< Sovereign Society Index >

In This Issue:

* COMMENT: Cayman Islands Surrenders to I.R.S.

* OFFSHORE: Bahamas High Court Major Upset Ruling.  St. Vincent
  Clean Up. Nevis Eases Secrecy. Panama Rails. Swiss 'Bad Rap'.
  Gibraltar Sharing? EU Super State. New World Post 9-11.

* WEALTH: U.S. Bank Spying. Bank Spy Software. Tax Harmony Hurts
  U.S. Economy. Fleeing South Africa. Cuban Offer. Bankrupt Nations.
  Anti-Money Laundering Follies. US. Super Sex Champs.

* PRIVACY: Is This America? US Spies on Net Users. Software Maker
  Accused. Canada, U.K. Rush Toward Police States.

The Cayman Islands, until now one of the world's leading tax havens, has signed a far reaching tax information exchange agreement giving the US government broad access "upon request" to virtually all financial information. The move ends the islands' tax haven status. In effect the Caymans government now will serve as an enforcement arm of the IRS, applying US tax law to US persons with business there.

Michael Alberga, a leading Caymanian lawyer, said the agreement represents "a 360 degree shift" in a 30-year-old policy. He called it "perplexing" that the Caymans got nothing in exchange. Last year he accused the OECD and rich nations of practicing "economic terrorism" against small nations such as the Caymans. Since then the government has adopted a host of OECD demanded laws that foretold the new US agreement announced this week. In May 2000 Caymans caved into the OECD, promising increased 'transparency'.

Suggesting independence from the UK may be the solution, The Cayman Net News denounced the agreement as "force fed" by Britain, charging the islands had been "victimized" and "compromised" by London.

The US will now have free access to all banking and other records for US criminal, civil and administrative tax investigations relating to US income taxes. Effective date for criminal tax evasion: Jan. 1, 2004; for all other tax matters, Jan.1, 2006. Nothing in the agreement bars
retroactive claims by the IRS.

Because the CI levies no income taxes and tax evasion is not a crime there, until now dual criminality requirements blocked most foreign tax investigations. The new accord waives Cayman privacy laws, requiring disclosure of beneficial ownership of trusts, international
business corporations and other entities.

A British overseas territory, the Cayman Islands ranks as the world's fifth-largest financial center, after New York, London, Tokyo and Hong Kong. It hosts 57,900 IBCs, 465 financial institutions, including most of the world's top banks, 2,621 mutual funds, 114 trust companies, 541 insurance companies and thousands of closed-end and hedge funds.
Offshore business accounts for 30% of a GDP of US$1.4 billion. As of June 2000, total assets of Caymans banks stood at US $747.6 billion, a 50% growth over a 1996 figure of US $497 billion.

Those figures will soon take a decided nosedive as an army of IRS agents prepares for a mass invasion of the Cayman Islands.
------
Cayman government's official spin:
http://globalarchive.ft.com/globalarchive/article.html?id=011127006314
NEWS stories:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT33P1DHLUC
http://www.modbee.com/workmoney/story/1233092p-1301536c.html
Cayman Net News editorial:
http://www.caymannetnews.com/stories.html#Editorial

BAHAMAS HIGH COURT NIXES ASSET FREEZE LAW NASSAU. In a stunning blow to the government, the Bahamas Supreme Court ruled a new asset forfeiture law unconstitutional. Observers say this calls into question a series of laws that have impaired the islands
status as a tax haven. The decision comes as The Bahamas suffers a major recession, much of it due to a crippled offshore sector. LINK:
http://www.thenassauguardian.com/news_display.php?prid=2914 
-----
ST. VINCENT PLAYS CATCH UP KINGSTOWN. Embroiled in an offshore banking scandal, this FATF blacklisted nation passes a new anti-money laundering law. LINK:
http://www.tax-news.com/asp/story/story.asp?storyname=6490
-----
NEVIS EASES FINANCIAL SECRECY
CHARLESTOWN, Nevis. The island assembly eases secrecy on bank and IBC beneficial ownership.
-----
PANAMA RAILWAY OPENS
Panama's transcontinental railroad opens for cargo business, putting the Atlantic and Pacific Oceans little more than an hour apart. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3HVBMLIUC
-----
SWISS DECRY 'BAD RAP' ON DIRTY CASH
Fact 1: Switzerland enforces some of the world's toughest anti-money  laundering laws. Fact 2: It has a bad image as a dirty cash haven.
LINKS: http://www.scotlandonsunday.com/world.cfm?id=SS01045777
http://www.tax-news.com/asp/story/story.asp?storyname=6480
-----
GIBRALTAR JOINT SOVEREIGNTY DEAL
Britain says it wont surrender The Rock to Spain, but it may share. 
LINKS:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT322FSKLUC
http://www.tax-news.com/asp/story/story.asp?storyname=6433
-----
GERMANY, FRANCE WANT E.U. SUPER STATE
French and German leaders want a European super state with EU wide police, military, courts, customs, criminal laws. LINK: http://www.euobserver.com/index.phtml?selected_topic=9&action=view&article_id=4296
-----
POST 9-11 IT'S A NEW WORLD OUT THERE
A new international order may not have emerged after Sept. 11, but the outlines of a new world are emerging. LINK:
http://www.observer.co.uk/comment/story/0,6903,605602,00.html

U.S. BANK SPY SYSTEM QUESTIONED WASHINGTON. Civil liberties and privacy concerns raised about a possible government-banks data spy system. LINKS:
http://dailynews.yahoo.com/htx/ap/20011126/us/terror_money_banks_1.html
-----
BANKS SPY ON ACCOUNTS WITH SOFTWARE
Bank account holders are constantly spied upon by bank software. LINK:
http://www.sun-sentinel.com/business/local/sfl-1128funds.story?coll=sfla%2D
business%2Dheadlines
-----
'TAX HARMONY' DRIVE HURTS U.S.A.
Heritage Foundation's Dan MITCHELL explains why the OECD's 'tax harmonization' drive threatens the US economy. LINKS:
http://www.tax-news.com/asp/story/story.asp?storyname=6470
http://www.freedomandprosperity.org/Papers/taxharm/taxharm.shtml
-----
MERRILL LYNCH BAILS OUT OF SOUTH AFRICA
JOHANNESBURG. A major financial firm ends private banking. LINK:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3NM4BXJUC
-----
COMMUNIST CUBA OFFERS COMPENSATION
HAVANA. Cuba offers to compensate 6,000 U.S. firms and
citizens whose property was nationalized, for a price. LINK:
http://www.bayarea.com/rc/news/docs/1685888l.htm
-----
INTERNATIONAL BANKRUPTCY
Should nations be allowed to file for bankruptcy? IMF says Yes! LINKS:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3J2Y94KUC
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3ZSU7FLUC
-----
ANTI-MONEY LAUNDERING FOLLIES
Fighting dirty cash gets headlines but few victories. LINK:
http://www.usatoday.com/news/comment/2001-11-28-ncguest2.htm
-----
U.S. SEXUAL SUPER POWER
The US is the sexual super power of the world. Greeks second.

THIS IS AMERICA?
Sovereign Society Council of Experts member Harry BROWNE, former US presidential candidate, asks what's happening to America. LINK: 
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=25456
-----
U.S. NOW SPYING ON INTERNET USERS
Police already are using new anti-terrorism powers to monitor cable modem users without obtaining a search warrant. LINK:
http://www.wired.com/news/conflict/0,2100,48711,00.html
-----
SOFTWARE MAY HELP FEDS SPY
A leading US software maker is accused of helping feds snoop.
LINKS: http://www.wired.com/news/conflict/0,2100,48648,00.html
http://www.theregister.co.uk/content/55/23057.html
-----
CANADA RAMS THROUGH POLICE STATE
OTTAWA. Canadian government smothers debate on terror bill. LINK:
http://www.nationalpost.com/news/updates/story.html?f=/news/updates/stories/20011
125/national-607021.html
-----
BRITISH LABOUR WARS ON FREEDOM
LONDON. Tony Blair's first war casualty is freedom LINKS:
http://www.spectator.co.uk/article.php3?table=old&section=current&issue=2001-11-24&id=1339
http://www.vdare.com/roberts/column112601.htm
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