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A Clean Look At The Trust And Banking Business

By John Dietz - Email Editor

Date: July 25, 2006

Every so often, brilliant minds get together for a conference/debate over the benefits of Trusts and their related assets. The usual suspects are convened. This G8-type summit includes all the frills of a James Bond encounter in the Swiss Alps: expensive cigars are smoked, 24-year-old ports are digested, and people with a lot of titles next to their names pontificate on various Trust and banking issues.

Many nations have a vested interest in regards to handling affairs of money and finance. Each part of the world has it's specialty: Australia has commodities; oil is in the Middle East; and not so long ago if you wanted a brassiere, you only needed to stop in Bologna, Italy.

In 2000, the 26-nation Financial Action Task Force put Liechtenstein along with other countries on the list of uncooperative nations in the fight against money laundering. This small principality (stuck between Austria and Switzerland) quickly got busy trying to change regulations from within.

Prince Alois of Liechtenstein, along with the local government, decided it was time to effect policy change. Liechtenstein, along with it's 34,000 plus residents, has now fast-forwarded into becoming the envy of the banking and finance industry. This scenic hamlet from a bygone era now has state-of-art Trust laws and many new glistening banking structures to prove it.

The news today is that Liechtenstein has a fully independent (separate from the government) regulator called Finanzmarktaufsicht (FMA). They also have new diplomatic relations with Germany (embassy in Berlin), good relations with the USA and others nations, and, most importantly, they are the first country in Europe to implement new asset management company law under the single-license principle, meaning a Liechtenstein asset management company can now offer its services in all of Europe.

A known guru to the industry, Jack Flader, Founder of Global Consultants and Services Limited says, "I personally think Liechtenstein is very well-regulated with excellent professionals, conservative banks, time-honored legislation and a culture of careful confidentiality that is wholly uninterested in "bad" business."

If you think Liechtenstein is nothing more than one big bank, think again. While banking makes up a large part of Liechtenstein's GDP, companies like Hilti, Hoval, Unaxis, ThyssenKrupp Presta and more, give the country a major global presence.

What's to be taken away from this? First of all, the bad guys are finding it difficult, if not impossible, to find places to hide shady money. Secondly, all sovereign nations would like to have more of your dollars, especially legitimate ones. There is a full compliment of financial institutions that would like to invest your money.

The point is, banking is what some nations sell; it's their product. In the case of Liechtenstein, which was taken off the Financial Action Task force in 2001, it has now become one of the brightest stars in the banking industry. My insiders tell me that the Prince and government are committed to making safe, secure banking part of their legacy.

Trust and banking have been around since time immemorial. So when you ask, is it safe to put my money outside of U.S. borders? The answer is two fold: Always be prudent, but remember places like Liechtenstein have a vested interest in keeping your money safe, as they have more to lose than you and I.

Until next time,

John

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