By now, Offshore Safe Deposit Boxes readers have probably heard of the so-called ‘Panama Papers’. From The Wall Street Journal website Monday afternoon:
A document leak known as the “Panama Papers” on Sunday pulled back the curtain on the secret financial dealings of the world’s rich, powerful and, in some cases, allegedly corrupt.
The papers were leaked to Germany’s Süddeutsche Zeitung and combed through in cooperation with the International Consortium of Investigative Journalists (ICIJ) and other publications. They purport to document the dealings of the Mossack Fonseca law firm, which appears to have helped wealthy clients establish shell companies in Panama, a rare remaining bastion of bank secrecy…
And from Luke Harding over on The Guardian (UK) website this morning:
The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens…
To their credit, the British paper did point out the following:
Using offshore structures is entirely legal. There are many legitimate reasons for doing so. Business people in countries such as Russia and Ukraine typically put their assets offshore to defend them from “raids” by criminals, and to get around hard currency restrictions. Others use offshore for reasons of inheritance and estate planning…
(Editor’s note: Bold added for emphasis)
As a result of the “Panama Papers,” I suspect the idea of offshore asset protection could get more of a “bum rap” on Main Street than it already does.
For a number of Americans, the mere mention of the word “offshore” already causes them to jump to the conclusion that some sort of criminal activity must be involved there.
But once again, as Ted Bauman pointed out in a piece Monday on The Sovereign Investor Daily website, as it concerns offshore asset protection:
It’s not illegal. There are plenty of reasons to open a bank account or a corporate structure, like a limited liability company (LLC), in an offshore jurisdiction, especially if you are in a lawsuit-prone profession like medicine. One of the valid reasons for operating offshore is IF YOU JUST FEEL LIKE IT. It’s your right as a human being…
(Editor’s note: Bold added for emphasis)
Even though offshore corporate structures, offshore banking, and the like aren’t exactly my forte and not really areas this blog and sister site Offshore Private Vaults focus on, I feel I too should emphasize “offshore” doesn’t necessarily mean “criminal.”
The secured storage of legally-obtained and owned assets in bank and private, non-bank safe deposit boxes located outside the United States is perfectly within the law. And as regular readers of this blog know, Americans do it for a variety of reasons, including:
• Securing and having convenient access to valuables while residing, studying, travelling, and working overseas
• Geographically-diversifying wealth per the advice of financial/investment advisers
• “Prepping” for potential nationwide emergencies/disasters, where domestic access to privately-owned assets becomes impossible
• Protecting assets should “Uncle Sam” ever go rogue and join the growing wealth confiscation movement across the globe
While both the blog and website are aimed at the law-abiding, I still go so far as to communicate the following to visitors:
“Offshore Safe Deposit Boxes strongly condemns any attempted use of these overseas storage containers for illegal purposes.”
“Offshore Private Vaults strongly condemns any attempted use of these private vaulting facilities and their safe deposit boxes/lockers for illegal purposes.”
As it concerns U.S. government reporting requirements, just last week I blogged:
If “Uncle Sam” requires precious metals in an offshore bank safe deposit box to be reported, then by all means, you should do it.
And should taxes be involved, the way I see it, it’s like The Good Book says:
Render unto Caesar the things that are Caesar’s…
In conclusion, who knows how far the fallout from the “Panama Papers” will extend. But it would be a real shame if offshore asset protection , and in particular the tool of the offshore safe deposit box, gets thrown under the bus from this event despite it being beneficial and legal for Americans to pursue.
By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)
(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)
“The Panama Papers in Perspective.” The Wall Street Journal. 4 Apr. 2016. (http://www.wsj.com/articles/the-panama-papers-in-perspective-1459810493). 5 Apr. 2016.
Harding, Luke. “What are the Panama Papers? A guide to history’s biggest data leak.” The Guardian. 5 Apr. 2016. (http://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers). 5 Apr. 2016.
Bauman, Ted. “Panama Papers: The Threat to Your Offshore Assets.” The Sovereign Investor Daily. 4 Apr. 2016. (http://thesovereigninvestor.com/offshore-living/panama-papers-the-threat-to-your-offshore-assets/). 5 Apr. 2016.