Insights from one of my European bankers

by | Aug 31, 2000 | Archives

…on the new Overseas reporting laws to the IRS…

Here is more data about the new reporting requirements

From January 1st, 2001 – European Banks are reporting to the I.R.S. the following:

  1. US securities in Safe Custody with European Banks on behalf of:
    1. US residents
    2. US citizens residents ourside the US

We will have to report the volume of the items in Safe Custody + annual dividends or interests. If US securities are sold after the 1. January we also have to report to the I.R.S.

The Banking Secrecy is still 100% for accounts etc. as these are not yet involved in the agreement with The States. Also IBC`s and Trusts domiciled outside the States are not involved at all.

And it is only towards the I.R.S. so against any other 3rd. party we still have no obligations at all.

Most Swiss Banks have recommended their clients to sell out all US secutities as they will not report at all.

But remember that we are talking about 50% of the world market. The US are reporting Europeans having US securities within the US, so there is no escape. “Money On The Run Will Never Come Back Home” but where do they go ? Singapore/Hongkong og Malta. Or to a Banana Republic where the funds might be frozen or even nationalized.

The risks increase in this complex matter. this does not mean you should not use overseas banks or structures. In fact this increases the need for them. You should however use them with more care, diligence and always with the help of an experienced professional.

Good investing!