Bank Secrecy, Anonymity & Confidentiality of Banking Operations

by Elliot Clark on January 2, 2009

One of the advantages of offshore banking is banking secrecy that comes with an account opened at offshore jurisdictions. This allows depositors keeping offshore company’s finances or making offshore investments under high degree of confidentiality.

Most tax havens are devoted to protecting client information from unauthorized disclosure. What does the bank secrecy mean? It means that no bank employee has a right to reveal information about customer’s account without a court’s order. Generally norms restricting access to the information is present in the legislation. Violation of this rule is subject to significant fines and even to the imprisonment.Offshore Banking and Bank Secrecy

Offshore banking centers tend to enforce laws restricting disclosing client information very strictly, since they are directly linked to the nature of the business they operate. One of the benefits that people seek while opening offshore account is bank secrecy and if it is not preserved accordingly, an offshore jurisdiction risks to lose its business due to heavy competition in this sector.

In many cases obtaining court order is also restricted. Offshore legislation often requires that the crime the court order that was obtained for was punishable by offshore financial center legislation. This greatly enhances banking secrecy, since in most cases disclosing client information is requested for the tax evasion that is not considered as crime in most of offshore jurisdictions.

Although strict banking secrecy policy reduces risk of client information leakage, still there is a possibility that such information is disclosed. This usually happens due to depositor that does not treat offshore account in a careful way: he/she may leave trace to offshore account by transferring money to it from onshore account or sometimes even letting everyone know that he/she went offshore. The best strategy to fully utilize benefits of offshore banking is keeping it secret from creditors, governments and even spouses.

Offshore banking jurisdictions with strict legislation towards bank secrecy are: Andorra, Lichtenstein, Panama and Switzerland.

{ 5 comments… read them below or add one }

Michael Barry September 22, 2010 at 9:41 pm

What about some of the swiss banks cooperating with the U.S. IRS

John October 16, 2010 at 11:32 am

Well then how does one get the money to an offshore account without it coming from an onshore accout?

John

Elliot Clark October 18, 2010 at 4:51 am

Good question 🙂 It does pass through onshore bank account.

If you are an expat working outside the country of your origin, then you may want to get your money not on the onshore account, but the offshore one, since offshore accounts are provided by international banks and have nothing to do with your country and its officials.

Also take a situation, when you work in Kyrgyzstan that is quite vulnerable and politically unstable place nowadays. You’d never want to keep cash in a local bank. This is where the offshore bank account can help a lot.

Riccardo January 16, 2011 at 7:30 am

Swiss banks have caved in to pressure form foreign governamental institutions going after their nationals off-shore accounts. Several examples are available on the internet that show Switzerland is no longer what it used to be regarding “Banking Secrecy”.

Panama and Singapore are quite a different story regarding that matter. I suggest you make a little research along those lines to realize that Panama and Singapore, particularly the latter, are secrecy-wise, second to none.

michael frack huffman July 4, 2013 at 2:02 am

i forgot where all my assetts are. we keep on creating but the fbi cartel keeps on sabotaging. do i have any assetts over there? anywhere on earth? i’ll give you a cut if you find something.

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