Wednesday, March 4, 2015


If you read this week's Transparency International report on the widespread use of non-transparent corporations to hide beneficial ownership of a large portion of expensive London real estate, you saw that over 1/3 of the corporate entities employed for that express purpose were formed in the British Virgin Islands. Considering that tax cheats, corrupt PEPs, drug kingpins, and sundry other sordid types use BVI companies as a matter of course, you may want to prohibit their use by your bank clients altogether, as account owners. While this may sound extreme, it is sound management; You do not want to play Russian roulette with risk.

In truth and in fact, the use of a company from a notoriously opaque corporate jurisdiction increases risk for your bank, whether it be merely tax evasion, or serious criminal or terrorist activities. I believe that it is now time to decline any new account, wherein the client, or his professional front-man, chooses to have it in the name of a BVI company. Give your client the names of acceptable corporate jurisdictions, so that, if he really has a bona fine need for a company from an offshore tax haven, he can still find one that you can live with, and you can keep his business.

Kindly stand your ground with this policy; and any client who refuses to switch to an acceptable jurisdiction is not worth having anyway, in a risk-based environment. You can do without a corrupt Chinese general, a Venezuelan drug kingpin, or a billionaire PEP who never had even a six-figure salary; many of them are known to use BVI companies to hide their illicit wealth.


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