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.

Following is an edited version of our Press Release announcing the new 2010 edition of our ever popular Practical Offshore Banking Guide which is now available….

While the days of James Bond-style numbered Swiss bank accounts may be over, the world of discreet private banking and offshore wealth management is growing apace as financial uncertainty continues to make people seek safe havens.

Despite highly-publicized government crackdowns on tax evasion around the world during the past year, spearheaded by the G20-OECD “anti tax haven” blacklisting and the US attack on UPS after defection of Bradley Birkenfeld,  more billions are headed for offshore banks and tax havens than ever before – with good reason, and it’s all completely legal. That is the conclusion of the new Practical Offshore Banking Guide 2010, advising high net worth individuals and entrepreneurs on offshore banking and asset protection, that is released today. In it you will find information on nine of the best offshore banks.

In the 2010 update of his annual Q Wealth Practical Offshore Banking Guide, offshore banking expert Peter Macfarlane points out that tax evasion is far from the only factor encouraging smart individuals to go offshore. “There are more good reasons than ever to go offshore. Taxes are certainly a factor, but many people these days are motivated by deeper feelings – they just don’t trust the system any more,” said Macfarlane today. “Basically, they are demanding full control of their own money. The human right to privacy is definitely part of the equation. Why should an individual´s finances be an open book?”

“Bank failures and bailouts are on everybody’s minds, and rational individuals are looking to open accounts at conservative and respectable banks, in countries that respect the rule of law and private property, that do not have this toxic exposure. Clients seek to protect their assets not just against the perceived injustice of many lawsuits, but more fundamentally against a decline in the value of the dollar and other major currencies like the euro and pound. Expecting the imminent devaluation or collapse of the dollar, they are diversifying into better-backed currencies, and of course into precious metals like gold and silver – something made easy by offshore multi-currency bank accounts,” comments Macfarlane, adding: “We’ve all heard about the risks of keeping eggs in the same basket.”

The Practical Offshore Guide 2010 includes special sections for US and European Union citizens, explains information exchange in detail, and proffers practical advice on choosing, opening and operating an offshore bank account.

The Practical Offshore Banking Guide 2010 is published FREE for readers of The Q Wealth Report, a privately-published newsletter covering to offshore banking, asset protection and wealth management. The Q Wealth Report was established in England in 1996 and has a global readership. Englishman Peter Macfarlane, 38, is joint editor, besides running his own professional practice in Panama City, Panama and being a regular speaker at offshore events.  Further bio on Peter Macfarlane is here. The free Secrets of the Super Rich course edited by Peter Macfarlane and others is available here.

Just a quick reminder that close of business tomorrow is the deadline to qualify for the Early Bird bonus on entry tickets and personal consultations at our offshore wealth creation event in Cancun, Mexico.

Why would you attend this event?

• To learn more about which offshore corporate structure, foundation or trust is right for you. A Belize IBC, a Panama Foundation, a New Zealand offshore trust or something completely different?
• Learn about the best offshore banking countries and the best offshore banks. Peter will be explaining why countries you’ve possibly never even heard of may be the best offshore banking jurisdictions in 2010.
• Learn how to live offshore and run businesses internationally. If you are into consulting, writing, offshore e-commerce, online video etc you should attend this event. Likewise if you see one of these businesses in your future.
• Learn how to protect your assets. It’s all very well paying an attorney to do it for you, but lawyers are more interested in their fees than your well-being. We teach you how to do it yourself.

Above are just a few of the reasons you might want to attend our Cancun event in March. But there’s another reason too….

For the first time we have decided to offer discounts on offshore corporations, foundations etc ordered from Peter Macfarlane & Associates S.A. at this event. Our reasoning behind this is simple: explaining offshore structures to a group is much more time-efficient than explaining it individually over the e-mail or phone. Savings in time equal savings in money.

With the above discounts, your attendance at the event and your personal one-hour consultation can work out basically free if you decide to go ahead and set up an offshore structure for yourself.

We are also looking for long-term relationship building. You look us in the eye, we look you in the eye. In my view, that is the best form of due diligence.

If you are reading this before December 23rd, it’s not too late to take advantage of our early bird discount. Contact Frederick and he will get back to you with the necessary information: events at qwealthreport.com  (Replace the at with the @ symbol – we do that to deter spammers)

See you there!

Over the last few months and in the wake of the OECD crackdown on tax havens, when talking to my personal consulting clients and handling the free anonymous e-mail consultations we offer to members, I’ve been asked numerous questions about participating in offshore tax amnesty programs like the IRS’s ‘Offshore Voluntary Compliance Program‘ (OVCP), the UK’s ‘New Disclosure Opportunity‘ (NDO) and equivalent programs in many other countries.

Some surprising countries like the Netherlands – including Netherlands Antilles – and Argentina are also getting very agressive with their non-compliant taxpayers and are busy signing Tax Information Exchange Agreements (TIEAs) with offshore havens.

First of all, the usual disclaimers. There is no easy to answer to this question as it depends very much on personal circumstances. International tax lawyers I have talked to are divided in their opinions too. My job here is simply to report what I’m hearing on the offshore grapevine. Nothing here should be construed as tax advice.

The USA  Offshore Voluntary Compliance Program has attracted the severe criticism for being highly ambiguous – even those participating in the amnesty and filing their FBAR forms have received no guarantee that they will not be subject to criminal prosecution later. So, one might ask, what is the benefit of participating in the amnesty? The IRS are effectively saying to taxpayers “you just have to trust us.” Hmm. Any good lawyer will tell you not to trust the opposition. And on that basis many good lawyers have advised clients that it is not in their interests to participate in the amnesty.

Although it has now technically finished, we hear that the IRS may still be offering informal ‘deals’. And the main point of such deals is to collect intelligence on offshore bankers, lawyers, accountants and others who have assisted US taxpayers in tax evasion in the past.

In this regard, I have specifically warned a few clients about undeclared accounts they have in banks that I won’t name in public, but which are likely to be high on the IRS radar. Certain European banks, mainly banks in Switzerland, Austria and Denmark, that I could probably count on the fingers of my two hands, have been very active in the past in terms of marketing their services to Americans. UBS was one of them, but there are others, including some small boutique private banks with mainly American clients.

If the IRS didn’t know about these offshore banks before, they certainly do now. So which banks do you think will be top of the list for auditing with a fine tooth comb once the new QI rules are agreed sometime next year? (More on the new 2010 QI rules coming up shortly in Q Bytes – we are working on that now)

You already know if you are a client of one of these banks or not. In the past, they had representatives travelling worldwide – even to the USA – meeting American clients, often at gatherings frequented by libertarians, banking privacy enthusiasts and the like.

If your hidden account is in a bank with few US clients that has not popped up on the radar, you are undoubtedly in a much more advantageous position. But it’s still not too late to close out your accounts with the affected banks and move assets into a more robust, legally watertight asset protection structure – hopefully including assets that do not trigger reporting requirements (physical gold comes to mind.) By closing such vulnerable accounts as soon as possible, you can minimize (but not eliminate) the risk of detection, since audits should hopefully cover only active accounts.

A second, unstated, purpose of the amnesty programs and the IRS spin machine (press releases etc) is simply to scare people with bluff. A lot of the most productive Americans, who have been the stimulus that brought prosperity, jobs and wealth to their country over past decades, won’t be enjoying a relaxing holiday season this year. We don’t think this is fair, of course.

Although bank secrecy is under attack, it’s certainly not dead yet. On the other hand I’ve been saying for years that it is a BIG MISTAKE to hold unreported bank accounts in your personal name. There are much better ways to legally hide money and protect what is yours. Which are the best offshore banking countries for 2010? We regularly write about such solutions and about the safest and best offshore banks here at Q Wealth Report. We believe in practical, positive advice – not scare tactics.

If you don’t see what you want in our publications, paid-up members are entitled to a free e-mail consultation (subject to the natural limits of my time) and/or to a referral to an expert US tax lawyer we know and recommend based in Panama who can also help with disclosure and amnesty matters.

The IRS have declared the US amnesty a huge success. The UK tax authorities, however, have openly admitted that they are disappointed with the number of people coming through under the NDO. In an effort to attract more, they have extended the deadline through to January 4th.

A separate UK tax amnesty is one negotiated exclusively with Liechtenstein, which it is generally agreed by experts offers very favorable terms to taxpayers. However, only 27 people have come forward so far under this amnesty. From this month, the Liechtenstein disclosure amnesty is being extended to allow UK taxpayers who hold undeclared accounts in other jurisdictions to move those accounts to Liechtenstein and then take advantage of this special amnesty.

Anyway, if you want to be kept informed on this subject it is a regular topic in our weekly Q Bytes newsletter. It is absolutely free, just sign up and confirm your e-mail address. We will not spam you and you can unsubscribe instantly at any time. To sign up to Q Bytes click here.

As I’ve frequently stated, the problem with conventional asset protection is that it frequently focuses on preserving the numbers in your offshore bank account. What I mean by this, is that if you have a million dollars, your traditional asset protection lawyer will seek to protect it against unjust lawsuits, greedy ex-spouses, and government seizure – maybe even taxation!

That’s fine as far as it goes… but it completely ignores what is perhaps the most important risk – currency devaluation, specifically devaluation of the dollar. No matter what complicated and convoluted theories economists might come up with, it doesn’t take a genius to figure out that if you print a lot more dollars, each one will be worth less. Every time Bernanke fires up the printing presses, he is devaluing the dollar. If you want to see statistics to back this up, see my earlier post: USA Bankrupt? Here’s the Evidence.

So if you have a million dollars in any of the best offshore banks at the beginning of 2010, and a million dollars plus today’s measly interest in your account at the end of 2010, you will really have made a big loss. So much for asset protection!

The solution, of course, is diversification. You’ve heard the story about the eggs and the basket. Physical gold bullion is one excellent hedge, and has the advantage of being non-reportable on the FBAR form (for US taxpayers) since it’s a physical thing, not a financial account. If you are interested in finding out more about How to Buy and Store Physical Gold Bullion Offshore, click here.

Another good solution is holding a multi-currency bank account. This is a financial service that is simple to use and understand, yet essential for protection against the devaluing dollar. A multi currency account, as its name suggests, is simply one bank account in which you can hold a variety of foreign currencies.

For example, you will log in to your internet banking and see you have X amount of US dollars, Y amount of Swiss Francs, Z amount of Aussie Dollars, etc.If you wire in an amount in a certain currency, the bank will simply hold it in that currency. Of course if you want to switch part or all of your balance to another currency within the account, you can do so with a few clicks of the mouse or a simple phone call.

Multi currency accounts are standard in some of the best offshore banking countries where I typically assist clients in opening their accounts. Despite the government’s propoganda, it is completely legal for most nationalities to hold offshore bank accounts – for the moment!

A question I am often asked is “is it possible to open a multi currency account in the USA?” Unfortunately, the answer is no. There are a few US banks that open foreign currency accounts, the pioneer being EverBank. Even EverBank, however, does not open multi-currency accounts – they simply open separate accounts for each currency you want to hold. This is not bad, but is less convenient.

Another problem with Everbank is this statement on their application form: Please note: Date of Birth, employment information and Social Security Number will be required from all account holders, including trustees and signers on the account. So no accounts for non-US residents, either.

To me, opening a multi-currency bank account in the USA seems like an oxymoron anyway. The whole idea is to diversify out of not just the US dollar, but the US banking system in general. According to bankimplode.com, 208 banks have ‘imploded’ since the beginning of the financial crisis – most of them in the USA.

That is why I have always recommended clients seeking multi-currency accounts to go offshore. For added security and privacy, it’s also wise to use an offshore entity like a Panama Foundation or Corporation to serve as the owner of your bank account. (If you haven’t read our free report yet on the advantages and disadvantages of Panama as an offshore centre, visit our Panama Foundations, Corporations and Offshore Banking page)

So how best do you go about opening a multi currency bank account? Which are the best offshore banks and the best offshore banking countries? Switzerland, Austria, or elsewhere? Where were the best places to open such accounts in 2009, and what will be the best offshore accounts in 2010?

For that information I suggest you download our Practical Offshore Banking Guide which is free for our paid-up members. If you are not a paid-up member yet, you can either subscribe online right now (it only costs $87 and takes a few minutes), or you can test our services with no obligation with our Free Five Part introductory course on Offshore Banking, Asset Protection and Wealth Creation that we would be delighted to send you starting today. Simply enter your e-mail address in the box above to receive yours.

Prefer a personal meeting? Then why not come along and meet me and the team in Cancun, Mexico in March 2010? Details from events@qwealthreport.com

Offshore hedge funds, mutual funds and so-called high yield investment programs could be next on the IRS hitlist. That’s the conclusion of a recent Wall Street Journal article. After the recent events with Swiss banking behemoth UBS, other large offshore banks and financial institutions are ‘low hanging fruit.’ What does this mean for you as an offshore investor? Peter Macfarlane explains below.

Alex Raskolnikov, a professor and offshore tax expert at Columbia University Law School quoted by the Journal, believes that the IRS and US Justice Department will try to identify tax evaders who invest with offshore hedge funds managed by offshore banks. This will play out as as part of the US government’s ongoing effort to have big foreign financial institutions, which are incorrectly regarded by many as the best offshore banks, to provide them with confidential information about Americans who open offshore bank accounts.

Legislation recently introduced in the US Senate by Finance Committee Chairman Max Baucus would go beyond the existing FBAR (Foreign Bank Account Reporting) requirements, which are filed by taxpayers only on annual basis. It would require U.S. financial institutions to report to the IRS transfers of money into any foreign financial account in real time. The IRS would therefore automatically receive electronic information on new offshore bank accounts as soon as they were opened. Scary stuff, for sure! But that is exactly the purpose of it.

Until recently, US tax attorneys  understood that FBAR requirements did not apply to interests in off-shore hedge funds. However in June of this year, according to the article,  an IRS official stated that the term “financial interest” would include hedge funds that “function as mutual funds.”

Ironically, anecdotal evidence suggests that the majority of investors in offshore hedge funds are in turn US tax-exempt hedge funds such as charitable organizations and pension funds. However, while hedge funds were once the domain of sophisticated investors playing with millions, there is no doubt that many are now operating more like regular mutual funds.

Of course, it is by no means clear how this information on transfers of money into foreign bank accounts would help the IRS. Millions of international transactions clear in New York every day and surely few investors seeking confidentiality offshore would directly transfer money between accounts held in their own names.

How could investors avoid popping up on the IRS radar? Simple. By transacting business in currencies other than the US dollar. This will surely be an advantage rather than an inconvenience for most American offshore investors. The major motivation for going offshore these days is not tax at all, but rather protecting the value of assets against the terminal decline of the dollar and the collapse of the US financial system.

Many of the more private European banks are now actively trying to dissuade clients from transacting business in US dollars at all, preferring that their customer data doesn’t have to be sent to New York. For example, one private banker recently told me that when a client wants to transfer dollars to another bank, they typically fix a EUR-USD rate in advance with the other bank. The transaction settles in Euros, and then is converted back to dollars on arrival in the internal books of the beneficiary/receiving bank. Importantly, my banker prefers to absorb the additional costs of the spread, rather than expose clients to dollar transaction clearance in the US.

Gold is also emerging as a settlement currency for interbank transactions in the mainstream banking system. This is a pleasing novelty that I hadn’t expected to see. Whilst regular readers know I’m a big fan of holding physical gold bullion as opposed to paper or electronic gold liabilities, such liabilities are certainly useful for short term transactions.

Raiffeisen Zentralbank Austria, which with its Eastern European and Asian clients has one of the highest volumes of US dollar clearing outside the USA, has been pioneering this. Since earlier this year they have been offering regular bank accounts denominated in gold ounces, which have prompted a number of offshore banks to offer such services to their clients, using RZB as the correspondent and clearer. A number of banks are now offering gold as a regular currency option in the currency portfolio of their multi-currency bank accounts. Yes, that means you can actually send and receive SWIFT transfers denominated in gold, provided both the sending and receiving banks have appropriate correspondent accounts.

Of course, for many Americans – those most affected by this clampdown – opening bank accounts denominated in other major world currencies appears to be  just a pipe dream. Very few American banks even offer Euro accounts. That’s a far cry from some of the banks we routinely refer clients to, which allow you to hold balances in more than thirty currencies conveniently managed under one account number. And then, there is the problem that many foreign banks simply refuse to work with US clients.

The fact is, however, that despite the government propoganda, opening an offshore bank account is a lot easier than you might think.

It is perfectly legal for Americans to hold as many offshore bank accounts as they wish. And there are still distinguished private banks in reputable tax havens that welcome American clients – especially those who don’t wish to do business in dollars. You will a special note for US Citizens (together with another special note for European Union Citizens) in Q Wealth’s Practical Offshore Banking Guide 2009. Best of all, it includes specific contact details of various banks and brokerage houses. In many cases you can use this information to open your account with no need for hiring an intermediary, and to open an account without even leaving home! You can download this 40-page manual absolutely free with your membership of Q Wealth.

If you are not signing up yet but are interested in hearing more about this topic, don’t hesitate to sign up instead for our Free Q Bytes e-mail newsletter, your weekly guide offering analysis of what’s going on in the offshore banking and asset protection world.

“It is very important to gain and have a basic understanding of the true nature of money. One cannot protect what they do not understand…”

An Apology is due to you, our valued readers. We’ve been very quiet here on the offshore banking and asset protection blog lately, and we even sent out our free offshore email newsletter Q Bytes a day late last week! We normally try to send out Q Bytes over the weekend so people have time to read it at leisure. Frankly, we are getting more work than we can cope with at the moment. We are a small company and we give our clients individual attention, referring our clients to the best offshore banks and asset protection specialists – but this is a very time-consuming task.

Governments are sending more and more business our way, as more people like you are beginning to understand how they have been scammed in a big way for years. Things are pretty bad now, but they could get much worse. There’s a lot of crazy stuff going on behind the scenes right now, for sure. We want to educate people not just to increase our own business, but because we like helping. Our service is for free + thinking + individuals. If we can help people protect their assets, use the offshore banking system to their advantage, and build and create real wealth offshore, then we are doing something very valuable. Whether you come on board with us, or just follow the mainstream media hype, is very much your decision.

Our contacts are the most valuable part of our business. In the last couple of weeks I’ve been in five different countries, building up, reinforcing and doing ongoing due diligence on those contacts. We search out the best alternative investment, wealth creation and offshore wealth building opportunities for our readers. It is a time-consuming and expensive task… that you can get the full benefit of with our membership costing just $87 per year. So if you are not yet a member, please do sign up now. We will have to increase our prices soon, but you can lock in a lifetime of savings – because we guarantee that if you join now, the rate will stay the same in future years.

One of these contacts is Linda Dixon, the Canadian accountant and entrepreneur who has been writing for Q Wealth for more than ten years. Linda decided a few years ago that the time was right to get into the gold mining business in Peru. Linda’s slogan is “mining wealth responsibly” – her business plan being very different to the big miners. Linda takes care that her mining operations are both ecologically and socially sustainable, by giving back to the communities in Peru. Perhaps most importantly, she doesn’t sell any gold to the cartel, preferring instead to sell direct to investors like me and you.

“Why did has gold retained and increased in value during such a turbulent time?” writes Linda in an article on her gold mining business for the next issue of Q Wealth Report. “Because people know gold is a safe haven, a protector of wealth. Always the horizon sets on the fiat currency and gold returns. The true measure of wealth. The long standing protection of wealth.”

Gold is the money of Monarchs…
Silver is the money of gentlemen…
Barter is the money of peasants…
Debt is the money of slaves…

See for yourself. There are many documentaries now addressing this fact. Best place to have a look is on www.youtube.com Go and have a search for “fiat money”

One “mainstream” clip on YouTube is “The US Dollar, Fiat Currency or Fake Money?” Look at this one and look at others that pop up as related. It is very important to gain and have a basic understanding of the true nature money. One cannot protect what they do not understand….

You see, the currency that is known as the US Dollar is actually not owned by the US government. It is owned by the Federal Reserve Bank, which is neither federal nor a reserve. It is privately owned company that is legally able to print money out of thin air, literally. Hence “fiat” – a Latin word literally meaning “by order.”

The great wealth in America was built with private money being channeled into private ventures. Then the banks came along and began to put in place the system we now call the Federal Reserve and the fiat money system.

At first the people knew not to trust the banks and the first few attempts at fiat currency failed. People saw it for what it was… not real. People said no to fiat and yes to their gold and silver. However, bit by bit it changed. Then the powers that be removed the gold standard support from the USD. Since then, our so-called money has lost value, has devalued year after year after year.

How is buying gold part of the solution to protecting your assets and your purchasing power from the gradual collapse of fiat money?

Rather than supporting another multinational cartel, which in many ways contributed to the financial meltdown, Linda recommends you buy gold direct from the private producer. This may sound complicated, but it isn’t. How would you like it if the gold you were buying was processed in an environmentally positive and conscious manner? And, how would you like it if the gold you buy helps local communities?

The above is a brief taste of what you will find in an article by Linda Dixon in an upcoming edition of The Q Wealth Report, our flagship quarterly newsletter reserved for paid-up members only. In the meantime you’ll find more information on Linda’s company (along with several other, completely different, gold options) in The Gold Report – How to Buy and Hide Gold Bullion Offshore. It’s available free for instant download in our Members’ Area. If you’re a member, have you read The Gold Report yet? If you’re not a member, what are you waiting for? Sign up right now.

More coming soon!

Regards from your friends offshore.

by Peter Macfarlane, Joint Editor

Most continental Europeans like to take an extended vacation in August. But for those of us in the offshore banking and asset protection business, that just hasn’t been possible this year. I’ve also been relatively quiet in terms of my blogs recently, but it’s not because I’ve been on holiday. Quite the opposite. I’ve been beavering a way at full inboxes and stacks of paperwork from clients. In fact, business this August has been busier than most busy months in other years. It seems people are finally getting the message. Your assets are safer offshore! This in spite of a huge publicity campaign suggesting the opposite and backed by all the media resources the government could muster.

One of the main focuses has been the war of words this summer between Switzerland and the United States. But what practicaln implications does this have for those who already have Swiss bank accounts, or for those who are considering opening a Swiss account for the first time? That is what I will examine in this article.

Last week we heard the news from Swiss private banking giant UBS that they had finally reached agreement with the US IRS. Of course, nobody seriously expected a banking, watches and chocolate trade war – an agreement had to be made after appropriate posturing for a while on both sides. The terms of the agreement are still unclear – probably as part of a face-saving exercise for the IRS. My guess is they really didn’t get much actual data on account holders. Maybe a few thousand blatant tax evaders who had been stupid and lazy enough to evade taxes by holding assets in their personal names in undeclared accounts were turned over. If these people had been following our advice from even ten years ago they wouldn’t have had a problem!

However, the IRS got exactly what they set out to get in the first place. This case wasn’t really about information at all. It was about publicity.

Appropriately for those who speak with forked tongues, the IRS sent out a two-pronged warning message: first, to the US public and the world at large, that ‘Big Brother’ doesn’t approve of offshore banking. Thousands of American citizens with accounts at UBS suffered a lot of sleepless nights, and perhaps quite a few have decided to ‘turn themselves’ in anyway via the current tax amnesty arrangements even though their information never had been revealed and never would be. That is why it is so important, if you want to go offshore, to make sure you have access to the right information (shameless plug for our services here!) Those Americans who still believe and trust their own government – a fast shrinking minority – might be dissuaded from opening further offshore accounts.

The other prong of the IRS war of words was a message to Swiss banks, and to a lesser extent offshore banks in general. Banks across Switzerland and elsewhere have been busy closing the accounts of US citizens, based on ‘policy decisions.’ This again, of course, was part of the IRS’ plan all along. Other banks and governments have been taking note too: for example I’ve been hearing reports from Singapore and Hong Kong of banks closing offshore accounts belonging to Australian citizens, as the Australian government is showing of every sign of stepping up the attacks… probably emboldened by the success of the IRS publicity machine.

UBS was taught a lesson. An interesting article in this week’s Economist entitled Offshore Private Banking: Bourne to Survive, “UBS has been haemorrhaging funds, with an outflow of SFr30 billion ($28 billion) so far this year. But the country’s next four biggest listed banks, Credit Suisse among them, have had private-bank inflows of SFr31 billion.” A point of the Economist article is that people have abandoned the bank (UBS) but not the country or the concept.

Another of the Economist’s points is that most people are not actually in Swiss banks for tax reasons. I’ve long written that tax stopped being the major factor in driving people offshore years ago. Sure, people don’t like to hand over half of the fruits of their labour to the state. I can understand that and I’m sure you can too. But in the bigger picture, it is the distrust of big government that is driving people to protect their wealth offshore.

Tax, just like say electricity or salaries, is an expense people will pay if the environment for doing business is right. It would be a stupid person who would lose 100% of something just to save 50% of it. But what governments don’t get is that they have to make the whole business environment attractive. And the way the government should do this? Just keep their noses out of people’s private business and lives!

As more and more business can be done from anywhere on the planet, why would people stay in a hostile business environment? It’s not just money that economies like the USA, UK and Australia are haemorrhaging at the moment. It’s the smart people like you and me who follow the money.

These days as the Economist says, banking clients are  “mainly in Switzerland for its political stability and well-run banks.” (Since early 2007, 135 banks have “imploded” in the USA, but not one in Switzerland) Nothing to do with taxes. They are trying to escape an unhealthy business environment with factors like inflation, devaluation, bank collapses, civil asset forfeitures and the like.

Why oh why then, and this pains me… would people move their assets into the four largest banks? I’m on record as saying Credit Suisse will likely be the next target. It may be this year, or next year, I don’t know. But Credit Suisse already agreed, for example, to some information exchange with the French government. If you are a new reader here, I invite you to explore this blog and the related articles and you’ll find some of my advice on alternatives to UBS for Swiss private banking. For example my articles on the Best and Safest Offshore Banks and Countries and Alternatives to Swiss Banks for Wealth Management.

The bottom line, however, is that there are better alternatives than big Swiss banks like UBS and Credit Suisse for your offshore accounts – whether you are looking for an active business account, an online trading account, or a more hands-off style traditional Swiss wealth management account. If you would like to know more, that is what we are here for. Our membership costs just $87 per year and entitles you to immediate access to a number of informative downloads – for example our recently updated Practical Offshore Banking Guide. If you are not yet a member, go ahead and sign up right now. Or if you are not yet ready to make that commitment,  sign up for our Free Five Part Course on Offshore Banking and Asset Protection first of all to get a feel for our material…

Anyway… I’ve gone on long enough, but for sure we will be hearing more about this topic. A lot more! I’m just on the way over to Panama City, Panama now and will shortly be reporting more from there on some interesting developments in the way the Panamanian government and banking system is handling the heavy-handed OECD and G20 threats. If you would like to receive this update on the offshore scene in Panama, sign up for our special Free Panama Offshore Report and I’ll be sure to get it to you. There’s no charge – all you need to give us is your e-mail address!

“When the facts change, I change my mind. What do you do, sir?”  Keynes’ comments are very relevant to the fast changing world of banking where we do business today. Investors more than ever have to keep on their toes, keep themselves informed, and not be complacent.

Which are the world’s safest or best offshore banks? Where is the best country to open a bank account? Which is the best offshore tax haven? Is it still a good idea to open a bank account in Switzerland?

These are the type of questions I get on a daily basis as an offshore wealth management editor and consultant. For example, in recent months I have seen a lot of the fallout of the UBS scandal in the United States. Swiss banking giant UBS has closed thousands of  bank accounts based in their Swiss branches where American residents or citizens were involved as signatories – even accounts that had been open for decades. Many investors believe that Credit Suisse could be next on the hitlist and are beginning to think that ‘small is beautiful’ when it comes to private banking.

The answer, as I always have to explain, is that there is no ‘best offshore bank’ nor even ‘best offshore banking country.’ A whole range of individual circumstances come in to play. Investors have many different motivations when looking for a new bank. Often these days, the level of service, privacy, and asset protection are far more important than the tax implications of a secret offshore bank account.

For example, your citizenship is very important. If you are a US citizen your options are more limited, as many offshore banks no longer accept US citizens as clients. Canadians or Australians for example will have fewer problems in this regard. But the traditional wisdom is that for the best level of privacy, choose a bank that does not have offices or branches in your home country.

If you are a citizen of a European Union country (including the United Kingdom of course) then the European Union Savings Tax Directive comes into play, and you might prefer to hold your offshore bank account in one of the tax-haven type banking countries that is not a signatory to this treaty. That rules out Switzerland, Andorra and the Cayman Islands for example – and brings into play other prominent financial capitals a little further afield, like Panama or Singapore.

But there are also other nuances to look out for besides citizenship and residency. What kind of services are you looking for? Do you want one with the best online trading technology or the one with the highest level of personal service? Generally, those two are polar opposites.  Traditional private banking is expensive. Whereas for online trading in the financial markets, maybe you don’t even need a bank account these days.

Most offshore banks offer debit and/or credit cards, and internet banking – two essentials for the modern expat bank account. But again from here, services vary widely. Will it be a Maestro ATM card or a an American Express Platinum? If you are mainly interested in cash withdrawals using an offshore card, then Maestro might be better. But other clients want the prestige and service level afforded to those Gold and Platinum level clients – not to mention perks like airline miles offered on HSBC’s Panama Platinum Mastercards (that can be very valuable if you are conducting serious business through your offshore company.)

Ultimately, then, there is no correct answer – the best offshore bank account for one person is completely different from the best account for somebody down the road. If you would like to read more about this, you will find 40 or so pages of easy to read advice in my Practical Offshore Banking Guide 2009. This report is available instantly for download in pdf format, and also includes contact details of ten offshore banks we can particularly recommend that are suitable for most of our readers.

The guide is FREE OF CHARGE if you are already a member of The Q Wealth Report. If you are not yet a member, you can sign up online right now for the price of a good lunch ($87 to be precise) and get instant access to this information, together with our no-quibble money back guarantee of satisfaction. Or, if you are not ready just yet but would like to stay in touch, sign up for our Q Bytes online newsletter and get a free five part course on offshore banking and asset protection.

by Peter Macfarlane for The Q Wealth Report

The bailout of General Motors is another nail in the coffin of the US dollar. But still, most people haven’t even noticed the real ‘stealth’ devaluation being imposed by the United States government. And yet all of us, Americans or not, are affected by this in a big way, due to the dollar’s status as a reserve currency (and also due to China’s effective control of the dollar, that I have previously touched on…)

Is the dollar “collapsing” or merely “declining”? I believe it is collapsing, but some people might misunderstand this. The dollar is not just going to crash one day, or even one week. It’s an ongoing thing, that started many years ago but has substantially speeded up in the last five years or so (yes, even during the times when the US economy was supposedly booming, that too was based on scams by the financial services sector)

Geithner, Bernanke, Obama and the whole crew are involved in a constant battle to patch over the dollar collapse.  Yet in spite of their attempts, the cracks have widened. The greenback continues its inexorable march downward. This week’s events at G.M. have accelerated the collapse a little more. And I believe that the collapse of the dollar will continue to accelerate with time. What will happen when it hits the bottom is anybody’s guess, but I certainly want to be well prepared when it happens. You should be too. And the Q Wealth website is about helping you do just that – protecting your assets from this stealth devaluation.

The US is not going to crash like Mexico did in 1995, or like Argentina and Brazil have done since with overnight currency devaluations. Neither will go bankrupt in one day like Iceland. The US government still has way too much influence and political power for that to happen. It’s a stealth devaluation because your portfolio will appear to be going higher. You will have more dollars. The stock market will be up. But in real terms, you are losing money faster than ever before. This is what some people have a hard time getting their head around – but it’s very important. The government will try to persuade you that things are going well, when really they are not. Bottom line? It’s a scam being perpetrated on you by government. If you care about protecting your assets and creating new wealth, you have to understand this.

So where can you actually put your money to protect against the stealth devaluation and collapse of the dollar? What about other currencies? Well, necessity dictates that we need to use currencies like dollars, euros and pounds to carry on business. And common investing sense dictates that you should diversify assets, so at least having a proportion of euros is better than having all dollars. It’s a start.

But unfortunately none of these currencies look good. Every other major central bank is participating in the very same scam, meaning that their currencies are equally doomed. So it would not be safe to assume that buying, say, euros, will give you any serious protection against the loss of your assets.

My number one mantra to clients is diversification, diversification and diversification. If you have a portfolio above six figures, it should be in different currencies, in different banks, on different continents. Opening overseas personal accounts, while having no tax consequences, can certainly help asset protection…the geographic diversification protects against the threat called government, while the mere fact that the assets are offshore significantly reduces the risk of you being sued in the first place, especially if you live in a litigious place like the USA or increasingly the UK.

Generally, private international banks are also a whole lot more flexible and service minded too. They offer Swiss-style wealth management banking facilities. For example, I noticed the other day that one of my European private offshore banks (not in Switzerland in this case) had quietly added gold ounces to the list of currencies I could hold in my multi-currency checking account. I guess that means I can even write cheques denominated in gold ounces, though I haven’t tried that yet. I see some of the larger European clearing banks like RAIFFEISEN ZENTRALBANK OESTERREICH AG in Austria are now maintaining gold correspondent accounts for their institutional clients. Interesting, huh?

Which are the best offshore banks for this kind of wealth management? For the answer to that question you need to be a member of The Q Wealth Report. Download the Practical Offshore Banking Guide (available instantly as soon as your payment is approved) and you will find ten of them for starters, with impartial comments on each… together with the form for a free e-mail consultation if you would like to discuss your individual circumstances with me directly.

Gold, probably is number one on my list of recommendations as a hedge against dollar decline. There are ways you should buy gold, and ways you shouldn’t. One way you should not invest in gold is by following typical mainstream advice and investing in ETFs, the most famous of which is GLD the SPDR Gold ETF. Ther are significant concerns about whether you could really get your gold out, or even your money back in dollars (which is not what you would want anyway at that stage) in the case of an economic meltdown.

For example, what do you think of this quote directly from the GLD prospectus?

The Trust’s gold may be subject to loss, damage, theft or restriction on access.

There is a risk that part or all of the Trust’s gold could be lost, damaged or stolen. Access to the Trust’s gold could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered.

If you would like to know about better ways to invest in Gold offshore, you need my Gold Report – How to Buy and Hide Gold Bullion Offshore which is likewise available free of charge for immediate download to our paid up members.

Not a member yet? Sign up to Q Wealth Report here.