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Offshore Banking |
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Offshore
Bank Account Opening Procedures & Maintenance
All the offshore and international banks we work with regard the prevention
of money laundering and terrorist financing to be of the utmost importance,
so do we.
OCRA Worldwide does not seek to work with offshore banks which have
low standards of compliance as, apart from our own desire to only
work with reputable partners, the culture and business ethos of such
offshore banks must not be flawed.
Consequently the offshore and international banks we work with will
seek to:
- obtain evidence of our clients' identities,
- develop a documented understanding of our client's banking and
business activities,
- identify the source of funds paid into accounts to ensure that
such funds are not derived from criminal activity and to document
evidence relating to source of funds.
- monitor banking transactions to identify and forestall money
laundering,
- risk assess each and every client.
This means that offshore
account opening procedures can be onerous and time consuming.
Typically offshore banks will require some or all of the following
information to open and operate an offshore account for a simple offshore
company which is owned by individuals (rather than a corporation,
trust or other form of entity):
- Certified proof of identity of owners, directors, account signatories
and all parties connected with the offshore company. Acceptable
proof of identity would normally include a passport copy certified
in a prescribed manner by an officer of the bank, a notary or
an authorised OCRA Worldwide Manager.
- Proof of residence of all parties associated with the offshore
company. Acceptable proof of residence would typically include
an original bank statement or credit card statement.
- The provision of a curriculum vitae.
- The provision of bank or professional references.
- Information relating to the expected annual income or asset
base of the offshore company, the number of transactions per month,
the geographic spread of the proposed business and the amount
of money that will be left on deposit at the bank.
- A detailed description of the proposed business activity, often
supported by documentation such as brochures, copies of contracts,
audited accounts, business plans and details of trading partners
or investments.
- Documented evidence relating to source of funds, e.g. if a million
dollars is to be paid into an offshore company's account, the
bank will seek to obtain documentary evidence relating to the
source of such funds in the form of a bank statement, contract
or similar.
- An initial meeting with potential bankers possibly with an OCRA
Worldwide Manager. Some banks require clients to visit them on
an annual basis.
- In addition, enhanced due diligence will be undertaken if the
affairs of the offshore company are complex or if it, or any party
connected to it, is associated with what banks or regulators perceive
to be high-risk. For example, stringent enhanced due diligence
is typically applied to business emanating from countries which
were former members of COMECON, counties classified as "non co-operative"
by the Financial Action Task Force, or countries associated with
the production and distribution of illegal drugs or infamous for
corruption.
Offshore Bank Account Maintenance
Once an offshore account is opened it is important to keep the offshore
bank briefed and current with the affairs of a client company or trust.
Banks do not react well to unexplained account activity, so if a company's
trading pattern is set to change or a large or unusual transaction
is about to occur it always wise to pre-warn the bank and provide
documentation such that the bank can understand and maintain evidence
of the wholesomeness and reason for the proposed transaction.
Maintaining an efficient relationship with a bank is a two-way process.
Why OCRA Worldwide controls its client company and
trust bank accounts
When OCRA Worldwide provides Directors, Managers and officers to a client company or when OCRA Worldwide provides trustee
services, its officers must control any underlying bank accounts.
Why?
- There are various legislative and regulatory requirements and
precedents relating to the duties of directors and trustees relating
to their obligations to exercise effective management and control
over a company's or trust's assets and affairs. Put more simply,
would any reasonable businessperson, aware of the duties and liabilities
of directors or trustees, be prepared to act as a director of
a company or act as a trustee, if they did not control the company's
or trust's bank account?
- If our clients were to exercise control over bank accounts it
could be perceived that they are controlling the affairs of the
company or trust even though they may not be officers or trustees.
Statutory authorities in high tax and other areas often seek to
apply "the management and control test" to assess whether the
profits/income earned by an entity controlled in a low tax area
should be taxed as if they were resident in the high tax area.
There is an inherent possibility that if we allowed clients to
control bank accounts, then a regulatory authority may deem that
our clients are effectively managing and controlling the company
or trust in their countries of residence or more radically may
seek to pierce the corporate veil or judge a trust to be a "sham".
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