Financial institutions fear to be wittingly or unwittingly implicated when they are used to settle, facilitate, or finance international trade transactions (e.g., through processing wire transfers, providing trade finance, and issuing letters of credit and guarantees). Implication is criminal prosecution for money laundering.
Financial Action Task Force (FATF) rules extends to everybody and leads to freezing up of non-compliant banking, people and businesses, financial service provider, you name it. Banks are scared of a hiding and therefore only accept transfers from compliant financial institutions.
Perhaps a bank has mentioned to you that they have no problem with FATCA, CRS or Automatic Exchange of Financial Information. Some mis-understand what they have said. What they have said is we only accept transfers from Financial Institutions who have performed the AML & KYC.
For lack of a clean AML & KYC no financial institution would send or receive a transfer of funds.
Therefore, any middle man, entity, company, business or, whomever is between you and the source of funds needs to be uncovered and verified as clean and compliant AML & KYC.
Uncountable sums of money blocked inside of banks
There are uncountable sums of money blocked inside of banks. That money will never move! In no uncertain terms bank officers may have already spent this money because they know it will never be claimed. The spoken word alone is worthless to Financial Institutions and Tax Attorneys in over 200 Countries. What that means is that a middle man who professes reasons for secrecy is suspicious of money laundering for being secret. Transparency is required unless it is not required in rules on exemptions.
What Is Trade-Based Money Laundering?
”Trade-based money laundering” (TBML) involves the exploitation of the international trade system for the purpose of transferring value and obscuring the true origins of illicit wealth.” Such as:
- Corporate vehicles—such as companies,
- partnerships, and
- other types of legal persons and arrangements
Despite the essential and legitimate role that corporate vehicles play in the global economy, under certain conditions, they have been misused for illicit purposes, including money laundering (ML), bribery and corruption, insider dealings, tax fraud, terrorist financing (TF), and other illegal activities.
Beware the misuse of legal persons and financial entities
In the past Trusts and Companies have been used to conceal the control of assets, including the proceeds of crime. For example, a trust may have been created in one jurisdiction and used in another to hold assets across jurisdictions in an attempt to disguise the origins of criminal proceeds.
The availability of beneficial ownership information today assists competent authorities by identifying those natural persons who may be responsible for the underlying activity of concern or who have information to further the investigation. This means financial entities are not attractive for criminals.
Financial institutions have an important role to obtaining beneficial ownership information which helps prevent the misuse of entities in the financial system. The Financial Action Task Force (FATF) has the strength to ensure that countries implement measures aimed at improving availability of both basic and beneficial ownership information.
You want to save for retirement, then you construct a retirement plan that is recognized tax compliant and exempt from FATCA and CRS and by so doing you are exempt from capital controls.