Why Criminals Use Offshore Banks
. At least that is how it is done in the movies, right? In reality, there are many completely legit reasons why one would use an offshore bank account to hold their funds.
The attraction of offshore banking centers is that they are less regulated by their governing bodies than most standard banks. Offshore finance is one of the few industries, along with tourism, in which geographically remote island nations can compete with larger nations with more resources. These small nations tend to have less banking regulations than countries like the US.
They offer higher interest rates and they do not tax the interest earned on your money. Other than the advantages of low taxes and high rates, many legit customers of offshore banks use them because they may be more stable than their own country. People that live in countries where their funds may be frozen if there is civil war or a national crisis will use an offshore bank to hold their funds.
Offshore banks are used frequently for illegal purposes. The
offshore bank Bahamas is used, for example, as a form of tax evasion by organized crime because they do not tax the interest earned on the deposits. These people using the
offshore bank Bahamas are supposed to report the interest earned to their own government, but do not because the money deposited may be earned illegally. It is also very difficult for a government to gain access to an offshore bank accounts transactions due privacy laws.
The
offshore bank formation is for perfectly legit purposes. Experts say that half of the worlds capital runs through offshore centers every year. However, due to low government regulations in many of these small nations who need the offshore banking business, it is easy for criminals to use their offshore banks to their advantage.
by: Cameron Scott
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