Offshore Financial Centers

Paper Summary:

This paper relates that offshore financial centers (OFCs) are essentially foreign banking locations which enable companies and individuals from the U.S. to place their money within these foreign accounts, untraceable to the US government. The paper discusses three problems with these accounts: 1) that of legitimate US businesses utilizing OFC's to avoid paying taxes; 2) the problem of drug-trafficking and the depositing and subsequent use of "dirty" money; 3) that of terrorist organizations using such accounts to hide their money. The paper looks at the necessary solutions to ensure that OFCs no longer enable these damaging activities.

From the Paper:

"Offshore Financial Centers (OFC's) are an interesting phenomenon, indicative of the ingenuity of those with the requisite finances with which to utilize them. Offshore Financial Centers are essentially foreign banking locations which enable companies and individuals from their native land, in our case the United States of America, to place their money within these foreign accounts, untraceable to the US government. This in essence means that the money is not taxed, and its origin is also not questioned, enabling those with "dirty" money, earned through illegal means, to deposit it there, then issue legitimate outgoing transactions through the process of "washing", converting the illegal currency into legal tender via the OFC."

Sample of Sources Used:

• Hira, Anil. Dislocations and the Global Economy. The Futurist. May/June 2007, 41.3 p30-31
• Law.com Dictionary - Offshore Corporationhttp://dictionary.law.com/default2.asp?selected=1390&bold=%7C%7C%7C%7C
• Justice gets wrong statute, pays $100M price. Associated Press, via CNN.COM. posted: 9:40 p.m. EDT, March 28, 2007 http://www.cnn.com/2007/LAW/03/27/tax.scofflaw.ap/index.html

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