Offshore News Digest for Week of June 11, 2001

O.E.C.D. MEETS NEXT WEEK

PARIS. OECD's Forum on Harmful Tax Practices meets here June 11-13. But blacklisted tax havens, emboldened by the US stance, are still demanding answers and clarification about the dying 'harmful tax competition' initiative.

200 ECONOMIST OPPOSE O.E.C.D.

MILTON FRIEDMAN, the celebrated Nobel Prize winning economist joins 200 colleagues asking Pres. BUSH to stop the phony OECD attack on "harmful tax competition."

CALL FOR CAYMANS REVERSAL

GRAND CAYMAN, BWI: The Cayman Islands is asked to revoke its letter of commitment to the OECD's high tax campaign.

PACIFIC TAX HAVENS RELIEVED

The COOK ISLANDS and other Pacific tax haven nations welcome an end to the OECD's campaign in the wake of the US policy reversal.

U.S. SENATE PROBES OECD FINANCES

Demands for an accounting produce a pledge of OECD cooperation.

U.S. RADICAL LEFT ATTACKS BUSH, O'NEILL

Mother Jones has a fit over the new US pro-tax haven policies.

HOW WE GOT WHERE WE ARE

A UK law firm provides a lengthy history of the OECD, FATF campaign against tax and asset haven nations.

BERMUDA NOW WORLD TAX COLLECTOR

HAMILTON. As of June 1, all tax evasion becomes a crime in no-tax Bermuda, allowing foreign tax authorities to pursue their citizens suspected of tax evasion, as well as their asset here.

BAHAMAS TAX INCREASES?

NASSAU. A few days after he promised "no new taxes, the Finance Minister says "may be" to new taxes.

PANAMA COMMENTARY

Derek SAMBROOK's latest observations on the offshore scene, as seen from one of the remaining tax/asset haven nations.

BRIT LABOUR ATTACKS BELIZE

The fiscal militants of Britain's left pursue their vendetta against offshore jurisdictions in general and Belize in particular.

CARIBBEAN STING

BRIDGETOWN. The government of BARBADOS says it will use sting operations to ferret out financial scams.

ANTI-TAX HAVEN PROTEST TARGETS JERSEY

ST. HELIER. This Channel Island braces for French "anti-tax haven" protesters coming ashore this weekend.

MAN COMES IN FIRST

DOUGLAS. The Isle Of Man wins the annual "Best International Financial Services Center Award."

SWISS-LEICHTENSTEIN SECRECY PLEDGE

Top leaders of both nations pledge continued financial and bank secrecy.

FREE COUNTRIES?

Only 12 free nations out of 161 remain. That's only 7% of the world's countries. 10 of the 12 free countries are among the world's smallest, so freedom occupies less than 7% of the world's land mass.

ENLIGHTENED BLAIR SAYS HIGH TAXES BOOST OFFSHORE

LONDON. Running for re-election, the British PM admits high income taxes drive citizens offshore.

E.U. WITHHOLDING TAXES AGAIN

BRUSSELS. The EU is still talking about imposing taxes on non-resident savings interest, but the UK balks.

IRISH TAX AMNESTY

DUBLIN. I£700 million may roll in before a deadline for voluntary disclosure by tax evaders hiding cash in non-resident accounts.

EVERYONE A GREENSPAN

ZURICH. A new downloadable PC game allows you to hone your skills as a central banker, courtesy of the Swiss National Bank.

TAIPEI, TAIWAN. "Money laundering crackdown reveals hypocrisy of rich," says our Asian correspondent.

GENEVA. New Swiss software helps money managers spot clients engaged in suspicious activities or dirty money transactions.

Information on Swiss anti-money laundering laws (English),

BRUSSELS. The EU's top police agency, Europol, is investigated by Dutch criminal authorities for alleged fraud and money laundering.

The very same Europol warns the new E500 bill, worth about US$425, could increase and make easier money laundering.

LONDON. New Labour's latest anti money laundering proposals are protested for forcing accountants to spy on clients.

LONDON. A UK court upholds banking privacy, refusing to allow the Home Secretary to trace alleged corrupt money in the absence of prior proof of a crime.

BRUSSELS. As the euro conversion nears, all cash transactions are booming, especially in Ireland.

POLICE FEAR EURO NOTE CRIME WAVE

The high value of euro banknotes may make financial crime easier by enabling criminals who transfer cash across borders to cram more money into briefcases, European police fear.

Europol, the European Union law enforcement agency, has warned that the existence of a E500 bill -- worth approximately $425 -- could lead to a rise in money laundering after the introduction of euro notes and coins in January.

"Law enforcement authorities fear that especially high denominations (of E200 and E500) may facilitate the process of money laundering," Europol said in a report.

"During the change-over period an increase in suspicious transactions is foreseen," it added.

In 11 out of the 12 eurozone countries, the highest-value euro banknote - the E500 - will be worth more than the biggest domestic note.

In Luxembourg, where the most valuable banknote is 5,000 francs, the E500 will be equivalent to 20,117 francs. In Greece, the E500 will be worth 17 times the highest drachma note.

The highest denomination of the US dollar in general circulation - the currency of choice for organised crime - is $100, equivalent to E125.

"If you were to design a system to facilitate money laundering, then the large euro note would be what you would design," said Michael Levi, professor of criminology at Cardiff University.

Officials at the European Central Bank, which is co-ordinating the changeover to the euro, say six countries - Austria, the Netherlands, Finland, Belgium, Italy and Germany - already have banknotes worth about E200 or more.

They argue that E500 bills will only make up some 3 per cent of the 14.25bn notes to be issued from January 1.

SECOND NICE POLL SEEMS CERTAIN

The Irish Government is seeking a way out of the crisis caused by the rejection of the Nice Treaty. The result was greeted with shock and dismay throughout Europe.

The Taoiseach, who last night said he was "deeply disappointed", will travel to Gothenberg next Thursday for an EU summit which will be overshadowed by Irish voters' rejection of the treaty by 53.87 per cent to 46.13 per cent.

Mr Ahern and his EU counterparts will discuss how best to lay the ground for what will almost certainly be a second referendum on the treaty before the end of 2002 deadline. However, prominent No campaigners last night rejected the idea of another poll, with Mr Anthony Coughlan describing such a suggestion as "shameful".

Preliminary discussions on how to proceed will begin when the Minister for Foreign Affairs Mr Cowen meets his 14 opposite numbers in Luxembourg on Monday. But there is no Government plan at this stage to deal with the result, which took the Coalition by surprise.

The treaty was rejected by 53.87 per cent of voters, with 46.13 per cent voting to approve it. Just 34.79 per cent of the electorate voted, the lowest turnout in the five EU referendums since 1972.

IRATE IRISH REJECT NICE

DUBLIN. Having had enough, voters in Ireland reject the European Union's Treaty of Nice, causing an EU constitutional crisis.

But the EU says it does not care what the Irish people want.

THE OECD BATTLE REPORT

The Center for Prosperity & Freedom sums up the anti-OECD battle in a memo to tax haven leaders.

In EUROPE:

* SWISS bankers try US damage control. LINK: here.

* LUXEMBOURG shaken by money laundering charges. LINK: here.

* IRELAND & LUXEMBOURG are set for a mutual fund boom due to new EU securities rules. LINK: here.

* LIECHTENSTEIN is still raking in cash, even as it cleans up it anti-ML laws and image. LINK: here.

* CYPRUS-RUSSIAN CONNECTION. Millions in funds from Cyprus banks gush back to Russia. LINK: here.

OFFSHORE U.S.A.?

DENVER, Colorado. Would anyone outside the US in his right mind voluntarily submit cash to the jurisdiction of the IRS, the US judicial system and American trial lawyers?

TAX FREE CANADIANS

Unlike US citizens forever doomed to pay taxes, Canadian citizens can become non-residents and bid Canadian taxes good-bye.

AMERICAN COLONIALISM

KWAJALEIN ATOLL. Having unjustly tarred the Marshall Islands for alleged money laundering, the US government treats its inhabitants like colonial vassals.

GRENADA BANK LAWS TOUGHER

ST. GEORGE's. Pending an OECD review, the government says it will impose stricter offshore financial laws.

OECD THREATENS US LAWS

Noted offshore legal expert, Bruce Zagaris, explains.

EURO PANIC

Europe is bracing for strikes, mechanical breakdowns and an epidemic of scams when its new bills and coins arrive on January 1st. Is the euro monster really that dangerous?

U.S. TRIAL LAWYERS

Yet another reason Americans move their finances offshore; the rapacious greed of litigious US attorneys.

SWISS NIX CAPITAL GAINS TAX

BERN. The Swiss parliament rejects a proposed 25% CG tax on the sale of shares and bonds.

HIGH TAXES = BLACK MARKET

ATHENS. A highly politicized GREEK tax system causes tax evasion and a black economy of 30% of its GDP.

U.N. URGES RUSSIAN CRACK DOWN

MOSCOW. The UN says Russia's government must stop an estimated US$3 trillion annual dirty money flow.

EVERGREEN OFFSHORE FUND FRAUD

Evergreen Securities, a $218 million fund in Orlando, Fla., leaves 2,000 offshore investors in the hole.

Grand schemes: the shadowy man allegedly behind the fraud,

CANADA M.L. LAW FAULTED

OTTAWA. Canadian plans to halt money laundering are doomed, says a leading criminal law expert.

BERMUDA REAL ESTATE

HAMILTON. As luxury condominium and residential units are built, Bermuda is becoming more attractive to wealthy foreigners.

COMPUTER VIRUS NOTIFIES POLICE

Consider the wider implications of a new rogue "worm" that invades your computer, looks at your files, then reports you to the police.

U.S. FBI CAN INVADE FOREIGN COMPUTERS

A federal judge rules that FBI agents can download evidence from computers of suspects outside the US, that foreign PCs are beyond protections of US law.

U.K. CYBER COPS SNOOP SOFTWARE

New trojan software allows police remotely and secretly to monitor in suspects' computer activities anywhere in the world.

US POLICE GET MEDICAL RECORDS

US police searching for criminals may get broad access without a warrant to private medical records.

PGP AT 10

Phil Zimmermann's Pretty Good Privacy encryption software was first released on June 5, 1991.

GOING POSTAL

The U.S. Postal Service conducts constant customer surveillance program, reporting suspicious activity to the police.