Jurisdiction Shopping

[Duncan Frissell <frissell@panix.com>]

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At 01:00 PM 8/21/97 -0700, Tim May wrote:

>Interestingly, many of the strategies for moving assets offshore, to
>offshore banks and money havens, is not so much to evade taxes as to
>"protect assets." Protect them from ransom/extortion demands of the _legal
>profession_ sort, e.g., "deep pockets" lawsuits. For example, somebody
>finds out that J. Random Cypherpunk is  financially well off--perhaps from
>the increasing number of online credit report records, etc.--and decides to
>have a convenient "fall" on his property. He then sues for some large
>amount, either covered by Homeowner's Insurance, or more.

Foreign Asset Protection Trusts (FAPTs) have indeed become popular for 
protection against general lawsuit and dom rel liabilities.  As long as not 
done in contemplation of bankruptcy, such transfers remain legal.

Another popular reason is privacy in general.  US domestic accounts can be 
examined by any federal, state, or local government employee who can sign his 
name to a subpeona.  Any lawyer can also examine account records in the 
course of discovery proceedings.  There are some limits to the above powers 
but not very substantial limits.  For all we know, FINCEN has a nice Win32-
based point and click browser that can tiptoe through every bank and 
brokerage account in America.  If they don't have one yet, I'm sure they are 
trying to get one.

If domestic lawyers or governments want the same sort of access to accounts 
in other jurisdictions, they have to spend many thousands of dollars and 
months or years of personnel time.  Cuts down on their capabilities.

DCF

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