Offshore Asset Protection BLOG - Bob Bauman

No Way Out -- or an Exit Strategy?

I travel a lot on airplanes, notwithstanding the fact that the very first time I flew, (on an Eastern Airlines DC-3 in 1947) the plane crash landed. (I've written about that interesting experience of my youth before).

I always ask for an exit row seat when I fly, if I can get one, and not just for the extra leg room. If I can't get an exit row, I make sure to notice where the exits are and listen to the now familiar instructions of the staff or the video.

Similarly, from time to time you read about the horrendous loss of life in nightclub fires when exits are locked, or insufficient to allow egress in an emergency. On November 28th 1942, a huge fire occurred at the Coconut Grove Night Club in Boston. 492 people perished because the only exit was one revolving door. In 2003 one hundred people died and 230 were injured in a Warwick, Rhode Island nightclub fire because of lack of exits.

Plan Ahead

Perhaps I am being overly dramatic, but I personally believe the current situation in the United States, politically and economically, is as serious as it has been at any time since the Japanese attack on Pearl Harbor on December 7, 1941.

So serious that reasonable people now should be considering what they might do if things become so dire that an escape from America becomes necessary.

Frankly, in all my years I never thought I would reach the point that I would counsel people on how to move their assets and their selves away from what I still consider to be one of the greatest nations on earth.

But the America I knew as a teenage page in the U.S. House of Representatives and later as member of that body, has changed -- and not for the better.

Foresight

The Sovereign Society was founded by patriotic Americans and citizens of other nations who, more than a decade ago, recognized the growing trend against individual liberty for the very real threat that it was and is. Since then our membership has grown considerably.

I believe much of that growth is attributable to the fact that we offer not only a philosophy of freedom, but concrete plans that can be followed, both now and should implementing an exit strategy become necessary. That day may be closer at hand than we want to admit.

I have traveled all over the world, met thousands of people concerned about their family's future and the ability to avoid stultify taxes and government controls. They often ask: "What can I do?"

Join Me in Los Cabos

That's why I suggest to you that you should be at the Third Annual Offshore Advantage Seminar, a Beginner’s Guide to the Offshore World, November 4, 2009 – November 7, 2009 at the Westin, Los Cabos, Mexico.

There you will find the answers to your questions, as well as that exit strategy.

I'll be there, along our executive director, Erika Nolan, and many professional members of our Council of Experts from all across the offshore world. Attendance already is the largest we have ever had and I can guarantee, along with the valuable education, you'll have a great social time as well.

Where else could you confer, one on one, with so many leading offshore experts?

You'll come away with not just an "exit strategy" but with a whole new understanding of the many possibilities that exist in offshore banking, asset protection, investing and tax deferral.

I hope to see you there. As they say, "Come on down."

All the best and in the name of personal freedom,

 

What's An Andorra?

The British travel web site, Gadling Travel, posed that question on Friday. Since I regularly prowl the Internet looking for tax haven news, I discovered that the provocation for Gading's question was, as they said, "...this spectacular shot (below) from the Incles Valley in Andorra, the tiny 181-square-mile country located in the Pyrenees Mountains between Spain and France."

The Gadling writer added: "Because I don't know a damn thing about Andorra, and this photo has convinced me that I should, I've conducted a very small amount of research about the principality (read: looked it up on Wikipedia).

"Here's what I've come up with: Andorra is well known as a tax haven, which would be useful information if I had any money; Andorra's inhabitants have the highest life expectancy in the world at birth-- 85 years; There are no airports or universities in Andorra. [My note: the first airport opens early in 2010, as I reported last year.]; Andorra's name is thought to be derived from a word which means "shrub covered land."

Yes, You Can Get There

As regular readers know, I've written about Andorra a fair amount, since it is tax haven worthy of consideration.

It is indeed a tiny, mountainous country with no taxes, no army and no poverty. Until 2010 when its first and only airport plans to open, it has been accessible from France or Spain only by motor vehicles over mountainous roads in journeys that take many hours, depending on weather conditions. The country’s standard of living is high, the cost of living relatively low and the scenery delightful.

And even though the government has announced that it will comply with the OECD Article 26 standard on sharing tax information, the principality still has one of the strictest financial privacy laws in the world.

Biblical Moniker

But there's another version of how Andorra got its name.

According to local legend, Charlemagne, Emperor of the Holy Roman Empire,(right) gave Andorra its name. Gazing over the mountain region newly wrested from the Moors of Spain, the Emperor is said to have exclaimed, “Wild valley of hell, I name you Endor!”

It would appear that Charlemagne was a biblical scholar, because the Valley of Endor, at the foot of Mount Thabor in the Holy Land (below), was the campsite of the Israelites during the war against the Canaanites. Who knew?

Read All About Andorra -- and Lots More

In my latest (7th) edition of The Passport Book, you can learn all about residence and living in Andorra, as well as the specific residence and citizenship requirements of nearly 100 countries worldwide that could be your new home place, whether you're American or other nationality. My new book will be "hot off the presses" next week. Click here for more information and advance orders.

The Sovereign Society is the recognized voice in the complex offshore world.  Join the Sovereign Society and keep informed.

More U.S. Wealthy Opt to Surrender Their Citizenship

That headline in The Wall Street Journal (17 Aug) over an article by David Bain, may have surprised some, but here at the Sovereign Society we've been observing this phenomenon ever since out founding in 1997.

Indeed, the growing trend of Americans voluntarily ending their status as U.S. citizens -- the only legal way by which they can escape U.S. taxes and government controls -- has reached a new peak and shows no signs of abating.

The Journal reporter saw this trend in part as being due to offshore tax havens having been forced to surrender to tax information transparency demands by the major high tax welfare states.

I think that misses the more fundamental causes as to why many more Americans, both wealthy and middle class, are handing in their U.S. passports and moving abroad. I'll explain in a moment.

Exit Price

As proof of the increased numbers of American expatriates, private client lawyers and relocation specialists report a surge in wealthy Americans already living abroad who are prepared to give up their citizenship to avoid the scrutiny of U.S. tax authorities.

(They may not realize that prior U.S. tax obligations do not end when citizenship ends, although future U.S. taxes can be avoided).

Interestingly, although such a move offshore means departing Americans may have to pay an exit tax that the Democrat Congress and George Bush imposed in 2008, lawyers say this is a price people have become more willing to pay this year, now that recession and decreased asset values has reduced the size of this onerous and unfair tax.

(For my explanation of the exit tax and to whom it applies, click here. You may also want to read The Expatriation Report which I also authored).

Cruising Mega-Yachts

Needing a colorful angle for his story, the WSJ's Bain conjured up a fanciful picture: "Many ultra-wealthy individuals who have chosen to become stateless now cruise outside coastal waters in their mega-yachts in the belief that if they stay on the move, tax authorities will not be able to catch up with them."

Bain continued: "One analyst who did not want to be named, has estimated the number of stateless tax evaders amounted to a few thousand. This implies the quantity of money outside the grasp of global tax authorities could be trillions of dollars."

Liberty a Major Concern

I advise and have discussed the issues with scores of Americans who are considering acquiring a second passport and citizenship, (an absolute necessity before giving up U.S. citizenship).

I can tell you that while some are motivated by taxes, most are fed up with stultifying controls and interference by government and by what they see as President Obama's radical socialization of a once great nation many no longer recognize as the country of their youth.

Numbers Game

Official figures on Americans who end citizenship are reported by the IRS every quarter. In the first half of 2009 only about 90 people gave up citizenship. But one prominent lawyer, who did not want to be named, said: "There has been for some time a view that the IRS has been under-reporting these numbers."

My friend, whom I have often quoted, John Gaver, who edits the conservative web site Action America looks at this from a different angle: "What these lists fail to show is the vast and increasing numbers of wealthy U.S. citizens who are just ‘dropping out’ – taking all of their wealth and leaving the U.S. without renouncing. They just disappear off the U.S. tax rolls and appear on some other country’s tax rolls."

Fear Factor

Anecdotal evidence also suggests there has been a surge of inquires from Americans who are considering acquiring citizenship of another country.

Our long time associate, Christian Kälin, managing partner and citizenship planning consultant at Henley & Partners in Zurich, said his firm has had a big rise in such inquiries.

In Chris’ opinion: "Tax reasons might be the biggest reason why U.S. citizens will want to drop their passports, but security issues will also influence their decisions. For example, we saw a huge surge in inquires from U.S. citizens contemplating acquiring an alternative passport after the Mumbai killings."

New Passport Book Edition

In my latest (7th) edition of The Passport Book, you can learn all about how Americans legally can escape U.S. taxes by expatriation, whether the U.S. exit tax applies to you, as well as the specific residence and citizenship requirements of nearly 100 countries worldwide that could be your new home place, whether you are American or any nationality. The book will be "hot off the presses" next week. Click here for more information and advance orders.

The Sovereign Society is the recognized voice in the complex offshore world.  Join the Sovereign Society and keep informed.

Government Flying Out of Control

In The Federalist No. 51, published February 6, 1788, James Madison warned us: "In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."

On that topic of government out of control, a Sovereign Society member who is a U.S. citizen and a licensed private pilot has directed my attention to yet another loss of freedom in the specious war, supposedly to counter terrorism.

Starting Wednesday, May 20, 2009,a mandatory rule issued by the U.S. Customs and Border Patrol (CBP) of the U.S. Department of Homeland Security (DHS), requires pilots to obtain prior written government permission for each private airplane (and each of its occupants) to depart on an international flight, or to return to the United States.

The rule requires "the identification and vetting of individuals on private aircraft, prior to entering and departing U.S. airspace" including identifying those who are U.S. citizens and those who are aliens.

Miraculously, the DHS/CPB promises that this pre-flight permission procedure will be done "by automation" within 60 minutes in most cases. (The rest will just have to wait).

Unbelievable

Read these stats and see if you believe that 60 minute promise.

According to the Federal Aviation Administration, in the United States there are about 240,000 private pilots, using 19,000 U.S. airports, (14,000 of them private), flying 220,000 private aircraft. In 2006 there were 140,000 private international U.S. aircraft departures and landings, carrying almost a half million passengers.

In justification of this rule Homeland Security assures us that it will allow them "to assess the threat presented by the aircraft and persons on board prior to takeoff, and thus aid CBP in preventing terrorists or terrorist weapons from gaining access to an airborne aircraft" -- which, of course, assumes terrorists planning to drop a bomb will dutifully file accurate information!

People Control

The CBP web site soothingly tells us that "On a typical day, CBP welcomes more than 1.1 million international travelers into the United States...while assuring that individuals who have ties to terrorism or a criminal background are barred from entry."

Yes, well, we are all opposed to terrorism by terrorists, aren't we? But what about various degrees of domination inflicted by government bureaucrats on the citizens whom they are supposed to serve? For example, government's increasing use of passport issuance or denial as a means of coercion.

In the United States a citizen can be denied a passport simply for owing taxes to the Internal Revenue Service, or if they are in excess of $2,500 in back payments for court ordered child support. Passport issuance allows government to control, restrict, monitor, and record everyone's travels -- now extended to private plane travel as well.

Thought Control?

And what about barring travel or entry because of the unpopularity of one's political or other publicly stated opinions?

A few days ago the United Kingdom released a list of the names of 16 people not allowed into the U.K. because the person is "...someone who has fallen into the category of fomenting hatred, of such extreme views and expressing them in such a way that it is actually likely to cause inter-community tension or even violence if that person were allowed into the country."

Will the U.S. government honor this list in barring American travel to the U.K.?

Left at the Gate

DHS also requires airlines and cruise ships to get DHS individual permission ("clearance") for each passenger on commercial flights to, from, or via the U.S. Unless the DHS says "Yes," if the answer is "no" or "maybe", or if the DHS doesn't answer at all, the airline isn't allowed to give the person a boarding pass.

After June 1, 2009, American citizens and resident aliens (green card holders) must show a valid U.S. passport, passport or NEXUS card or other special travel document approved by DHS when entering the country by air, land or sea from Canada, Mexico, the Caribbean and Bermuda.

Will the new CBP pre-flight process cross-check to see if everyone on the plane has a valid U.S. passport? With tens of millions of passports being issued and re-issued, with name similarity, what are the chances of a mistake? Or check with the IRS about unpaid taxes?

Secret No-Fly Lists

And what happens when DHS vets private plane travel by comparing names with the infamous secret "no fly" lists compiled by the U.S. government? People have no idea how they got on these lists, and even though 30,000 have demanded their names be removed, the U.S. government refuses to do so in most cases.

That inane computer approach has been used to place untold thousands of Americans on banned air travel lists, including David Nelson (of Ozzie and Harriet fame), infants, a 4-year-old boy, the police chief of Northfield, Minn., Catholic nuns, the co-author of the book Bush's Brain , U.S. Rep. John Lewis (D-Ga.) and U.S. Sen. Ted Kennedy (D-Mass).

DHS : Man Caused Disaster

American liberty is under attack all right, yes by potential terrorists, but also by government bureaucracy.

Homeland Security (DHS) Secretary Janet Napolitano, (left) whose department promulgated the new private plane rule, is also the Washington champion of political re-branding. Madame Secretary managed to delivered her entire Senate testimony without using the word "terrorism," preferring to use "man-caused disasters." Those CBP bureaucrats better get that new word.

New Pass Laws

At this rate of lost liberty, it's just a matter of time before we'll all be forced to carry (and produce upon police demand), an official U.S. ID card, an approximation of the infamous "Pass Laws" used in apartheid South Africa.

Then comes the global positioning system (GPS) devices in our cars to track our movements, (already in use in the UK), the RFID chip under the skin, and eventually may be we'll all sport a bar code tattooed on our foreheads.

Perhaps many of those private aircraft, if they ever do get clearance to leave the United States, will decide not to return.

*******

While you can, there still are many legal ways to enjoy privacy, banking and save taxes offshore; Bob Bauman tells you Where To Stash Your Cash. If you're interested in living offshore, The Passport Book is just what you need.

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Haven Panama – With My Apologies

Earlier today (see below) I took to task one Frank De Lima, identified by Reuters as a "top economic adviser" to Panama’s president-elect, Ricardo Martinelli (left). My concern was a statement attributed to Sr. De Lima that: "The perception that Panama is a tax haven is totally false."

With my usual editorial restraint, I called Sr. de Lima’s statement stupid and false, suggesting he should be fired even before his job began, because he didn’t know a tax haven even when he was living in one.

Correction

Fortunately for the sake of truth and accuracy, our friend, Panama attorney, Rainelda Mata-Kelly, (left) and a member of the Sovereign Society Council of Experts, read my raving and quickly straightened me out.

She wrote: "The argument that Panama is not a tax haven is based on the fact that we do not discriminate between nationals and foreign residents. We tax everyone the same. Our territorial tax system, which was reluctantly recognized by the OECD as a valid tax system, only taxes income produced in the country and this applies to everyone, whether they are Panamanians or foreign residents doing business in Panama."

By that accurate definition, Panama is not a tax haven, rather a country with a territorial tax system that benefits those who wish to base their offshore business there and avoid taxes on that business.

Long History

Tax havens, suddenly in the news because of President Obama’s demagogic attacks and OECD blacklisting, have been around for a very long time.

In ancient Greece, some Greek islands were used by sea traders as places to stash their foreign shipments to avoid a 2% tax imposed by the city-state of Athens on imported goods. In the Middle Ages, Dutch traders in the Hanseatic League set up business in London where they were exempt from Netherlands taxes. Prior to the Revolution, smart American colonials traded through Caribbean ports to avoid onerous British taxes.

What Is a Tax Haven, Anyway?

I’m glad I asked that question. Let’s hope I can answer it satisfactorily.

Simply put, a "tax haven" is a jurisdiction where taxes are levied at a low rate or not at all. In that sense, the State of Florida, where I live, levies no income tax, so it is a tax haven.

Tax havens benefit individuals and businesses worldwide because they create tax competition among governments -- and that means choices and cost savings.

Avoidance, Not Evasion

Geoffrey Colin Powell, a former economic adviser to the tax haven Channel Island of Jersey, claims: "What identifies a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." (Keep in mind that tax avoidance is legal and smart. Tax evasion is illegal and dumb).

Some have suggested that any country that modifies its tax laws to attract foreign capital should be considered a tax haven. Others say the central feature is that tax haven laws can be used to evade or avoid foreign tax laws.

GAO Definition

In a 2008 report on the use of tax havens by American corporations, the U.S. Government Accountability Office never found a satisfactory definition of a tax haven but they suggested the following characteristics indicate a tax haven: 1) no or nominal taxes; 2) lack of effective exchange of tax information with foreign tax authorities; 3) lack of transparency in the operation of legislative, legal or administrative provisions; 4) no requirement for a substantive local presence; and, 5) self-promotion as an offshore financial center.

By some of these GAO standards, Panama might qualify be a tax haven.

Ring Fencing

What especially upset the anti-tax haven brains at the Paris mansion that houses the Organization for Economic and Community Development (OECD) was what they termed tax "ring fencing" -- meaning jurisdictions that offered favorable tax breaks to foreign companies and investors, but discriminated against locals by taxing domestic income.

Such two-tier tax systems have all but disappeared among smart tax havens who answered this complaint by abolishing all corporate taxes. Such zero tax regimes are now in place in the Isle of Man and the Channel Islands. By this measure Panama is not a tax haven.

OECD Nonsense

When the mighty G-20 met in London last month, these great statesmen, detached from reality, mounted their phony attacks on tax havens disregarding any of the definitions above.

For propaganda purposes, the G-20 leaders, (President Obama included), decided to define "tax haven" to suit their political and tax needs. Using taxspeak, it is what they say it is.

Thus tax haven now means any jurisdiction that does not automatically turn over to the U.S. IRS, or any foreign tax collectors, requested information concerning one of their citizens who dares to have an offshore bank account or to do business offshore – a nation’s bank secrecy and financial privacy laws, be damned.

Bottom Line

So now a "tax haven" is any place the tax hungry welfare states of the G-20 say it is.

But don’t let these left-wing tax hounds steal the right to define in this war of words.

You and I know that there are very strong moral, economic and political reasons for tax havens. Click on the preceding web link and Dan Mitchell of the Cato Institute will explain in even greater detail.

Thank you, Rainelda.

President Martinelli could use your talents in the new government. You made us realize that the Republic of Panama is, (and is not), a tax haven.

Either way, we still love Panama for no taxes, asset protection, maximum privacy and residence and citizenship for foreigners – and my apologies to Sr. De Lima.

Tips for the Sophisticated Fugitive

Every once and a while I'll get an email asking me to name a country where there exists strict bank secrecy guaranteed by law, easy establishment of immediate residence for foreigners, and no tax or extradition treaties with the United States.

The sender often wants the answer in a hurry.

Last Sunday an article in The New York Times asked the question why Americans in big trouble with the law don't just skip town (and country).

The Times wrote: "The Bernie Madoffs of the world, not just the Ponzi schemer himself but the rogue accountants, lawyers and hedge funders, walk meekly into federal courts with their rictus faces and ashen complexions and the expectation of long prison sentences, and a bystander can't help but wonder: 'Why not take the ill-gotten money and run?'"

Two Good Reasons

The answer to that question is two fold: 1) in the modern world, with instant communications, it is no longer so easy to disappear as it once was; 2) the United States currently has extradition treaties in force with over 120 countries.

 

Extradition refers to the formal process by which an individual is officially delivered from the country where he is located, (the requested county), to the country that wants him (the requesting country), in order to face criminal prosecution, or if  already convicted, to serve a sentence. The parties in extradition are the two countries and the individual who is the subject of the proceedings.

Exceptions to the Rule

As a general rule until recently, nations did not permit extradition for minor crimes or most non-criminal civil matters, such as unpaid taxes or private debts, failure to pay alimony or child support or fiscal offenses such as currency control violations. Victimless crimes such as prohibited sexual relations, slandering the state or refusing to abide by restrictions imposed upon racial or religious minorities, are also not included among extraditable crimes.

  
Some countries will not extradite if the possible punishment for the crime in the requesting country is death.

In theory, political offenses are not a basis for extradition, but defining "political" can be difficult. Tax offenses also generally have not been extraditable. However, fraud per se is an extraditable offense, and so a government that wants to pursue a tax case claims "tax fraud."

 

Good Old Days?

Once, the fugitive lifestyle was simpler.

 

The Times notes: "In 1972, the late Robert Vesco, the stock scammer and maker of illegal campaign contributions to President Richard Nixon,(left) landed in Costa Rica, donated $2.1 million to a company that just happened to be founded by the president's brother, Donald Nixon, and waited until (miracle!) Costa Rica passed a law barring his extradition."

Farther back in time, when the late and dapper Mayor James J. "Gentleman Jimmy" Walker of New York (left) faced rumors of bribe taking in 1932, he packed up his comfortably large mayoral fortune and repaired to the French Riviera, remaining in Europe until the whole thing blew over.

Clinton Got Rich (and visa versa)

Some do run. In 1983, while he was a prosecutor, Rudolph W. Giuliani indicted the commodities trader Marc Rich, who sought refuge in Switzerland. Mr. Rich, perhaps with the help of his wife's campaign donations and to the Clinton Presidential Library, experienced his own miracle in 2001, as outgoing President Bill Clinton pardoned him hours before leaving office.

The Times says: 'Many white-collar suspects are convinced they're too smart to be convicted: just let them testify, they think, they'll persuade jurors." One can guess that Bernie Madoff doesn't fall into this category.

Kidnaping as Extradition

But some years ago a disturbing trend involving wanted persons appeared among some nations

Without regard to formal extradition procedures, some fugitives were abducted by force from a foreign country and taken to another nation for trial and/or punishment.

A famous example of this kind of extradition occurred in 1960 when Adolf Eichmann was kidnaped from Argentina by Israeli agents. He was returned to stand trial in Israel for Nazi war atrocities committed during the Second World War, was convicted and executed.

America the Forcible

Surely the United States government would never engage in such an illegal act.

But, yes, the U.S. used the same tactic when the U.S. Drug Enforcement Agency (DEA) went into Mexico in 1990 and kidnapped Dr. Humberto Alvarez Maccan at his medical office in Guadalajara, then forcibly brought him to Los Angeles to stand trial for the 1985 murder of DEA agent Enrique Camarena.

A U.S. court found that Dr. Alvarez was abducted at gunpoint in Mexico by paid agents of the U.S., physically and psychologically tortured by his DEA abductors and injected with mind altering drugs. The doctor was freed by a U.S. federal judge and returned to Mexico.
 
In 1992, the U.S. Supreme Court reversed this decision, but by then the doctor was safe in Mexico.

In this extraordinary decision the Supreme Court ruled, in effect, it is legal for U.S. agents to carry out kidnapping anywhere in the world. Shortly afterwards, President George H.W. Bush (president 41) (left) issued a presidential Executive Order specifically authorizing U.S. agents to do just that.

Panamanian Pinched

In 1989 U.S. armed forces took the deposed Panamanian dictator, Manuel ("Pineapple Face") Noriega, (left) prisoner during the short-lived military attack on Panama. He was transported to Miami, where he was tried and convicted of federal drug and other criminal charges, in spite of defenses based in part on extradition law and treaties between the two nations, (and the fact that he had been a paid agent of the U.S. CIA).

Extradition of fugitives to the U.S. is governed by traditional treaties, but augmented by a newer series of so-called "Mutual Legal Assistance Treaties" (MLATs). These agreements promote cooperation in the exchange of information and evidence in criminal investigations. U.S. prosecutors have gained real power with MLATs in their arsenal. They can request search warrants be served in foreign jurisdictions, the freezing of foreign-owned assets before trial, and demand access to financial records located abroad.

What About You?

So how might this tangled web of extradition laws and treaties affect a foreign citizen living abroad?

As I said, extradition procedures depend on the specific terms of each bilateral treaty between nations, and are constantly under revision. In recent years the U.S. government has led demands for a broad definition of criminal acts warranting extradition.

Newer U.S. treaties and MLATs include mail fraud and money laundering as "extraditable offenses." (The American government always presses for mail fraud as an included as an included offense since most nations will not extradite for what the U.S. claims is "tax evasion.")

Swiss Bliss Missed

Broadened tax law extradition became an issue in 1996 when the U.S. and Switzerland revised their mutual tax treaty. Boastful "unnamed U.S. sources" at the IRS claimed the new treaty made it easier for the IRS to get information on which to base requests for extradition from the Swiss. The then Swiss government quickly echoed a ruling of the nation's highest court holding that unless "tax fraud" was shown as defined by Swiss tax laws, the Swiss would continue to deny information and extradition based on broader U.S. tax laws.

Ten days ago that 74-year-old rule changed when the Swiss government bowed to international pressures and announced it would renegotiate tax treaties to allow tax information exchange in individual cases.

Offshore Info

   
Can extradition for tax offenses be far behind?

I explain all about extradition and many other aspects of living offshore in my most popular book, The Passport Book, (The Complete Guide to Offshore Residency, Dual Citizenship & Second Passports), now in it's 6th edition. Find out about it here.

Your Papers, Please!

A visa is an official permission authorizing a person to enter the foreign country that issues the visa. A visa authorization may be a document, but usually it’s a stamp endorsed inside a person's official passport.

For many countries, the rule is -- no visa, no entry.

Some countries makes it difficult, if not impossible, for foreigners to enter, even for legitimate purposes. That accusation has been raised about the entry policies of the United States government that control who, when, and how foreigners may come to America.

Since the terrorist attacks of September 11, 2001, U.S. entry restrictions have become so severe, many say unreasonable, that hundreds of thousands of foreigners have been excluded or have just given up trying.

This has caused major economic loss, as business people refuse to suffer less than friendly treatment at U.S. airports and reroute their travel to avoid changing planes in American cities.

Thousands of foreign students have stopped applying for admission to American colleges and universities because of the time and red tape required to be admitted to the country, thus losing a chance to train a friendly needed group of future leaders whose knowledge of America will be limited.

Keeping Out the Unwanted?

It's a fact of international political life that citizens of certain countries, the U.S. among them, find travel abroad more difficult. For many reasons, some countries impose strict visa requirements on foreign nationals. It’s their way of keeping out supposed "undesirables."

In the wake of the 9-11 terror attacks, the United States greatly increased visa requirement for visitors from nations previously free to come to America without first obtaining a visa. Other nations have adopted similar post-9-11 visa restrictions where none existed before.

The U.S. already was one of the most restrictive countries in the world when it came to allowing visitors into the country, but the visa waiver program started in 1986 does allow the citizens of 27 selected countries to enter for stays of up to three months without a visa.

Official Red Tape

For American travelers headed overseas, getting a visa, when required, can be the worst part of the trip. It requires contacting a foreign embassy or consulate in the U.S. filling out forms, surrendering your passport for days or a week and paying a high fee, sometimes only with cash or a money order.

For a multi-country trip the time to get all the visas approved can take a month. It was that way decades ago, and even with the rise in global travel and online tools, that primitive system still exists today. When I visited China a few years ago it took me two weeks to get the visa, and I had to pay a visa expediting company to do it for me.

Visas Information Sources

Henley & Partners, a Zurich firm with which the Sovereign Society has worked for several years, specializes in international immigration, residence and citizenship law. On a continuing basis they analyze the visa regulations of almost all countries and territories in the world. They have just published their latest visa index and I think you may find it useful.

KLM Royal Dutch Airlines also has an excellent web site that allows you to cross check your home country with any other country in the world in order to determine if you need a visa for travel there.

The Passport Book

If you are interested in the possibility of dual citizenship, second passports and visa free travel, the 6th edition of The Passport Book which I authored is available.

In it I explain all about visas, plus how changing your country of residence, acquiring dual citizenship and a second passport can open up a world of opportunities. I show you how to obtain dual citizenship based on your ancestors, how to travel with greater safety, possible offshore tax savings and I may help you discover your own offshore paradise.

Click here for more about The Passport Book.

Carrying Several Passports? It’s Not Just for Spies

The New York Times traditionally has fancied itself as "the nation's newspaper of record," looking down its editorial nose at lesser journals.

But in recent times, the objectivity, relevance and indeed, the very existence of this leading left-slanted publication, ("All the news that fits we print"), has been called into serious question.

A few weeks back it was announced that The Times was mortgaging its New York City headquarters building to get $250 million it needed for operating capital. Only yesterday a Times business section article detailed a deal made with the reputed world's fourth richest man, multi-billionaire Mexico's Carlos Slim Helú, to put another $250 million into newspaper, making him the eventual largest stockholder. (When can we expect a daily edition in Spanish?)

All of which is my irreverent preface to that old adage that occasionally: "Even a blind pig can root up a truffle." With the price of truffles per pound exceeding that of gold, there's some value to the article The Times published yesterday about -- of all things -- the utility and increasing ubiquity of dual passports for Americans.

Increasingly Popular: Second Passports

Yes, I know -- since our founding over a decade ago, the Sovereign Society, (and yours truly), have been touting the attractiveness of dual citizenship and holding second (even third) passports.

Most of The Times article could have been lifted from my best-selling work, The Passport Book, to wit: "Dual passports are no longer the sole province of people who grew up in more than one country. Millions of American citizens potentially qualify for various reasons — ethnic heritage, religion, country of birth or where their spouse was born."

The article cited an Argentinean with an Italian passport who, last year, added an American one; a U.S.-Bulgarian who works in Warsaw and is thus able to roam the European Union without a visa; a dual U.S. -New Zealand citizen who travels frequently throughout Southeast Asia; even a dual Austrian-Turkish citizen who lives in Germany and avoids automatic suspicion when flying around the EU by not using his Turkish passport..

Added Safety in Dangerous Times

In The Passport Book, among the reasons I cite for a the need of second passport, one has risen to the top of the list -- personal safety.

I recount the tragic death of my constituent, (I was then a member of the U.S. House of Representatives), U.S. Navy Petty Officer Stethem, a victim of the 1985 terrorist hijacking over Greece of Trans World Airlines Flight 847, carrying 153 people as it flew from Athens to Rome. The young sailor was returning from an assignment in Nea Makri, Greece.

Over several days, the terrorists, later identified as Iranian Shiite Muslims based in Syria, forced the Boeing 727 to Beirut, then to Algiers, back to Beirut and again to Algiers. Groups of passengers were released during the initial stops.

The dozen terrorists threatened to blow up the airplane if anyone approached it on the tarmac. The terrorists systematically forced all passengers to show their passports, targeting U.S. and Israeli citizens for special, unwanted attention.

During a violent rampage, they beat Robert Stethem to death. Although in civilian clothes, Petty Officer Stethem was singled out from the passengers as a U.S. Navy sailor and American citizen, and killed when terrorist demands were not met.

It is hardly coincidental that, 23 years later, in the terrorist attacks last November in Mumbai, the terrorists specifically sought out American and British passport holders, releasing some tourists with other passports, then killing Yanks and Brits.

How About You?

"The fact is people don’t think about it until it is pointed out to them," The Times quotes Jan Dvorak, president of Travisa, a passport services company in Washington, D.C. Some Americans, he said, "don’t realize that they actually have dual nationality."

Under U.S. law, a second passport does not jeopardize American citizenship. However, U.S. citizens, including dual nationals, must by law use their U.S. passport to enter and leave the United States.

As I point out in The Passport Book, hundreds of thousands, perhaps millions, of U.S. citizens now also have automatic Mexican citizenship, either as former Mexico resident naturalized in the U.S., or as their descendants. Dual citizenship based on parents or grandparents also is available from Ireland, Italy, Poland, Lithuania, and with some qualifications, the United Kingdom, Spain and Israel.

Savvy Travelers

While there are no hard numbers, more Americans seem to be trying to qualify for additional passports. "Savvy travelers and business travelers want to make sure they have two passports based on nationality because there are certain advantages," Mr. Dvorak said.

Among those is the ability to work without restriction in various countries, particularly with passports from the 27 EU countries. Mr. Dvorak noted it’s "a way of hiding where one has been," when traveling among countries with soured relations.

The Passport Book

The 450 pages of the best-selling Passport Book include, among many other things, all you need to know about: 1) establishing a foreign residence; 2) obtaining a second passport; 3) facts and citizenship laws of nearly 100 countries, including what it means for Americans who are dual nationals. Click here for more information.

An End to "Your papers, please!"

One of my all time favorite movies is Casablanca (1942) in which a struggle to obtain visas for free transit out of that Nazi-occupied North African colony of French Morocco is a central theme.

In any 1940's Hollywood European war/intrigue/spy movie there's usually a scene in which national police board the train at the border to inspect passports. "Your papers, please," demands a stern faced police officer.

That has happened to me occasionally, as when I took the train from Prague to Budapest and Bucharest a few years back, or the express from Paris to Frankfurt. There was a moment's hesitation as the French, German, Czech, Hungarian or Romanian immigration officer came through the railway car checking passports. He took my passport, then glanced at me to make sure my face matched the picture. As the inspector thinks to himself: "Not another American tourist!," you think to yourself, "Am I in trouble?" (Usually not).

Passport Power

Until a century ago almost everywhere in the world passports generally were not required for international travel. Such documents were mainly used to insure passage by diplomatic emissaries sent to negotiate peace treaties or carry official papers.

But in more recent times governments use passports to control (and watch) the movements of their citizens. That official control was especially prevalent in Europe during the Cold War years, and it has returned with a bureaucratic vengeance, especially in the U.S. since the 9-11, 2001 terrorist attacks.

Borderless Europe

But now, at least in Europe, official border checks are largely a thing of the past, at least for the residents of 25 of the 27 nations of the European Union, plus non-EU member Switzerland, as of last month.

From December 12, 2008 Switzerland is part of the "Schengen Area," a zone covering 4,268,633 sq km (1,648,128 sq mi) offering unrestricted travel to 450 million Europeans. (The Schengen agreement also allows closer cooperation with the EU on cross-border police and asylum matters. The agreements were named after the small town of Schengen in Luxembourg where they were signed).

Switzerland Too

Switzerland's joining the Schengen Area, a 25-member European block, allows it to enjoy passport-free travel within and between these 25 member states. Switzerland is not an EU member, but it has several treaties with the EU. (Swiss voters have repeatedly, and wisely, rejected full Swiss EU membership, preferring their historic independence and neutrality).

Switzerland is not the first large non-EU country to join the passport-free zone. Norway and Iceland are also members, although as members of the European Economic Area (EEA) they are associate EU members. And two EU members, Britain and Ireland, by choice, are not members of the Schengen Area in an effort to control their immigration from outside.

Schengen = Freedom of Movement

The term "Schengen Agreement" describes two international treaties (1985, 1990) dealing with cross-border legal arrangements and the abolition of border controls that are now part of the EU code of laws. The main Schengen purpose is the abolition of physical barriers to cross border movement among European countries.

This borderless, Schengen free travel zone greatly enhances the usefulness of a passport issued by any EU member nation. That EU citizenship status allows the passport holder not only to travel, but to live, work, or establish a business in any of the EU nations, a major potential commercial and investor plus.

For non-EU residences, a common Schengen visa allows travel for tourism, business visits or temporary transit for employment. Non-EU citizens who hold standard EU residence permits from a Schengen state enjoy freedom of travel to other Schengen states for a period of up to 90 days.

You can learn all about dual citizenship and second passports, including those from EU countries, in one of my most popular books, The Passport Book, now in its sixth edition. Click here to learn more.

New Spanish Citizenship Law Offers EU Possibilities

The descendants of those exiled from Spain during the Spanish Civil War (1936-39) and during the subsequent rule of the late General Francisco Franco may claim Spanish citizenship under legislation that took effect last week.

The Spanish government expects half a million people, many of them living in Latin America, to be eligible for dual citizenship under the new measure, the Spanish newspaper El País reported. Those applying for citizenship must present proof of their parents’ or grandparents’ place and date of birth, according to the web site of the Spanish Justice Ministry.

The government plans to accept applications until December 2010. Those deemed eligible will not have to renounce their other national citizenship, a change from former Spanish law that forbid dual nationality

Dual Nationality

Dual nationality, a topic I frequently write about, simply means that a person legally is a citizen of two countries at the same time, qualified as such under each nation’s law.

Under American law this dual status may result automatically, as when a child born in a foreign country to a U.S. citizen becomes both a U.S. citizen and a citizen of the country where he or she is born. Or it may result from operation of law, as when a U.S. citizen acquires foreign citizenship by marriage to a spouse from another nation, or a foreign person naturalized as a U.S. citizen retains the citizenship of their country of birth.

Contrary to popular belief, Americans don't have to give up their U.S. citizenship or surrender their passport if they acquire a second citizenship. U.S. law and Supreme Court decisions support the right of an American to enjoy dual citizenship.

Historic Controversy

The new Spanish citizenship law covers the period from July 18, 1936, to Dec. 31, 1955, which includes the Spanish Civil War from 1936 to 1939 and the first decades of Franco's rule which ended with his death in 1975.

The act is part of the "law of historical memory," a controversial law passed last year by the Socialist government of Prime Minister José Luis Rodríguez Zapatero aimed at encouraging Spain to resolve issues from its bloody 20th-century history. Many Spaniards oppose the law as a needless stirring up of old animosities.

This new law could produce many applicants because Spain is a member of the European Union. That means acquiring Spanish citizenship allows a person to live, work and travel in any of the 27 EU nations, giving them a free run of the continent.

Tough Older Laws

The new law is a departure from much stricter Spanish naturalization law.

Prior to this exception citizenship by naturalization could only be acquired with difficulty. Persons with no ties to Spain had to reside in the country for at least 10 years.

Persons who were nationals of Portugal, the Philippines, or certain South American countries need only reside for two years, a back door approach to quicker citizenship.

Persons who were born in Spain, who married a citizen of Spain, or who were born outside of Spain of a mother or father who was originally Spanish, needed only to reside in Spain one year before being eligible fort citizenship. These laws remain in effect.

The new law also creates an exception to the existing Spanish prohibition against dual citizenship.

Spanish law requires most naturalization applicants to renounce their existing citizenship and to swear an oath of allegiance to Spain. Dual nationality is recognized only if the applicant’s home nation has a dual nationality treaty with Spain. Currently, such treaties exist with Chile, Peru, Paraguay, Nicaragua, Guatemala, Bolivia, Ecuador, Costa Rica, Honduras, the Dominican Republic, Argentina, Colombia, and Venezuela. Those of Spanish-Jewish descent were also allowed to hold dual nationality.

Other Nations Grant Exceptions

The changes in Spanish law adds a new political category to the exceptional qualifications for obtaining citizenship imposed by some other nations.

For example, one also can secure dual citizenship and a second passport based on ancestry if your parents or grandparents were born in nations such as Ireland, Italy, Poland, Lithuania or even the United Kingdom. Jews are allowed to obtain Israeli citizenship based on their religion.

If one can afford it, one can also secure an immediate second citizenship (at a high price) from the only two nations that still offer "economic citizenship" -- the Commonwealth of Dominica and St. Kitts and Nevis, both in the Caribbean area.

The Passport Book

If you want to know more about dual citizenship and second passports, you can read all about them and scores of countries in The Passport Book which I authored, now in its sixth edition. Click here to learn more.