Transcript Document

2006 CAIB Conference
Trinidad, November 17th
The Incorporation of the USA Patriot Act
Provisions in the
Regulatory Regimes of the Region
Colorado Foreign Capital Depository
Opportunities in Onshore Banking for
Non-US Families and their companies
vs. Operating in the New World of
Offshore Banking
American International Holding LLC © 2006
American International Depository & Trust
American International Depository & Trust is:
 An International Private Bank and
Trust chartered under the Foreign
Capital Depository Statutes of the State
of Colorado, and
 The first and only Foreign Capital
Depository within the U.S. strictly
legislated for the benefit and protection
of non-citizens who are non-residents of
the U.S.
American International Holding LLC © 2006
American International Depository & Trust
US PATRIOT ACT of 2001
Section 5318 (i) requires U.S. financial
institutions to establish due
diligence policies, procedures, and
controls reasonably designed to
detect and report money laundering
through correspondent accounts
and private banking accounts that
US financial institutions establish or
maintain for non-US persons.
American International Holding LLC © 2006
American International Depository & Trust
ENHANCED DUE DILIGENCE
•
Enhanced & Extraordinary Due Diligence
Required
– U.S. Patriot Act requires any U.S. bank with
accounts from non-U.S. persons or non-U.S.
residents that require a minimum deposit of at
least $1 million to establish appropriate,
specific, & “enhanced” due diligence polices,
procedures, & controls to detect & report
instances of money laundering
– Colorado law requires the Bank to exercise
“extraordinary” diligence to determine the
genuine identity of a customer
American International Holding LLC © 2006
American International Depository & Trust
Know Your Customer
• To make reasonable efforts to determine
the true identity of potential customers.
• To take particular care to identify
ownership of all accounts and those using
safe custody facilities.
• To take reasonable steps to be aware of
any unusual transaction activity.
American International Holding LLC © 2006
American International Depository & Trust
Anti-Money Laundering
-Laws and regulations are changing on a daily basis
--Know Your Customer
--Ascertain the source of funds
--All crimes are indictable, not only those related to
drug dealing
--Financial intermediaries included
--Compulsory reporting of suspicious activity
--Mutual legal assistance
--Monitoring of trends: AML, E-Commerce
American International Holding LLC © 2006
American International Depository & Trust
Identify Your Customer
Request a copy of the prospective client’s passport or other clear means of
identification such as a driver’s license with a picture.
Insure the prospective c1ient is the principal and not an agent for someone
else. If an agent, determine who the principal is and obtain the requisite
identification.
If the prospective client is an entity, obtain proof of creation and good
standing, addresses of offices, names of officers and directors, partners or
members and the purpose(s) of the entity.
If the prospective client is a trust, obtain the identity of, and addresses for, the
trustee(s) and/or beneficiaries, as well as a copy of the trust agreement.
American International Holding LLC © 2006
American International Depository & Trust
Identify Your Customer cont.
Obtain one or two letters of recommendation from a reputable, independent
source, such as a financial institution, professional advisor or the like.
If the engagement is ongoing, the required information should be updated
periodically, at least annually.
Identify and understand the nature of the engagement
Identify the parties involved.
Determine the nature of the engagement.
Identify any pertinent relevant information necessary to represent the client
for the engagement, such as insuring there are no conflicts of interest, or,
if there are, obtaining appropriate waivers.
If any information is unclear it should be verified.
An engagement letter, including a description of the services to be rendered,
should be prepared and executed by the client.
American International Holding LLC © 2006
American International Depository & Trust
Risk-Based Procedures Adopted
– Procedures point out when Bank will use
documents, non-documentary methods,
or combination of both methods
– Bank’s detailed account opening forms
specify required identifying information
to be obtained from each customer
– Bank also fulfills verification
requirements through non-documentary
methods—e.g. by comparing information
provided by customer to information
received from consumer reporting agency,
public database, or other source
American International Holding LLC © 2006
American International Depository & Trust
“OFAC”
The Office of Foreign Assets Control
("OFAC") of the U.S. Department of the
Treasury administers and enforces
economic and trade sanctions based on US
foreign policy and national security goals
against targeted foreign countries,
terrorists, international narcotics
traffickers, and those engaged in activities
related to the proliferation of weapons of
mass destruction.
American International Holding LLC © 2006
American International Depository & Trust
Colorado Foreign Capital Depository
 BEFORE 9/11
 BEFORE THE US PATRIOT ACT
American International Holding LLC © 2006
American International Depository & Trust
FCD- Signed into law June 2001
-“The Colorado Foreign Capital
Depository Act sets out some favorable
conditions for international banking
clients, especially with respect to the
civil & criminal liability of state & local
regulators, as well as the Bank’s
personnel, and in addition the
restrictions regarding the enforcement
of foreign judgments under the aspect
of asset protection.”
American International Holding LLC © 2006
American International Depository & Trust
What is a Foreign Capital Depository?
• A Foreign Capital Depository (FCD) is
a Financial Institution in which
individuals and their business entities,
who are not citizens or residents of the
United States, may deposit assets for
investment and safekeeping. Since an
FCD is not a traditional commercial
bank, it does not engage in lending.
American International Holding LLC © 2006
American International Depository & Trust
The First FCD:
• American International Holding LLC
was established in April 2003.
• On October 31st 2003, American
International’s Foreign Capital
Depository charter was granted by the
State of Colorado Banking Board. It is
the first and only Foreign Capital
Depository in Colorado AND the United
States.
• Under the U.S. Federal Reserve Act,
American International is a financial
institution with a direct Federal
Reserve account.
American International Holding LLC © 2006
American International Depository & Trust
Compliance
– Bank is fully compliant in every way
– Compliance Policies & Procedures
modeled largely from Swiss banking rules
– Bank intends to have “first class
depositors, do first class business, in a
first class way”—(old J.P. Morgan slogan)
American International Holding LLC © 2006
American International Depository & Trust
The Components of Colorado Law:
• Financial Anonymity
• Powerful Asset Protection
• U.S. Political and Economic
Stability
American International Holding LLC © 2006
American International Depository & Trust
Financial Anonymity
• Pseudonym accounts are the only
identification used for transactions.
• American International has the
statutory duty to protect and hold
all client information confidential.
• American International must
defend the customer’s private
interests in US courts as required
by law.
American International Holding LLC © 2006
American International Depository & Trust
Powerful Asset Protection
• Foreign judgments are not easily recognized.
• There are substantial monetary penalties when a
lawsuit brought against one of our clients filed in
Colorado is unsuccessful (up to $1 million).
• Hiring attorneys on a contingency fee basis to sue a
client of American International is prohibited.
American International Holding LLC © 2006
American International Depository & Trust
Client Needs:
• Investment Products:
Access to competitive products in various asset classes
• Asset Protection:
Legal safe haven from seizure or currency devaluation due to
economic/political instability
•
Confidentiality:
Identity of the account holder is privileged and protected by law
• Favorable Tax Treatment:
Possible mitigation of tax impact
• Real-Time Information Access:
24/7/365 access to information, quick response to client requests
American International Holding LLC © 2006
American International Depository & Trust
The Private Bank’s Strengths (cont’d)
• Risk-Based Procedures Adopted
– Procedures point out when Bank will use documents, nondocumentary methods, or combination of both methods
– Bank’s detailed account opening forms specify required
identifying information to be obtained from each customer
– Bank also fulfills verification requirements through nondocumentary methods—e.g. by comparing information
provided by customer to information received from
consumer reporting agency, public database, or other
source
American International Holding LLC © 2006
American International Depository & Trust
Privacy Protection (cont’d)
•
Correspondent Banking Relationships
– Recent legislative changes—especially in European
Union—have eroded several important privacy & asset
protection features that were previously available to
depositors in those jurisdictions
– Some depositors may want privacy & asset protection
features of a Private Bank, but want to keep funds in
their native currencies, before the actual transfer of
funds into Colorado or the United States
American International Holding LLC © 2006
American International Depository & Trust
Privacy Protection (cont’d)
•
Bank may not disclose information to
non-government entities & has a high
threshold of disclosure to federal, state,
& local government agencies
•
Bank has received a FCD Colorado
State Banking Charter & therefore is
regulated only by the Colorado State
Banking Division
American International Holding LLC © 2006
American International Depository & Trust
Asset Protection
• Since no individual is permitted to even request information
from Bank, judgment creditor is unlikely to learn that a
person is a customer of Bank in the first instance
• Person seeking recognition of foreign judgment against a
depositor of Bank must prove all of the following:
– Foreign court had jurisdiction over subject matter,
– Foreign court had personal jurisdiction over customer
when judgment was rendered, &
– Judgment was rendered under a system that provides
impartial tribunals or procedures compatible with
requirements of U.S. due process of law
American International Holding LLC © 2006
American International Depository & Trust
Our Location: Denver, Colorado
• With it’s growing focus on business,
scenic beauty, world class skiing
and summer tourism, Colorado has
always been a destination, to live
and to holiday, for people around
the world. Now, it can be home to
their assets as well.
American International is located on the top
floor of the Republic Plaza in Denver, CO.
American International Holding LLC © 2006
American International Depository & Trust
Thank you for your time
John L. Page
Regional Director Latin America & the Caribbean
American International Depository & Trust
Denver, Colorado U.S.A.
[email protected]
1-561-789-7472
American International Holding LLC © 2006
American International Depository & Trust
Management
• E. Jerry James – Chairman, Founder; current President of
The Offshore Institute
• John L. Page – Regional Director; Latin America & the Caribbean
• Sailesh C. Barchha-Managing Director; Europe, Middle East, India
& Asia
• Ray Juncosa – Senior Vice President, Compliance Officer, over 25
years in Bank Management
• Richard Rosenberg – Privacy Officer; 15 yrs management
experience at Qwest, Accenture, Budget and the US Navy
• Walter Diamond – Chair, Advisory Board, Renowned
International tax expert & author, including: KPMG, Deloitte
Touche and Federal Reserve. (Tax Havens: Matthew Bender)
American International Holding LLC © 2006
American International Depository & Trust
The Newest Form of Private Banking
in the World is in Colorado and its name is:
American International Holding LLC © 2006
American International Depository & Trust