Corporate Frauds by Banerjee Robin;

Author:Banerjee, Robin;
Language: eng
Format: epub
Publisher: SAGE Publications
Published: 2021-11-10T11:42:44.571329+00:00

Tailpiece

Billions of dollars of dirty money are being split into smaller parcels and getting washed through the banking channels every year. It's another ploy to beat the system. Corporate crime is simply getting dirtier and smarter, in spite of thousands of government officers trying to unravel the mystery of missing taxes and establish the trail of dirty money.

Swindlers are skilful and supple. Smurfing is a smart scheme to beat the system.

Offshore Banking

Just imagine that you have loads of money but would not like to subject it to tax so that you can enjoy the spoils in full.Would it not be wonderful if you can somehow send the money to a lovely foreign destination and park it in a bank account which keeps your name secret and the wealth untaxed? The bank account will typically be accessible to you whenever you want either for your ensuing exotic holidays or to make fat investments in friendly geographies. This foreign anonymous bank account is known as offshore bank accounts.

As the name suggests, ‘offshore banking’ involves having bank accounts located outside the home country in a country where there exists a lax banking and taxation system. They allow for the establishment of accounts from non-resident individuals and corporations.The countries where these bank accounts are opened are usually nil or minimal income tax regimes. These geographies are commonly known as tax havens.

These banking practices are facilitated by many countries allowing anonymous banking. Willy-nilly, the banks located in certain countries having well-developed offshore banking system follow loose anti-money laundering regulations. Fraudsters take advantage of these laxities. Money launderers often send money through various ‘offshore accounts’ to countries which have banking secrecy laws.

Clients operating through offshore banks sometimes practise hundreds of complex bank transfers to and from these banks, so as to help erasing, as much as is possible, traceability of fund sources.

The prime purpose of tax havens is to allow the super-wealthy people to keep their money in offshore accounts for tax avoidance and other purposes.

These are also known as offshore financial centres.These tax shelters are often small geographies, low-tax jurisdictions in remote locations, like the Caribbean islands. In these places, wealthy individuals often hold money within shell companies and anonymous entities.

Switzerland and the Cayman Islands are the most popular destinations for offshore banking.These names follow a rather long list of tax havens, such as the Bahamas, Barbados, Belize, Bermuda, the British Virgin Islands, Cyprus, Curacao, Dominica, Gibraltar, Ireland, Jersey, Liechtenstein, Luxembourg, Nauru, Malta, Macau, Mauritius, the Marshall Islands, the Netherlands, Panama, Taiwan, Samoa and the Seychelles.

It may be noted that when someone's money is nicely stacked in a tax haven, it is keeping itself outside the tax net. Tax laws in most countries insist that their country residents need to report any offshore bank accounts they may be holding. However, offshore banking institutions are generally not obligated to declare any bank holding to foreign tax authorities because they are protected by banking secrecy laws of the jurisdiction where the bank is located.

Offshore bank accounts thus tend to provide financial and legal benefits and serve the purpose of ‘layering’ of funds.

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