With new money laundering legislation and strategies, increasingly onerous reporting requirements and a global push for greater information-sharing, the United States is building up its arsenal against international crime.
One area where law enforcement officials could not have expected much assistance from is the offshore banking industry. Perhaps intimidated by legal precedent or astute managers of financial risk, the offshore private banking industry appears to have accepted the controversial bank secrecy waiver agreement as a cost of doing business both offshore and in the US. The waiver agreement releases the bank from liability for breach of confidentiality in the event the bank is forced by a foreign government or financial authority to disclose confidential client records.
The waiver agreement is not new, however. Various banks around the Bahamas and other previously “safe” offshore jurisdictions have been using this agreement for over a decade.
The waiver is now mandatory, no matter what the client's home country, at virtually every major bank or trust company which has a US presence.
It is also mandatory for US citizens. However, smaller banks without a US presence do not usually require a waiver.
Waivers like the one used by CIBC are fairly strict in their demands from clients. The CIBC waiver requires the customer to acknowledge that "the Governments of other jurisdictions may have valid powers under their laws to require the Bank under certain circumstances . . . to produce information and records of the Bank to the specified Government and judicial authorities of those jurisdictions." The waiver also allows the bank to produce information and records ". . . where and to the extent the Bank is of the opinion that the Law of those other jurisdictions requires the Bank to do so . . ."
Waivers first gained prominence about 10 years ago following a number of high-profile US court cases involving offshore money laundering. One involved the Bank of Nova Scotia, the other involved Barclays Bank. In these cases, law enforcement agencies wanted to obtain certain confidential financial records held by the offshore bank. Citing their legal obligations under offshore bank secrecy legislation, the banks refused to disclose the records. The US courts simply ordered the US branches of these offshore banks to hand over the relevant documents or face massive fines for contempt of court if they failed to cooperate.
The squeeze comes from US authorities on one side, and local bank secrecy laws on the other. For example, the Bahamian Banks and Trust Companies Regulation Act 1965 stipulates stiff penalties: up to two years in jail and a fine equivalent to $15,000 for any employee who discloses confidential client information.
Some financial institutions consider the waiver a preventive tool and part of their due diligence procedures. If clients agree to waive their rights in cases where law enforcement authorities are conducting an investigation, which, in the banks view it is an additional indication that the client has nothing to hide.
It is still uncertain whether a bank could legally insulate itself from criminal sanctions imposed by the offshore establishment that you have entrusted your money with by signing a waiver agreement with a third party client. Until a bank is prosecuted for a violation of the bank secrecy legislation, waiver agreements are likely to continue to be an important part of the private banking industry.
SEO Solutions and one way link
publicity services provided by LinkAcquire.

David C Skul - CEO
LinkAcquire.com and Relativity, Inc. can provide
global market exposure and solutions.

More Articles-http://www.articles-hub.com

This article is free for republishing