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Issue 8 |
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News from Anguilla Please feel free to contribute to, reply to, comment on or (Heaven forbid) correct any item in these newsletters. Send an e-mail to: newsletter@ceg.ai Your input will be discretely disseminated. Another angle on the legality (or otherwise) of the IRS and US Income Tax. Earlier in the week I checked out some spam which directs the reader to: http://no1040s.com/notax/index.html It throws up interesting, if yet more unorthodox reasons for leading people to believe that there is no valid reason for most US residents to pay tax. One has to suspect that someone, somewhere, has got it wrong; time will tell. It would certainly be nice to see if a legal challenge would succeed, as otherwise it would be fair to assume that the status quo would have to apply. It has to be pointed out that millions of people, in accounting, tax preparation, law and "offshore" would be out of a job if it were proven that the IRS etc. were one big example of "smoke & mirrors"! Having effectively declared an interest, one will now walk away from it all…. Latest News from Anguilla.... On Monday, 28 February, the new National Bank of Anguilla building will be opened to the public. It was designed, with major input from the directors and senior staff of the bank, by David Kenworthy who has, as credits, many of the buildings in that area (Court House, Police Station, Companies Registry, Post Office). The contractor was Orchard, Romney & Beck the well-known local firm, which has a branch office in Staten Island;-). Subcontractors apparently ran to a cast of thousands. The present building, built for the then Bank of America in 1980, will be demolished over the course of the next few weeks and replaced by a 3-storey building. Another example of the changing face of Anguilla, reflecting the confidence of investors in the future of the local economy. On the political front: By this time next week we should know who the members of Government will be, after the 3 March election. At the moment there are surprisingly few posters or boards up: contrast this with nearby St. Maarten where it is effectively Christmas time for the printing industry each time local or Federal elections come round, and where every utility pole, blade of grass and passing stray dog ends up being adorned with as many posters as it can handle. What few posters etc. are in place are from the (opposition) United Front or its supported candidates. Each day, loudspeaker vans patrol the roads, exhorting the electorate to "Come One, Come All" to that evening’s outdoor address by that party’s candidates; on Friday, while paying our Cable TV bill, one such vehicle was driving past and added the words (echoing the advice, and thus seemingly seeking the subliminal endorsement of the Council of Churches), "…And let your conscience be your guide". This drew the acid observation from the person behind the counter that if the politicians had let THEIR consciences be their guides, in the 50 weeks since the last election, there would be no need for this election! The stump speeches from the hustings, delivered by the candidates that I’ve heard are getting more intense. The focal issue appears to be the character of the former Minister of Finance and consequently the long-term prospects of the (opposition) United Front, effectively leading to the bizarre situation that it is the opposition, not the Government (on its record) that is having to defend its position against charges levied by parties on both of its flanks. Some of the constituency results will be too close to call, but it is quite possible that all 7 incumbents will be returned (again). If so, there would be a new Government (the United Front). As mentioned in a previous article, this would surely be the only time in modern history in the world, where everyone gets re-elected and this results automatically in a radical change of government. For many in Anguilla, we will effectively have a 4-day weekend. Employers will give their workers time off, on Friday, to vote (this will account for at least 2 or 3 hours off for those who get up to vote at the crack of dawn; all day for most others). Then it would be a break with modern tradition here if there were not a proclamation of a national holiday/day of deliverance on Monday. It has been drawn to our attention that there is also a lesser-known election going on in the USA. An interesting web-site on this includes a section where it lists who, in a zip code area, has donated to which candidate/PAC. So you can see who your neighbour is bankrolling (and vice versa). Find it all at: http://politicaljunkie.com/index.htm Raising the profile This past week, viewers of the US network, NBC’s "Ainsley Harriot Show" would have seen quite a bit of Anguilla on the "Tropical Heatwave" segment. It featured footage of Anguilla and broadcast the Anguilla Tourist Board’s toll-free number each day. Anguilla was also featured on the programme’s website. Part of the promotion was a free vacation package, to be given out to that day’s lucky winners. Annual Crypto Conference This week Anguilla hosted the planet’s fourth Financial Cryptography Conference. Board member Robert Hettinga described it as "the best yet" and noted "several multi-million dollar businesses have started out of past conferences" (all hosted in Anguilla.). Some 140 delegates flew in for it, from around the world. It aims to bring together persons involved in both the financial and data security fields, to foster co-operation and the exchange of ideas. Several papers were presented, including one on "payments through the Internet" which was followed by a panel discussion at which several companies put forward ideas, and electronic postage facilities which may eventually replace postage stamps. Many of the theoretical concepts explored when the International Financial Cryptography Association was initiated have now become very real in the world – an indication of the rapid rate of change in this area. It is possible that the success of this organisation, in attracting so many of the brightest minds from some of the best-known companies in the world, may decide that the facilities in Anguilla would become inadequate; therefore it remains to be seen where the fifth conference will take place. The following material is courtesy of OFFSHORE ROUND-UP: An OFC publication (which also holds the Copyright 1999) – please contact "Offshore Canada" for subscriptions: AUDITORS EMBROILED IN LAWSUITS A recent spate of high-profile lawsuits against Big Five accountants has the accounting firms scrambling to re-invigorate their risk management programs. PwC, the world's largest auditor, was hit in December with a lawsuit against Chuo Audit, a Japanese affiliate firm. The same month it also reached an undisclosed out-of-court settlement with Standard Chartered bank, over a damage claim of $350 million for faulty auditing. Ernst & Young said it had agreed to pay $335 million to settle shareholder litigation connected to accounting irregularities at CUC International, which it audited. Observers suggest the large settlements may stretch the insurance taken out by the firms. Any shortfall then comes out of partners' pockets. A 1998 study by the international federation of accountants found that litigation had an appreciable economic fallout. Risk management focuses on not just improving practice, but also on vetting clients to ensure that the business is not too risky and that the reputations of directors are sound. WEB SITE OFFERS HEDGE FUND TRADING PlusFunds.com, a web site that provides real time information on hedge fund performance, is participating in a joint venture with the Bermuda Stock Exchange (BSX) to offer online trading of hedge fund shares. Investors will be able to deal in fund shares starting in March through the PlusFunds platform, with trades settled over the BSX. The market, called Global FundTrader Plus, will operate 22 hours a day, six days a week. The venture is trying to change the nature of the sector from one of low secondary trading to something similar to mutual funds, which have a liquid secondary market of buyers and sellers. The company says it has signed up several large banks and brokerages to act as a secondary market. Under US regulations, the exchange would be open to offshore individual investors and tax-exempt US organizations such as pension funds, endowments or charitable trusts. However, it would be closed to US individuals. Scams section. This week – Loan scams (courtesy NFIC – see number below): Scenario: You are offered an unsecured loan for your business, even though you may have credit problems. Scam: You have to pay a fee in advance, and the loan never materialises. Talk to your own bank about a loan before considering other sources. You're more likely to get help from a financial institution that you already have a relationship with than from someone who doesn't know you or your business. If your bank turns you down, ask why and whether there is anything you can do to change that decision. Perhaps you can put up some collateral to secure the loan or get a co-signor who will agree to share responsibility with you. Don't believe advertisements promising loans regardless of past credit problems. If you have bad credit, it's unlikely that any legitimate bank or other financial institution will give you a loan. Be especially wary of unsolicited calls, e-mails or letters offering you a loan. You could be the target of someone who wants to take your money, not lend it. Requesting a fee up front for "processing," "application" or the "first month's payment" is a red flag of loan scams. Legitimate lenders don't require payment in advance of approving loans. Once you fall for a loan scam, the crook may try to get even more money by telling you to send another payment to a second company to complete the loan process. Before you sign on the dotted line, get all of the loan terms in writing, including the payment schedule and interest rate. If the lender isn't familiar to you, contact your state banking department (or provincial equivalent) and ask how to confirm that it's licensed and operating properly. If legitimate lenders have turned you down, the central/federal government may be able to help you get a loan. Contact the Small Business Administration to find out about the eligibility requirements. Report loan scams to law enforcement authorities and the Better Business Bureau. If you need advice about a solicitation or you want to report a possible scam, call the NFIC hotline at 1-800-876-7060. You can also ask questions or report fraud using our online forms. Finally As mentioned before, the web page of C.E.G. is being redesigned and rebuilt. Check it out at http://www.ceg.ai Best wishes, Graham |
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