since independence, Montenegro has boomed, fuelled by a surge of foreign offshore investment… to date mainly from wealthy Russians who have felt comfortable with its Slavic culture, stunning coastline, visa-free travel to the European Union, and confidential offshore banking regime that has been substantially cleaned up following some scandals in the 1990s.

By launching an official economic citizenship program, however, the government of Montenegro hopes to attract investors from further afield, by co-operating with international law firms, trust companies and offshore service providers. We don’t doubt they are taking aim at the huge Chinese market, as well as the increasing flow of Americans who – spurred on by policies like Obamacare and the HIRE Act – are looing to renounce US citizenship for tax, privacy and asset protection reasons.

The new Montenegro economic citizenship program will require an investment of at least EUR 500,000, some of which goes direct to the Montenegrin Treasury and the rest of which must be used to generate business and employment in Montenegro.

Although the announcement is new, insiders have been suspecting for some time that Montenegro passports were available to prominent wealthy investors. One of the most infamous to date is former Thai prime minister Thaksin Shinawatra, who now travels on a Montenegro passport. Mr Shinawatra was convicted in absentia in his homeland on corruption charges, but denies all the charges against him and has announced plans to invest in Montenegro, possibly in some of the luxury hotels along the coast where he has reportedly been staying.

Details of this new second passport program are not yet entirely clear, except that it will be substantially more expensive than established competitors such as the St Kitts and Nevis program that also offers its passport holders visa-free travel to the European Union.

Rest assured however that we at Q Wealth will be monitoring the situation closely and we are already in contact with the government of Montenegro with regard to an interview and citizenship FAQ for the autumn Q Wealth Report. If you are not yet on our free e-mail list, sign up now to receive updates.

Peter Macfarlane comments on Gold Bullion Investing, the Dollar-Euro rate, and Crisis Investing Opportunity in Hungary for The Q Wealth Report

I’m trying to get ahead of myself at the moment in order to take a little time off in August. The result of this is that I’ve got behind on some other things, like keeping up with the news. Besides, I’m a traditionalist who still likes reading magazines in print, and they sometimes take a while to catch up with me on my travels.

Hence, I’m only commenting now on an interesting article in The Economist dated July 10th. They got my attention with the cover headline “Why Gold Has Probably Peaked.” Huh? How could the Economist be saying that? Here’s a quote from the article:

At some point either the worst fears of the gold bugs must be realised – in which case, heaven help us – or the world will become a less nervous place.

The hypothesis of the article is that demand in India and China for gold jewellery is shrinking, that gold is not a great investment because it doesn’t pay interest. As the world economy returns to business as usual, says the Economist, “the gold market may also return to some semblance of normality” – in other words downwards.

Well I can’t disagree that if the global economy really does get better, gold quoted in dollars might fall. But the idea that the global economy is getting better, or that the world is suddenly about to become more tranquil and relaxed, really is a stretch…

Sometimes I think Americans have a hard time understanding Europe, as I have written recently in my comments on the Euro. I said the Euro would recover and now it’s back above 1.30 to the greenback. But the Economist is very European in some ways and it seems they have a hard time understanding Americans. I mean, if they think the world economy is returning to business as usual, what planet are they referring to???

Most of my days at the moment are taken up with Americans who want to get out of the USA. They are looking for offshore investments, foreign residencies and economic citizenships. Of course if we get bogged down in our daily routines we might be able to block out of our minds what is going on – and that is what the majority do, because they don’t want to leave their comfort zones.

However, just think back to two years ago, even a year ago, and see how things have changed – for the worse. Anyone who thinks business is getting back to normal is living in cloud cuckoo land.

Here’s something else I like. The article quotes Willem Buiter, and Anglo-Dutch economist who blogs at the FT under the moniker maverecon as saying he would not invest:

into something without intrinsic value, something whose positive value is based on nothing more than a set of self-confirming beliefs.

Apparently, Buiter was talking about gold when he said this! However I would say it about fiat currencies like the dollar, euro or pound sterling. Is he seriously trying to tell us that say the US dollar has intrinsic value based on anything other than self-confirming beliefs? (In that case, the dollar is backed by the full faith and credit of the Obama government…) Give me my gold bullion I can touch and feel over paper and electrons any day!

On a slightly different but related topic, my fellow traveller Simon Black who blogs as Sovereign Man has written a couple of interesting pieces on fiat money recently. In what I think is an excellent analysis, he explains why trillions of dollars of institutional money are constantly looking for the least worst currency to hang out in, leading to frequent switching between the dollar, the euro and the yen in a race to the bottom. This keeps the three currencies almost even in the race to the bottom, so people don’t really notice the devaluations going on… but like any landing in a storm, there’s a lot of turbulence.

Then yesterday Simon wrote about Hungary, a country I used to live and invest in some years ago and still a pretty good place to live I think. I’ll be watching Hungary closely and Simon correctly points out that what is going on there could well turn out to be more devastating than the Greek sovereign debt crisis. This would definitely lead to a flow of money out of the euro again, and the balancing increase in the dollar as that turbulence continues. As a reader pointed out on Sovereign Man, “The result of a Hungarian default would be very similar to Argentina in 2001 with some very interesting investment implications.” I rather hope Hungary does default… then I will be one of the first in there to buy some tangible real estate with a briefcase full of Federal Reserve promises…

However, one thing Americans never quite understand about Europe is that nothing happens there in August. Hungary is unlikely to default in August as that would interfere with the annual month-long party at Lake Balaton, where Budapest moves to in August. (Like Paris moves to the countryside, or Buenos Aires moves to Punta del Este in December)

It’s always safe to take some time off in August. Come September, your writer and the Q Wealth team will be gathering in Cork, Ireland for Q Wealth Masterclass – a unique opportunity to meet and rub shoulders with a dream team of people who think like us. Read about the speakers here and Five Urgent Reasons why you should attend here. This will be your opportunity not just to protect your assets but put them into long term offshore investments with growth potential. Gold and Offshore Real Estate will be right up there at the top of the investing agenda.

It seems that what the Economist sees as the worst fears of the gold bugs is actually just what the gold bugs are hoping for… Heaven help people who are not gold bugs!

A perfect place to store gold bullion offshore? We expect gold storage operators will be opening shortly in the Singapore free zone. Peter Macfarlane reports below…

It’s not just money that Swiss banks have been haemorrhaging lately (as reported in our last Q Bytes). As Swiss and other private banks are increasingly moving asset protection and wealth management functions to Singapore banks, another interesting news item this past week was the opening of Singapore FreePort.

Singapore FreePort is a state-of-the-art secure storage facility that operates in its own duty-free zone adjacent to Singapore’s Changi Airport. The largest such facility in the world (270,000 square feet to be precise) it provides wealthy collectors with tax-free storage for their valuables.

“When you go to a bank and rent a safe, nobody knows what goes in. It’s the same thing here,” says Alain Vandenborre, president and co-founder of Singapore FreePort. “They only need to give a code that indicates the broad nature of the item—gold, wine or a painting. There’s no value, no ownership, no inventory list—all details are confidential. We offer more confidentiality than Geneva.”

Switzerland and neighboring Austria, home to the famous Das Safe, have typically been the jurisdictions of choice for ‘offshore’ storage of valuables. Geneva’s tax free port, for example, was established in 1888. But regulations and pressure are encouraging Swiss operators to look elsewhere.

It’s no surprise, therefore, to find that the majority shareholder is Natural Le Coultre, the largest art-storage and logistics operator at the Geneva Free Port. The new Singapore facility was planned by Swiss architects, Swiss engineers and Swiss security consultants.

Private rooms and vaults, barricaded by seven-ton doors, line the corridors. Unlike the free-port facilities in Switzerland, however, which are simply secure warehouses, the Singapore FreePort sought to combine security and style. A gigantic arching sculpture entitled “Cage sans Frontières,” (Cage Without Borders) spans the entire lobby.

We’ll be covering this facility in more depth in our Singapore report, due out over the summer for Q Wealth members. In the meantime, if you are not already on the distribution list for our free Q Bytes newsletter, please sign up here to receive more news like this directly in your inbox. We value your privacy.

Peter Macfarlane reporting from Tocumen Airport in Panama, in transit to the Caribbean…

I don’t write much in Q Bytes about my travels, but most of my clients are aware that I travel almost constantly… meeting clients and suppliers, doing research and due diligence. The last few weeks I have been in South America driving around dirt roads looking at agricultural investment properties, investigating first hand the buregoning gold business in South America, seeking elusive wifi signals in odd corners of hotel rooms (even on the roof of a hotel in one case) and enjoying some great barbeques with foreign investment managers and well-connected locals.

Although the internet is undoubtedly a vast repository of information that has changed the way of doing things beyond recognition in the offshore business, I’m still a firm believer in feet on the ground, and building long-term business through solid relationships. In other words, “you don’t know until you go.”

In fact, I believe this is more important than ever. These days there are unfortunately so many things that could go wrong, that it helps to know who you are dealing with. I only deal with people I have a good feeling about. I don’t look for the cheapest provider. Maybe not even the most successful or the best on paper. My business goes to the person I feel is trustworthy, who will be there for the long term.

I’m happy to have made a few more of those long term contacts on this recent trip – particularly in Uruguay, a very interesting option for tax-free residence and second citizenship, that I’ll be writing more about over the coming weeks. That was one of the main reasons for the trip, in fact: and it was successful. We can now make referrals to recommended experts for residence, citizenship, banking and trust services in Uruguay.

The business climate internationally is getting tougher, and believe me things will get a lot tougher yet. Especially when dealing with matters like offshore banking, asset protection, second citizenships and the like, we also need to deal with like-minded people. People who can see what is going on and who are making adequate preparations. There is no point in entrusting your asset protection planning to somebody who does not see the threats! That’s why it’s a great investment to spend time getting to know your business associates on a personal level, out of the office, to find out what REALLY makes them tick.

Geographic diversification is essential… that means you must be international both in investment terms, and in your outlook. Consider yourself a sovereign individual – because that is what you are. Nobody else is going to look out for you.

A good investment advisor (if you can find one) or perhaps a research subscription might be able to give your portfolio the international diversification you need. But to acquire an international outlook you must travel… to see and understand how things really are in the rest of the world.

Fortunately, more and more people are getting this. Years ago it was quite rare for clients to visit their offshore service providers or bankers. Now we see it all the time. Air travel is easy and cheap. Travel in general has become much ‘easier’ – some would say boring – because on the surface, everything might look so similar. But scratch under the surface by spending time with people in an informal environment, and you will learn so much more.

While I was in Buenos Aires I wrote to Q Bytes readers from an apartment kindly lent to me in Buenos Aires by an North American client who spends about six months of the year here. This place is informally known as ‘PT Southern Command.’ South America abounds with interesting opportunities for attractive returns on your investments, and opportunities for enhancing your freedom. The freedom, of course, is the most important aspect for me.

As a foreigner, nobody bothers you here provided you ‘live and let live.’ You are treated with respect. This particular client and friend, let’s call him Mike, made the leap a couple of years ago and bought his apartment in Buenos Aires. He announced the purchase to everybody at our 2008 ‘Recipes for Success’ event in Cancun and invited all the conference delegates to stay anytime. Mike has never looked back. Sooner rather than later he will qualify for citizenship here and with careful planning he has legally avoided paying a penny in income taxes. Plus, his apartment must have doubled in value judging by the prices I am seeing here now.

I’m not the only one from that 2008 conference who took up Mike on his kind invitation. I’m sure he now has a stream of interesting like-minded individuals visiting PT Southern Command, sealing new friendships, exchanging experiences and information, and providing the mental stimulation that all intelligent people need, but is often to hard to find amongst depressive talk at home fuelled by the mainstream media. I’m proud to think that this came apart from one of our conferenes. (The next one, in September, will be in Ireland – details will be posted shortly on our Events page)

In early July, I will be meeting a number of readers in Santo Domingo, Dominican Republic, who are interested in finding out more about residency and second citizenship opportunities there. I still have a few slots available for in-person consultations, and Santo Domingo is quite easy to reach with many direct flights from both North America and Europe. By meeting a group of clients during the same few days, I am also able to reduce my normal in-person consulting fee by more than half. If you are interested, again please initially contact us to schedule appointment. Due to limited time, please note that only requests from Q Wealth members can be entertained. If you are not a member, please sign up here first.

Issue 54 of The Q Wealth Report, the leading privately-published newsletter on freedom, wealth, asset protection and privacy is now available online. Members may download their copies here: Current Issue 54 of Q Wealth Report You will need to be logged in as a member to access this file. If you are not yet a member, check out our list of membership benefits.

Here’s a sneak preview of some of the highlights in issue 54:

• Opportunities Abound: introduction by Dr Richard Cawte
• Private Placement Insurance Policies – a review of this rather boring but extremely functional offshore tax planning and asset protection tool. Discover how you can use PPLIs to your advantage.
• Credible evidence that chipping people increases Cancer Risk
• Mediterranean Mix’n'Match: Detailed article on the use of Cyprus offshore companies and offshore banks – an onshore/offshore combination that makes a very attractive privacy and tax planning tool for Americans and Europeans alike. Includes practical examples. Cyprus banks offer multi currency accounts.
• Interconnectedness: Richard Cawte explores the feeling world we live in… and how to act on intuition and inspiration to achieve  balance, poise and achievement in your personal and business lives.
• Green Technology: Investing in the Future – with an offshore element of course
• Peter Macfarlane’s detailed review of the dire implications of the HIRE Act. Peter predicts economic isolation of the United States and presents detailed advice to protect yourself, your loved ones and your assets from the devaluation of the dollar.
• Full details of the June Q Advantage Seminar and a preview of our September Strategies for Success event.

We hope you enjoy Q Wealth Report!

The following item was published in Saturday’s edition of Q Bytes. We consider The Brussels Agreement (also known as the EU SWIFT Agreement) to be an especially important topic so we are reposting to the blog. To ensure you receive useful information like this in future in a timely manner, simply sign up for your free subscription to Q Bytes. We hate spam as much as you do, and will respect your privacy. Of course, you can unsubscribe at any time.

THE BRUSSELS AGREEMENT MAKES ALL EU BANK ACCOUNTS AN OPEN BOOK TO THE US AUTHORITIES
by Peter Macfarlane, Offshore Banking and Asset Protection Consultant

With remarkably little fanfare, the first of this month saw the entry into force of an important agreement between the USA and the European Union known as the ‘Brussels Agreement.’ This I would regard as the final blow for already weak banking secrecy in European Union countries.

Quite a few astute readers have however noticed this press coverage and e-mailed me questions about it. To answer these questions, I will first reveal below more about the agreement, and then look at its impact on banking privacy. On a positive note, banking secrecy remains alive and well outside the European Union.

The ‘Brussels Agreement’ gives the CIA direct, on-demand access to all bank accounts held in the European Union – period. It also goes under the name ‘SWIFT Agreement’ in European Union papers.

This treaty is an extension and formalization of an existing CIA effort set up shortly after the terrorist attacks in New York in 2001. That program granted the CIA access to data held by SWIFT, the Brussels-based co-operative that processes nearly all international bank transfers. The operation was run covertly until the press found out about it in 2006.

The scope of the Brussels Agreement is, quite frankly, utterly amazing to anyone who cares in the slightest about civil liberties or due process. Far more wide reaching than any Tax Information Exchange Agreements (TIEAs) or Mutual Legal Assistance Treaties (MLATs), and of much greater significance than the recent US attacks on Swiss banking secrecy, the Brussels Agreement simply requires that all 27 EU member states grant requests “as a matter of urgency” for banking information made by the United States under its terrorist finance tracking programme. The records will be kept in a database run by the CIA in Langley, Virginia, for five years before being deleted.

Needless to say, the Brussels Agreement grants US authorities much more scope to consult our bank accounts than that granted to domestic law enforcement agencies in Europe. In the UK and most of Europe a judge must authorise a specific search after receiving a sworn statement from a police officer. In the case of requests from the USA, this due process is completely bypassed.

The USA can also, under the agreement, request so-called “general data sets” perhaps better known as fishing trips, based on broad categories such as “relevant message types, geography and perceived terrorism threats”.

One of the reasons for rushing through this new agreement is that SWIFT at the end of 2009 moved part of its systems architecture to Switzerland, away from its existing computing bases in Brussels and the USA. This would have placed a lot of data outside EU and US jurisdiction, a change apparently demanded of SWIFT by Swiss banks and others concerned about the privacy of their clients’ information. A number of banks had threatened to stop using the SWIFT system altogether if additional privacy protections were not put in place.

We can see that this agreement was rushed through in Europe while attempting to avoid both legal and public scrutiny, because negotiation of the agreement on the EU side was mandated back in July 2009, based on legal provisions in the old Maastricht Treaty that expired at the beginning of December 2009. The agreement was reached just before the deadline, at the end of November. It is limited to nine months duration, but EU documents make clear that this is simply a ‘breathing space’ to keep the program alive while a more permanent bank account information sharing agreement is agreed under the legal auspices of the new Lisbon treaty.

Certain elected representatives in Europe are none too happy about the way the agreement was bulldozed through by Brussels bureaucrats, directly attempting to circumvent normal mandates and procedures. A Bloomberg article just published on BusinessWeek entitled U.S., EU Terror-Finance Data Deal Should Be Vetoed, Panel Says has more information.

Of course, certain safeguards are put in place – the most important of which is that the information is for counter-terrorism use only. If the CIA wishes to reveal information to other US agencies such as the Treasury Department, IRS etc, a European judge must rubber stamp this first. Frankly, however, if it were my information being passed around – which it isn’t because I don’t bank in the EU – this safeguard would give me little confidence. Who is realistically going to trust the CIA?

The actual agreement, a classified document obtained from the EU, is here

An ‘Information Note’ on the subject released by the European Union, is here

IMPACT OF THE BRUSSELS AGREEMENT ON OFFSHORE BANKING AND ASSET PROTECTION

From a banking secrecy point of view, perhaps the most concerning thing is that this agreement has a higher legal force even than national constitutions such as Austria, which protect confidentiality. The CIA can look straight into bank accounts in some of the best offshore banking countries like Austria, Luxembourg, Latvia and Estonia, as well as other EU member states where banking confidentiality has traditionally been less of an issue.

The enormous scope of this agreement also makes minor tax information exchange agreements and the like look insignificant. We would not only not trust the CIA to refrain from sharing this information with other US government agencies. They are likely also to share it informally with their colleagues overseas. The precedent for this would be the UKUSA agreement, for example, where the UK routinely spied upon US citizens at the request of the US, because the CIA was technically prohibited from spying on Americans.

However, let’s not panic either. In fact, this process has been in place since 2001, so it’s nothing new. It’s only new that we are learning about it and it’s being subjected to the democratic process.

The other thing to note is that the EU is the only area where the USA has been able to obtain such ridiculously wide-ranging access. Traditional offshore best banking countries like Switzerland, Singapore and Panama are not covered by this agreement, though you should be aware of transactions that might pass through USA or EU correspondent banks. Switzerland in particular has an excellent clearing system of its own which bypasses SWIFT on Swiss Franc transfers.

The usual message, worth repeating in this case, is that by following the offshore banking advice in Q Wealth you can sleep soundly at night. To recap in a nutshell:

• You should make sure all your structures are legally compliant. Just because I say that banking privacy is NOT dead, and I believe privacy in financial affairs is a basic human right, doesn’t mean you should use banking privacy to hide money. You either get this distinction – or you don’t. Secret bank accounts as a tax evasion tool will not work long term. If you conduct your offshore business in a proper manner following guidelines in my articles, your account will not appear on the radar and your assets will be protected.

• Compliance with your home country’s rules is still easy and possible. Plan your second passport (citizenship) and residence with a professional… considering basing yourself, not just your business, offshore. For Americans this is unfortunately more difficult, since the USA is the only country in the world that taxes its citizens on worldwide income. Americans should therefore consider acquiring a second passport and renouncing their first.

It is perfectly possible and legitimate to protect your assets against the inevitable coming devaluation of fiat currencies, by using offshore multi-currency bank accounts. We have talked recently for example about Norwegian Kroner and Swiss Francs being good investment-grade currencies. Both of these currencies are strong, and they clear outside the EU so they are not affected by the Brussels Agreement.

If you would like to learn more about this, and are not yet a member of Q Wealth, subscribe today to gain access to the wealth of resources in our Members Area.

Better still, come to Cancun next month. We still have a few slots available on our ‘Strategies for Success’ event in Cancun and a few spaces available for one-on-one personal consultations. If you have bank accounts in European Union countries like Austria or Luxembourg and would like them to remain private, this should be a wake-up call. If you haven’t yet moved assets offshore but are considering doing so, also contact Frederick in the Q Wealth Office to set up a personal meeting with Peter Macfarlane in Cancun next month.