The proverbial question whether any person or creature has the ability to change its innate being comes to us from the Bible, Jeremiah 13:23, in which we are asked by the Prophet: "Can the Ethiopian change his skin, or the leopard his spots? Then may ye also do good, that are accustomed to do evil."
Without more, Jeremiah's admonition would seem to suggest that change of one's innate nature is not to be expected, indeed may be impossible.
So it also may be with tax havens and their rulers.
I raise this question in light of a press release this week announcing that the government, (such as it is), of Monaco has hired a trio of public relations experts "to help the tiny Mediterranean principality shed its image as an international tax haven."
A polling expert, a former journalist and an advertising consultant from the Young and Rubicam agency will devise Monaco's fiscally-virtuous new image. Monaco will spend €500,000 (US$704,000) for research into the make over, including asking a panel of international personalities "What Monaco should be." The image campaign is to be launched in 2010 and last several years, with a budget expected to reach into the millions.
Well, dear readers, Monaco is and has been a "tax haven"-- and no amount of costly public relations campaigns is going to change that fact.
A Listing and De-Listing
But like many suddenly self-conscious tax havens, Monaco (or perhaps its ruler, Prince Albert) is suffering a case of nerves, a reaction to the verbal onslaught of the G-20 high tax nations and their scolding mouthpiece, the Organization for Economic Cooperation & Development (OECD) which arbitrarily placed Monaco its gray list of "uncooperative" tax havens.
As did many other OECD-accused tax havens, Monaco quickly agreed to cooperate in exchanging tax information, praying for early OECD absolution.
So Monaco was removed from the phony OECD "black list" of financial centers in April but remains on a G-20 "gray list," which it hopes to leave by the end of the year with elevation to the celestial purity of the OECD "white list."
Reputation is All
"The idea has been floating around for months but the decision was obvious after the G-20 summit," said officials in Prince Albert II's administration. "The principality has said it hopes to leave the gray list of tax havens by the start of 2010, that is when we need to be ready to change our reputation."
Fall from Grace
Yes, as I have previously commented in these pages, Monaco is a tax haven for the exceedingly wealthy – and great wealth is what it takes to afford living here. If you want to make this your permanent home, it helps to have more than a modest amount of money and an assured income for life.
And it doesn’t hurt to know the Prince and the wild royal family, a bunch that makes the British royals look like saints. We even have a few Sovereign Society members who live in this tiny land of the super privileged, where the fairy tale Princess Grace died in a car crash in 1982 and everyone seems never top have gotten over it.
Most of the streets are named for the copious members of the Monegasque royal family, the Grimaldis. This week those streets are hosting the Pez Cycle Races, (whatever that is).
Medieval Origins
There was a distant time when Monaco was little more than an inhospitable rocky peninsula offering a natural seaport for nearby fishing villages. Since those ancient times, Monaco's history has been inseparable from that of the Grimaldi family that has its origins in the 10th century AD.
No doubt, shedding the tax haven image PR campaign was the brainchild of Monaco's current ruler, Albert Alexandre Louis Pierre Grimaldi, a.k.a. Albert II, Sovereign Prince of Monaco, the head of the House of Grimaldi, 32nd hereditary ruler and son of the late Rainier III, and his princess consort, the late Grace Kelly of Philadelphia and Hollywood. Albert got his current job in April 2005 upon the death of his father.
Very Model of a Modern Prince
From the star, Prince Albert made public noises about being concerned about poverty, the environment, polar bears and global warming.
A few years back he spent some time at the North Pole, and this year at the South Pole. His environmental concerns seem not to extend to over population. His Highness acknowledges having a son out of wedlock by an airline stewardess from Togo, and another by a California women. But then, illegitimate kids are nothing new in the star-crossed Grimaldi family.
Albert had been in the princely palace but a few months when he announced: "We must absolutely free ourselves of this equation that Monaco equals money laundering." While insisting that tougher laws were already in place, he conceded: "We perhaps have lacked vigilance." Do you (and the Russian mafia) think so?
In a tax haven with about 33,000 full time residents, there are 130,000 banking clients with deposits worth nearly US$100 billion, according to the Monaco Banking Assoc. Hmmmmm!
Change You Can Believe In
Well, if Prince Albert the Bald and his counselors are really serious about ending their tax haven status, may be they should close down the casino at Monte Carlo with all the millions of dollars, euros, etc. that are gambled away. That would repel all those hedonistic rich folks.
Albert and his counselors also could impose taxes on the comfortably wealthy people who now live there tax free, many of them millionaires and billionaires, retired and enjoying the good life.
Or the local tax laws could be changed to bring all Monegasques, (not just those who are French, as is now the law), under the onerous French tax system. No doubt the anti-tax haven French president Sarkosy would like that.
Way back in the 1400s a younger son of the Grimaldi branch of Antibes, Lambert, became lord of Monaco at a time of deep uncertainty. It is said he was a noteworthy ruler who handled diplomacy and the sword with equal talent, although his views on polar bears and tax havens are unknown.
Lambert bravely established the independence of Monaco, receiving widespread admiration to the point where his favorite expression, "Deo juvante" ("With God's help"), became a motto for many Grimaldis.
May be Albert should save the millions he plans to spend on PR and just pray. With God's help, maybe he can convince the world (and the OECD) that Monaco is not a tax haven.
* The Sovereign Society can provide members with professional contacts in Monaco upon request. I also have a chapter on Monaco in my latest version of The Passport Book, or explore possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World, a new edition son to be published.







