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Our November 10, 2005 Newsletter:
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US based interest rates are headed up, up, up.  Panama versus the Dominican Republic for Residency and Citizenship?   Offshore Banking plus more. . .
John Schroder - Author of The Ascot Advisory News Letter Bulletin and Numerous Expatriate  Articles
IN THE NEWS:
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RATE INCREASES LIKELY TO GO ON - November 2, 2005
By Susan Tomplor, Detroit Free Press
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So just when will the Fed say enough is enough?  On Tuesday, the Federal Reserve raised rates for the 12th time in 12 meetings. Short-term rates went up, as widely expected, by a quarter-point to 4%. The Fed action drove banks to push up the prime rate, which influences many consumer loans, to 7%.  Debt-stretched consumers will dish out even more money for interest payments for variable-rate credit cards, home equity lines of credit and other consumer loans.  Take a home equity line of credit. Thanks to all those rate increases, a consumer would pay $175 a month -- instead of $100 a month -- to cover the interest alone on a $30,000 home equity line of credit. That higher payment takes into account a prime rate of 7%.
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I see there's definitely inflation out there," said Roland Bargende, 72, a retiree from DaimlerChrysler who lives in Plymouth.  Take his favorite grapefruit juice. A year ago, Ruby Red Grapefruit Juice was 99 cents for a 64-ounce bottle. Now, he's paying $1.99.  If it ever goes on sale, it's like $1.49, he said.  And gas prices?  I haven't even adjusted to $2 a gallon yet -- and it's over that.  The way he sees it, Bargende says retailers and others are passing along to consumers the higher costs of fuel for shipping goods. So he expects the Fed to keep pushing up rates to control inflation.
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http://www.freep.com/money/business/tompor2e_20051102.htm
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EDITORS NOTES:  I hate to say I told you so, and with Ben - lets print until we run out of green ink - Bernanke at the helm, it should be interesting.  Sort of like those prescription medications they tout on television, meant to cure one problem, but with some side effects you would rather not have (nausea, dry mouth, increased risk of cancer, dementia, etc.).  Stated another way, it seems the beltway boys have made up their minds already how to handle things: no new taxes, no reduction in government spending, no cuts in social security benefits to the baby boomers (at least they have not said so yet) - just print money like there is no tomorrow.  Of course, you get an unpleasant side effect known as inflation out of that, and then in turn, you have to raise interest rates because all the foreigners loaning you money would stop doing so if you did not compensate them for the devaluation of your currency (not to mention to prevent things from getting too much out of hand domestically either in terms of the inflation rates, and higher interest is in theory the cure for that).  Anyone with bonds or bank certificates of deposit should be happy knowing that interest rates for these things will be going back up.  Also, as interest rates go up in the US, this will put some pressure for higher bank account interest rates in Panama, the Dominican Republic (and other countries) in terms of US Dollar Accounts going forward.  On the other hand, anyone with credit card debt and interest only or adjustable rate mortgages in the US are in for a very bumpy ride.  However, the other side effect of higher US interest rates might be the strengthening of the US Dollars versus other currencies, and we have seen this take place to some extent already.  Of course, if interest rates do not rise high enough to compensate for the inflation (over printing) of the money supply then eventually this higher value will be short lived.    
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READERS WRITE IN:
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Dear John - As I have written you at an earlier date, I have another question. I have legal residency in panama. Panama is being sold on the Internet as a great place to get a second passport and citizenship. Instead of opting for the Retirement-Residency Program, which does not ever qualify one for citizenship, I opted for the personal solvency residency application, which involves putting $200,000 in a Panamanian Bank at relatively low interest for two years.  Now after almost two years I discover that the Panamanian constitution in Title II Article 10 expressly forbids dual nationality for immigrants to Panama who are not from Spain or a Latin American country. This means that Americans like myself who are investing in panama apparently will always be there on residency permits only  It is true that Panama has excellent laws that permit dual nationality and that allow Panamanian Citizens to hold several citizenships. HOWEVER, according to Title II Article 13 these multinational benefits are expressly denied to anyone who obtains Panamanian Citizenship through naturalization.  My attorney who did my residency papers has not given me a response now after 10 business days and I am starting to think that other local attorneys simply do not know or have never read the constitution of their country.
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You have mentioned before that you have clients with residency in Panama who had come to you for residency and naturalization in the Dominican Republic. Do you know if these clients where successful in Panama? I know lots of dual national Panamanians, but I do not know any North Americans who are dual national and who naturalized. I believe that the dual nationality issue is important enough to change my residency to another country even at this late date. This year I was forced to gave up a trip with Chilean friends who wanted me to take a bus trip with them to Paraguay and Brazil because I have a passport from the wrong country, (I have a U.S. passport).  If you have a comment on this or personal experience I would appreciate it. Or maybe a reader has personal experience and would be so kind to write, and you could forward his comments.
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EDITORS REPLY:  Thank you for the letter and you bring up some very interesting questions.  First and foremost, it must be understood that unless a country has an instant or economic citizenship program, it is the case of going through the normal channels and process for residency application, and after that, waiting whatever the time table might be to apply for citizenship (naturalization).  Some countries, such as the US, require that new residents (green card holders) wait seven years (after maintaining residency status) until they can apply for citizenship.  In other countries, such as Panama, the wait in five years - and in other countries the wait might be 10 years, or it might be less than all of the above.  In terms of the Dominican Republic, the wait is much quicker (about two years), which makes the entire process certainly much more attractive in terms of time line or waiting process.
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Also, just as a side comment about instant citizenship or economic citizenship programs, there were a very small handful of countries that offered this in the past, for fees ranging from US$40,000 up to US$100,000 or more.  However, many of these countries have done away with this due to pressures mainly from the United States, so in terms of the vast majority of nations in the world, it is the case of applying for residency and then after that applying for naturalization (citizenship).  Now, there are some cases, in some countries, whereby citizenship might even be impossible or very difficult regardless.  The Turks and Caicos certainly would fall into this category, whereby you can apply for residency, but it is almost impossible to gain citizenship unless you were born there (or are somehow related to someone that was born there or has what it called, BELONGER status).  Not only that, the residency requirements in the Turks and Caicos are ridiculous, in the regard that one must purchase local real estate valued at US$300,000 (or whatever the current amount might be if changed) in order to qualify to apply for residency.  And then with that said, it was the case not too long ago that the government in the Turks and Caicos decided simply to NOT renew the residency status of many foreigners, forcing them of course to leave and abandon their homes, etc.
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So, this brings us to another very important point of understanding in terms of residency versus citizenship.  Residency is the legal permission or right from the local government to live and possibly work inside a particular country, but in theory it can be revoked even though this is very, very rarely the case (unless the person committed a crime or what have you - and the Turks & Caicos scenario is the exception rather than the rule as most countries would not arbitrarily do something to chase all these new well-heeled foreigners away).  Citizenship on the other hand is sort of a permanent status (for lack of a better way to explain it), and once you become a citizen, then that is the final part of the journey (and no more annual renewals of your residency permit accordingly).
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In any event, when choosing a place to live or reside, one of the considerations might be the residency requirement in a particular country (and if you think it fair or not, and if you can qualify or not).  Of course, then again, there might be the case whereby you CAN afford it or be in a position to qualify, but think the requirements to be ridiculous anyway.  In the case of the Turks and Ciacos, personally I would not even bother to make that kind of investment in real estate knowing I could never eventually get citizenship and that the government is of the mindset to revoke residency permits to foreigners at a moments notice because all of a sudden the locals want to blame foreigners for whatever economic problems they might be having (not to mention the fact that the real estate is way overpriced in comparison to other Caribbean Islands).  The Turks and Caicos is an OK place, but it is not Gods gift to mankind in terms of a place to live, but if the local people living there think so, then good for them.  There are some other very beautiful places in the Caribbean to consider, with much less restrictive requirements and much lower priced real estate as well.
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This of course brings us to discuss some of the things you mentioned regarding Panama, and many other countries in general.  Which is to say, every country in one way, or another is in competition with each other to lure high quality immigrants.  In terms of well-heeled foreign retirees with a pension, some governments have put programs in place to lure these kinds of persons, and for good reason.  These groups of people are in theory and practice retired, which means they are not going to be taking jobs away from the locals.  They have an independent source of income, either from a pension or investments and therefore can support themselves.  Plus they help the local economy by spending money for goods and services.  So, it can be a win-win situation for everyone.  Costa Rica was one of the first Central American countries to recognize this and they put a special immigration incentive in place many years ago for foreign retirees.  Panama, after watching the success of Costa Rica of course put something similar in place as well.  The only problem with this whole thing is that a country can actually become a victim of its own success.  Costa Rica was overrun with American retirees especially and both real estate prices and cost of living in general shot through the roof.  Which is to say, Costa Rica was dirt-cheap about 15 to 20 years ago, but not anymore.  In fact, we have quite a number of clients that were previously living in Costa Rica that have decided to relocate to the Dominican Republic for this very reason.  I would say to some extent, the same could be the case for Panama as well going forward, but we will have to wait and see (although a few Panamanians have commented that real estate in Bocas Del Toro has gone through the roof with the flood of Americans running in there).
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Panama does have a number of different ways to apply for or qualify for residency (and likewise different residency status applications as well).  One of the ways to qualify used to be the case that you could deposit US$100,000 into a local Panamanian Bank, and with that fact alone, qualify for residency.  What has happened is, with all the recent publicity and retirement tours, etc. promoting Panama - Americans especially have been flooding into the place, almost to a point of invasion in areas such as Bocas Del Toro, etc.  I tend to think, after seeing this, the Panamanian Government thought they had the last bottle of Coca-Cola on the planet and decided to up the ante, or raise the requirements.  After all, if everyone is just dying to move into Panama, why not raise the prices and requirement if the market will pay it?  So, where as the magic number was US$100,000 about three years ago - today (as you mentioned) the number for economic solvency is now US$200,000.  Of course this does not affect retirees, and for those people over the age of 55 with a fixed documented pension of US$500 or more per month, Panama is probably still a good deal (requirement wise for residency).  On the other hand, if you are 41 years old and cannot qualify for the Pension Program, then you have to make a decision if it is worth it to you (or not) to tie up US$200,000 simply to live there.  In addition, just as you mentioned, this can have a detrimental effect if interest rates go down.  About 5 or 6 years ago Panamanian Bank certificates of deposit were paying about 8 percent tax-free.  Today they are paying about 3 percent.  If you had intended to live off the bank interest, the difference is of course US$800 per month less in bank account interest income.
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Now, with all of that said, I have lived in Panama, I still like Panama and I still think Panama to be one of many excellent choices for banking, incorporations, retirement or relocation.  However, on the same token, there are some other places much less restrictive and much quicker in terms of the residency and eventual naturalization process as well - namely the Dominican Republic.  In fact, because of the longer wait and frustration with the process in Panama, I do have clients that have decided to go through the residency and naturalization process in the Dominican Republic accordingly.  In fact, I have quite a few clients in Honduras, Costa Rica and even Guatemala that have done the same thing (many splitting their time between the two countries and even owning real estate in both as well, NOT because real estate ownership is required in the DR for residency, but rather because of the cheaper prices).
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To answer your specific question - most countries in the world do permit dual nationality or dual citizenship (the Dominican Republic does permit it).  There are some exceptions or countries that do not, such as Germany, Holland and Ecuador.  But, even with that said, in the case of Germany and Holland, there has been some impetus to change this recently.  In the case of losing ones previous citizenship, there are really only two ways this can happen.  One, if you formally renounce via whatever paperwork or processes might exist to do so or two, if the former country revokes your citizenship.  However, I do know of quite a few people that hold both a US and Panamanian Citizenship - and hold both passports.  In fact, some clients hold more than two, and actually maintain three or four nationalities (and of course passports as well).  This is perfectly legal providing of course each nation involved does indeed recognize dual citizenship (which the vast majority of nations on the planet do).
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The only requirement for US citizens with dual nationality is that the US Passport always be used when entering and leaving the US.  Other than that, it has never seemed to be an issue, and I have never heard of any case whereby the Panamanian Government has asked a newly nationalized citizen to turn in the passport of previous citizenship either.  Even if they did, in theory, one could simply go down to the US consulate and ask for another one (only the US State Department can take away your citizenship from you and not another foreign government, and vice versa for that matter). 
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With that said, ironically enough, I have many clients that WANT to renounce US citizenship and have been given the run around every time they have tried to do so.  It is as if the people at the US consulates want to make the process as difficult as possible (and in two cases, officials attempted to talk two clients - at two different consulates in two different countries - out of it before giving them the paperwork).  So, I would say, the fear should not be losing US citizenship, but rather being able to should you wish.  Remember, the US is one of few countries in the world that attempts to tax its own citizens no matter where they are living or earning income, so no matter where you are, for them you are a tax paying cash cow - and they would prefer not to loose you (or better said not you exactly, as they could really care less about you as a person, but rather they want your money).
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To sum this up, someone interested in relocating to another country should of course consider and investigate the residency applicant requirements as one of the items on the checklist.  The Dominican Republic certainly does offer a process that is much quicker and much less restrictive in terms of requirements (the equivalent of less than US$20,000 for economic solvency versus US$200,000 for Panama - when NOT applying as a retiree).  You may like Panama, but do you like it 10 times as much as perhaps the Dominican Republic, or someplace else?  This is really the question in terms of the residency process.  
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Residency is the first part of the immigration process in ALL countries, and later on at some point can you apply for naturalization or citizenship.  However, one can in theory and in practice stay with residency status indefinitely (and keep renewing it at whatever time periods are required), as you are NOT required or forced to become a citizen if you do not want to.  Also, residency alone does automatically convert itself or become the naturalization process on its own.  You must request to become a naturalized citizen.  Applying for naturalization (citizenship) is voluntary, just as applying for residency is also voluntary.  Which is to say, you can live anywhere in the world that you wish, in what ever place offers you the best deal or the best circumstances.  Sometimes, governments do have the tendency to forget this and often try to take advantage accordingly, but hopefully they will realize you have come on your own free will, and can leave on your own free will if things are not to your liking (if the government starts raising the requirements, starts changing the tax code to begin taxing your pension income or whatever else).  Also, just as one other very important point: Most countries would NOT notify the previous country of citizenship regarding the fact that a person has applied for either residency or citizenship.  The US State Department (and almost all other governments as well) have NO IDEA which of its citizens have obtained legal residency or even dual citizenship elsewhere simply because this is not normally reported.  The only way they would know in most cases if you told them (if you declared this on a tax-return or otherwise for reasons of claiming non-residency for tax benefits, in the case of Canada or most European nations as an example). 
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ANOTHER READER WRITES:
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Freedom Lost and government oppression:  Recently we had a devastating hurricane in Florida, and to make matters worse the government took freedom from us.  Let me explain.  After the hurricane we found ourselves without electric power and gasoline.  If that was not bad enough, my wife and I were going stir crazy in a dark house so we decided to take a walk at 7:30 PM just to get a brake from the depressing situation, but as we walked less than two blocks from home the police stopped us and told us to get home or they would arrest us as a curfew was in effect.  Can you imagine such oppression?  First we are not children or teenagers, but individuals over 50 years of age and should have a human right to walk peacefully within two blocks of our house.  However, in West Palm Beach you no longer have the right to take an evening walk after 7:00 PM; whereas, I learned even those in Havana, Cuba enjoy this right.  Why should mature individuals in the so-called land of freedom not have this basic human right? 
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EDITORS REPLY:  Thank you for your letter.  It is very interesting that according to some news stories from the Palm-Beach-Post Newspaper on November 2 that this curfew was finally extended from 9:00PM to Midnight, however this still means that in the land of the free there is still a curfew.  Also, Florida Power and Light claims that some nine days after the storm some 20 percent of customers still remain without electricity, and specifically in Palm Beach County, about 144,000 homes still had no service.  It makes you wonder really.  The power goes out every day in many parts of the Dominican Republic, both night and day.  Most middle class people of course have battery inverter systems, which means in effect that they do have power 24 hours in their homes regardless.  Some have gone to now installing solar panel systems as well.  However, the vast majority of poor people do not have these things, yet there is no rioting, no mass hysteria and no curfews.  The power goes out in the US and there is martial law.  Why?  Are the poor people in a so-called emerging market less prone to crime, or more law abiding than Americans living in a middle class neighborhood?  Many of my clients have made the comment that the US has started to look more and more like the third world, and the third world more and more like what the US used to be like forty years ago.  While such a comment may seem to be eccentric or a bit to the extreme, the sad thing is, there may be some truth to it.
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ANOTHER READER WRITES:
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Hi John - I am a regular reader of your newsletter and enjoy it tremendously, including the reader comments. Here's a question regarding so-called offshore banking:  As I understand, banks in other countries, which offer dollar accounts to foreigners, have a correspondent account with a U.S. bank. The purpose of this account is to facilitate transfers of funds from the U.S. to banks in other countries. So when Joe Wannabee Expatriate wires some funds from the U.S. to his bank account in the Dominican Republic, for example, the money is first deposited in the D.R. bank's (correspondent) account in the U.S. This account is called an inter-bank account.  This confused me until I thought of the individual D.R. bank as a person (or entity), with an account in Miami or wherever.  So, Joe's money is wired from his personal account in, say, Akron, Ohio to an international U.S. bank in, say, Miami or New York. The money is deposited in the D.R. bank's correspondent account. Then the funds are "wired" overseas to Joe's bank account in the Dominican Republic.  What is written above is not the question. It is my partial understanding of the process of wiring money offshore. Here is my question: Is Joe's money safe from seizure by U.S. officials operating under the Patriot Act? I'm asking if Joe's money is safe in the offshore account. Here is why I am asking: I researched the Patriot Act (H.R. 3162). Here is the link: http://thomas.loc.gov/cgi-bin/query/F?c107:4:./temp/~c107hOlQcS:e132111:
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Section 319 under Title III reads:
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SEC. 319. FORFEITURE OF FUNDS IN UNITED STATES INTERBANK ACCOUNTS.
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(a) FORFEITURE FROM UNITED STATES INTERBANK ACCOUNT- For the purpose of a forfeiture under this section or under the Controlled Substances Act (21 U.S.C. 801 et seq.), if funds are deposited into an account at a foreign bank, and that foreign bank has an inter-bank account in the United States with a covered financial institution (as defined in section 5318(j)(1) of title 31), the funds shall be deemed to have been deposited into the inter-bank account in the United States, and any restraining order, seizure warrant, or arrest warrant in rem regarding the funds may be served on the covered financial institution, and funds in the inter-bank account, up to the value of the funds deposited into the account at the foreign bank, may be restrained, seized, or arrested."
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Simply put, if I understand correctly, monies deposited in an account in a foreign bank can be seized in the U.S. Of course, Uncle Sam would first have to accuse the account holder of criminal activity--drug smuggling or bulk currency smuggling of amounts over $10,000 or "terrorism" or being an "enemy combatant", or whatever. But the Patriot Act makes every person living in the U.S. a potential criminal.  So again my question is: Is a person's offshore nest egg secure from forfeiture by zealous U.S. terrorcrats? Of course we are talking about lawfully earned, after tax money here. Or is it necessary for the funds to be kept in a foreign, non-U.S. currency?
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EDITORS REPLY:  This is an excellent and interesting question.  First off, I have to admit the term inter-bank account is a new term for me, or at least not one used internally that much within the US banking community.  In the banking and brokerage industry inside the US, the term used is Correspondent Account.  In addition, in terms of the foreign banks relationship to the US bank or vice-versa one would say that the US bank is the foreign banks correspondent bank, and the foreign bank is a correspondent bank customer or client accordingly.  Anyway, just semantics I suppose.
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However, you bring up a very interesting point about the true nature of how such an account works, in practice and politically also.  You are correct in that anytime you wire US Dollars from a US Bank to a non-US bank, the truth is that the funds never really leave the US.  They are simply re-titled or we can say, simply deposited into the foreign banks US Dollar Bank account with the US correspondent bank (Citibank, Chase, Wachovia, etc.).  What happens in reality is, that you funds are commingled into one account, along with perhaps hundreds or thousands of funds belonging to other clients as well in that one US correspondent banking account (titled or owned by the foreign bank).  The foreign bank of course has an internal book keeping system, crediting your funds directly to your US Dollar account with the foreign bank, but the actual account in the US holding the funds is what can be called an omnibus account (one account with all funds lumped together).
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So, if it were the case that someone (or some entity) wanted to freeze or confiscate that account, while they might be successful in incarcerating Joe Wanabees ten thousand, at the same time, they will be freezing US$100,000 belonging to perhaps the Prime Minister of the country, and US$50,000 belonging to another citizen of that foreign country, and so on.  How angry do you think the politicians and businessmen of a particular country are going to be when their local foreign bank informs them they cannot have their money because the correspondent account in the US containing their money also has been nabbed?  This is not to say that it cannot happen.  This very event did happen regarding one of the banks in Nevis.  What did the bank do?  They told the US to have a nice day, and simply established a number of new correspondent accounts in Europe.  If fact, the joke is, they might even be transferring money with the very same bank they were using before, and the US bank does not even know it because the new account is owned by another bank in Europe (acting as a surrogate for the bank in Nevis).  Also, most foreign banks often maintain a number of correspondent accounts both in and out of the US as general practice.  Plus, they often sweep the account periodically, or better said, they withdraw the funds so there is not too much money sitting in any one place at any one moment.
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Also, it is very important to understand that the above scenario (in terms of US Dollar transfers done inside the US) only pertains to money movements done through the US Federal Reserve Bank system.  Which is to say, foreign banks are not permitted membership in the US Federal Reserve Banking system, so by default they must utilize a banking relationship (correspondent) with a US bank if they wish to make transfers via this system.  However, that is not the only game in town.  The Europeans, in order to not be held hostage to the US Federal Reserve set up another competing system known as SWIFT.  This SWIFT system is a European System - and it allows any bank that is a member of this other system to also transfer US Dollars, Euros or any other currency as well.  So, the money goes through Europe in theory and not the US.  Most larger money center banks in the US are members of the both the US Federal Reserve and the SWIFT system.  However, smaller US banks are usually not.  So, if you ask your local Savings and Loan to transfer money via SWIFT they probably will not know what you are talking about, as they are only used to utilizing the US Fed System (and are probably ONLY members of the US Fed System as well).  You can tell the difference in terms of instructions, because the US Fed System requires what is known as an ABA number.  This is actually the banks account number at the Federal Reserve.  If a bank is a member of Swift, then they will ask for what is known as a SWIFT sort code, which is a group of letters rather than a nine digit number as is used in the Federal Reserve System (the ABA account number is nine digits, the SWIFT code is normally five or six letters).
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Now, you might want to ask, why should I care?  Well, the truth is, under current conditions in the US, you could be accused of actually laundering your own legally earned and legally taxed money.  Also, some banks in Canada recently have refused to complete money transfers if the requestor of the transfer does not provide a tax ID number of the recipient.  Let us suppose you want to wire funds to a real estate broker in Argentina because you are buying a house, or to anyone else for any other reason for that matter.  Why in the world would an Argentine real estate broker have a Canadian or US tax ID number?  They might not even have a local tax ID number in their own country, as in many countries only incorporated companies have a tax ID number (and not individual citizens as individuals might be exempt from paying income taxes, depending upon income levels).  So, we are already seeing some idiotic things taking place to restrict the transfer of funds, but I think this is only the tip of the iceberg.  I think it is very possible and highly likely you are going to see restrictions in the US for foreign transfers in the future.  The reason for this is that the socialist politicians are starting to take notice (and also have been taken off guard) that many middle class people (the one group that pays most of the taxes) are leaving, with their cash.  Which is to say, while they (politicians) were encouraged to push NAFTA, CAFTA, FAFTA and whatever else through, and the resultant move of manufacturing and corporations outside of the US for cost and tax savings, in the least they thought they had a permanent lock on the middle class (or a captive audience that could not or would not leave).  But to their surprise, middle class people have figured out they can leave too.  So, if corporations are now leaving (and pay some of the lowest income tax rates in the US anyway) - AND the middle-class jump ship also, who is going to be left to pay the bills?  This is the reality and what is scarring the heck out of them.  However, it is all a vicious cycle.  The more they pressure the middle-class, raise taxes, let inflation run wild, restrict movement of capital, take away civil liberties and so on - the more motivated people are going to be for their escape from Amerika.  So, I do not see the Patriot Act itself as the real problem.  The problem goes much deeper.  The Patriot Act is simply the symptom of a much larger dynamic as work, and that is the truly disturbing part about it.
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ANOTHER READER WRITES:
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Dear Mr. Schroder - I have given very careful study to investing our little life savings nest egg offshore.  It's all we have and every nickel earned honestly, but we are convinced the government of George Bush is illicit and that the corporations appear to be shielded under the lies of terrorism and national security, and are grabbing our pensions and, at the same time, reducing the health and social benefits promised to us forty years ago...these same benefits are the ones that we have already paid for by our taxes and hard work!  Lies, deception and broken promises: the Bush mantra.
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Anyway, an alternate plan of action is required along with a second citizenship.  Bush has gone too far. Even the Federal courts are now corrupt...stand back and witness this upcoming trial with Neo-Con operative Scooter Libby and Bush's appointed judge Reggie Walton! If, indeed, this even goes to trial before a Bush pardon...then watch Ambassador Joseph C. Wilson IV have to sue the whole bunch under a civil jurisdiction to get Cheney to testify under oath...such a waste of time and treasure to cover the lies...why not just tell the truth?  So the decision has been made to leave this den of thieves and no longer support it's corrupt and mutated self-serving government.      
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First off, we only have say $250,000 to invest to fund our retirement and we wish to do so via interest earned by bank CD deposits...but it scares us to death to have this money sitting in a DR bank.  Is our retirement money insured against fraud, theft or loss by natural disasters (Hurricane...Flood...etc?) or any other actions? Who insures it? Anything like this happen and how was it resolved and how long did it take before the depositors received their money back?  I wish to do 90-day CD deposits.  Will these pay 10% interest every 90 days with 250K in a one-year, two year or perhaps a five-year rotation option?  For example: I contractually agree and say the DR bank can have my money for one year or more, but same has to pay the 10% CD interest in full every 90 days...I use what I need to sustain myself and my wife in the local DR economy and keep rolling it over back into another 90 CD for minimum one year...or longer... if the bank can insure the safety of my money and my identity?  OK here's the deal: I can live in either place...Panama or the DR.
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Panama has the banking security laws...but if all these banks are requiring passports, good citizen police letters, etc. to open up bank accounts, even if you own a Foundation, would it be better to live in Panama where the banks are, at least for now, sworn to secrecy laws against the Big Brother Bush Cartel thugs?  With the rationale that the imperialists can only push the Panamanians so far because of the arrangement with Big Oil corporations that make their oil shipments through the Panama Canal mandatory...in addition to China's interest in the Canal and thus a vicarious Bush counter power balance push, etc.?
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The questions remain:
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If I hire you to do a Foundation set up with all nominees and just my wife and I able to deposit and withdraw money to remain 100% shielded from Big Brother, what happens when I go to the DR bank with $250k and my foundation affidavits, etc. and the DR bank wants to see my SSA # (which I will not give to anyone)...my passport...my "whatever else they need" to set up our retirement bank account?  What happens when the Big Corporations come to the DR under this new "CAFTA" agreement and start changing your banking privacy laws like they did in several other Caribbean jurisdictions?...and not to mention restructuring the DR "state owned" oil company, which will lead to increased profiteering by Big Oil and increased prices at the pump...say 100% above what they are now? With the caveat of a better life...better life for whom?  Will the new DR privatized oil cabal reject importing good cheap oil from Venezuela, for example, because Pat Robertson is jealous of what President Chavez is doing for his people? You get the drift.  But I digress: Does the DR have the same banking secrecy laws as Panama?  Therefore, are we as safe banking in the DR as in Panama?  What are the yearly maintenance costs for the Panama Foundation if we live in the DR?  These Panama real estate firms are offering us free Shelf Foundation or Corporation options if we make a $100,000 minimum real estate purchase from them, plus Anti-Aging programs for my wife...Medical insurance...like a one stop shop for all our retirement needs...?
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Why have copies of our American passports (now with tracking chips installed) on file with the Panamanian government registry for Foundations when one can buy a Shelf already set up and remain anonymous?  I suspect one can argue it's better to form your own than try to manage someone else's mess?  I respect your advice here. The Panamanian Shelf's appear readily available...they issue a private Protector affidavit, notarized and undated resignations of key nominees, etc. and you start banking.  I would love to be sitting in a nice penthouse condo in the DR and receive my 10% interest check deposited into my DR bank every ninety days and not have to be worried about Big Brother and whether I can afford to give my wife the medical treatment and physician prescribed pain remedies that she deserves for whatever time left that God gives us. It is obvious George Bush does not give a damn about me or the hell he is putting the average American citizen through. He has turned his back on the Constitution of the United States of America for personal monetary gain.  This is our retirement vision...can we do it?
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EDITORS REPLY: You have touched upon a large number of different themes and topics, and I will try to address some of them to the best extent that I can.  However, the short and concise version is - Yes, you can accomplish what you want just as a large number of other people like yourself already have (and for many of the same reasons).
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On the topic of banking, it is very interesting that many Americans often highlight FDIC insurance without really understanding that many other countries do have both very stringent banking regulations in place AND a government banking insurance fund system as well (that can be more solvent than FDIC depending upon the country of course).  In addition, most Americans have no idea what a bad joke FDIC really is.  As of June 2005, the supposedly solvent government run insurance most Americans have faith is has exactly US$1.32 in the Banking Insurance Fund (one dollar and thirty-two cents) for every US$100 a depositor (you) have on deposit with a local bank.  You do not believe me, do you?  Read it for yourself (the following press release indicates that they had US$1.29 for each US$100 in 1995 and now they got it up to US$1.32 - wow, I feel so much better).  Also, did you know that 93-percent of all banks covered by FDIC insurance do not pay a dime into it today?  How can that be you might ask?  Ask your local politician (if you can get a straight answer), but the short version is that the politicians felt sorry for all the poor banks and have actually given them exemptions over making banking insurance fund payments over the years (once again leaving it up to the taxpayers to bail out the banks as for sure the FDIC insurance fund does not have enough cash to do so).
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http://www.fdic.gov/news/news/press/1995/pr9570.html
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So, let us say hypothetically that just 3-percent of all banks in the US fail tomorrow morning.  Not a major banking equivalent of the perfect storm, but rather simply 270 banks out of the roughly 9,000 total US banks covered by FDIC (which represents three percent of the total and presumably 3 percent of the total monetary amount as well).  The truth is FDIC could not handle it, or better stated they simply do not have the money.  Where would they get the additional money needed? As always has been the case in the past (remember the S & L failures?), from Congress and indirectly from you - the American Taxpayer.  So, you the taxpayer would be paying your own new tax money today, so you can get a check back six months from now from FDIC.  Of course you do not realize it, and are probably thankful you have such a wonderful government safeguarding your bank account savings.  Is that not a great system or what?  If most people really knew how the system works, there would be riots.  Perhaps it is best they do not.  Ignorance is bliss.
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In any event, you asked about banking insurance elsewhere.  An estimated 70 countries around the world have some form of banking insurance, in one form or another.  That includes the Dominican Republic and Panama as well by the way.  In addition, it is very interesting to note that while the US politicians have been feeling sorry for all those poor American bankers, politicians in other countries have often increased the amount of insurance premium or deposit funds banks in other countries have to ante up for the reserve fund.  In some cases, it can be 5, 6, or even 7 percent in comparison to the 1.32 percent in the FDIC banking insurance fund.  Not only that, we can look at the very real and very recent take over of Ban-Inter (about two years ago) in the Dominican Republic whereby every single depositor was paid off regardless of account size (the FDIC coverage was changed a few years ago so the US$100,000 applies per household and not by account, so they add up your account, your wife or husbands account, your children's account - and so on - not to exceed US$100,000 for everyone in your family).  So, the banking insurance and regulatory system DOES work in other countries, and you should also not be led to believe that FDIC is the model everyone else wants to follow.  Who wants to mimic a system that is in reality insolvent?
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However, with that said, I do not think it a good idea to keep all your eggs in one basket, or in one country for a variety of reasons.  One of them simply being access to higher interest rates in other countries, and another safety through diversification.  In addition, on an unrelated but equally important note, you may actually do better (if your base currency is the US Dollar) living in a country that does not use the US Dollar and actually has a weaker currency prone to devaluation (such as Thailand, Philippines, Dominican Republic, Costa Rica, etc.) because you will most likely always keep up with inflation based on the exchange rates alone.  Also, it can often be the case the interest rates in the local currency are higher than local US Dollar deposits and are tax-free as well (not always, but often enough the case).  So, as a game plan, you might want to simply keep enough to generate a comfortable monthly income for yourself and diversify the rest elsewhere as a back-up nest egg).  How would such a plan work?  Quite simply, you might have a bank account in Austria, Ireland, The Czech Republic, Panama, South Korea, Thailand, etc.).  You might be living in the Dominican Republic and decide to invest say US$90,000 in Pesos (converted at 33) or RD$3 Million, and have that in a certificate of deposit or commercial paper at say 18-percent, which would give you about RD$45,000 pesos per month.  That leaves US$155,000.  The next question is where do you want to live? Do you want to buy a one-bedroom condominium on the beach for about US$70,000 (perhaps less in many cases) or do you prefer a two-bedroom for US$90,000?  Do you want a larger single-family home elsewhere for US$100,000? Living on the beach is nice, but so is a home with your own flower garden out back too.  Let us say you elect the higher amount option, so you are left with US$55,000.  You can invest some money in Ireland at 8 or 9 percent either is US Dollars or converted into Euros.  You can place some funds into a US Dollar time deposit in the Czech Republic earning 7 percent.  You may also elect to put some of it into a conservative bond fund or annuity and let it accumulate.  With a fully paid for home, you can certainly cover your basic monthly living expenses in the DR with RD$45,000 per month or the equivalent of about US$1,500 (telephone, cable, electric, food shopping, etc.).
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On the issue of forming a Panama Foundation and our services, we never ever use shelf companies or pre-formed entities perhaps owned by other persons previously.  The reason for this is you do not know what the previous person used the entity for and is it quite simple and fairly quick to form a brand new clean entity for your-self (it takes about 7 business days).  On the topic of using nominee services, which we can also provide for clients, in all such cases it would be a circumstance whereby the only thing in the public record are the articles of the foundation and the name of the persons acting as directors as well.  All other information, such as personal client information and even other documents (such as power of attorney or the regulations document indicating inheritance matters) is private record.  Stated more exactly, a power of attorney and the regulation document can be public record if you want it to, but most clients would prefer that it not be and of course as general practice this is the way we operate.  Also, you should know that the divulgence of client information by an attorney carries some stiff penalties in Panama, up to two years in jail and a US$50,000 fine for each occurrence.
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However, I think the more important matter really is the question of banking and assets.  Many people might ask: Well it sounds good that I can have anonymity and not have my personal information in the public record - but how do I know that the persons acting as nominees will not steal my money?  This is a very valid and legitimate question to be sure.  Some firms or persons acting as nominees will gladly indicate that they are willing to act as signatories on your banking or investment accounts, but in my opinion this is where the danger comes into play and I would be very suspicious of anyone so eager to get control over your own money. The solution then is perhaps to utilize nominees but also make arrangements that you, rather than the nominees, have control over investments and assets.  Again, when we work with clients, this is something we arrange and assist with.
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On another note, it is important to understand differences in fees when forming a foundation or company.  Which is to say, some clients ask the question - why are your fees higher than what I have been quoted elsewhere?  The answer is that you should understand exactly what you are getting.  For example, some firms will quote what seems like a low fee (plus throw in a free food processor as a bonus gift) but what are you getting really?  Most clients will not know to ask for certain certifications on documents in order to open a banking or investment account elsewhere.  Then when they go back and ask for this, the firm will say - Oh, that costs and additional US$250 - you did not say you wanted this.  Similarly, additional copies with original signature or other stamps, again for banking or investment purposes (some banks will take photocopies, others will not).  So, once again, most firms will give you ONE set of documents and nothing more.  When you go back and ask for another certified or official set, the answer will be, Oh- that will cost an additional US$300 (or whatever).  So, in this regard, we would rather give a client everything and completely up front, so they do not have to come back 60 days later asking for something they never knew they would need when trying to open an account someplace (and aside from spending additional funds, consider all the time wasted in terms of waiting for these other items).  Sometimes cheap is expensive.  The problem is, of course knowing when this is in fact is the case the case or not when looking for services.