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(Private banking services incorporate the use of a wide range of separate…
Private banking services incorporate the use of a wide range of separate products and services, including:
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Trustee services
‘For the purposes of this Convention, the term “trust” refers to the legal relationship created –inter vivos or on death – by a person, the settlor, when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a specified purpose. A trust has the following characteristics:
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c. the trustee has the power and duty, in respect of which he is accountable, to
manage, employ or dispose of the assets in accordance with the terms of the trust and the special duties imposed upon him by law’
Trusts are a development of the unique feature of common law systems, which distinguish between:
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A significant percentage of the offshore financial services industry centres on professional trustee services where businesses often referred to as ‘trust companies’ or ‘fiduciary businesses’ agree to assist in the formation of trusts and to act as trustees of them.
Life insurance
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in what is known as the secondary market. These second-hand policies provide the purchaser with a benefit upon the death of the life assured, someone who is totally unconnected with them and their activities. On the death of the life assured the benefits are paid to the owner of the policy, i.e. the money launderer, who receives the money in the form of an insurance company cheque.
Over payment of premiums on insurance policies, with the expectation that the insurance company will refund the overpayment by cheque, is another way that money launderers use insurance products.
Assignment of claims – a money launderer may arrange with groups of legitimate individuals, such as owners of businesses, to assign any legitimate claims on their policies to be paid to the money launderer. The launderer promises to pay these individuals the face value of the claim amount in cash, money orders or traveller’s cheques plus an additional percentage for the ‘facility’.
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bearer shares
UK legislation introduced in 2015 prohibits UK companies from issuing any further bearer shares and all existing bearer shares must be surrendered, becoming registered shares.
In Switzerland, the holders of bearer shares must now to report the acquisition as well as the name and address of the acquirer to the company and companies that have issued bearer shares must keep a register of their holders.
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Trading companies
Trading companies are an integral part of the international trade in goods and services Non-existent international trade that is supported by false paperwork issued between criminal enterprises and then relied upon to justify international fund movements often features in money laundering schemes. The following is a simple example.
Discretionary trusts
A discretionary trust is so called because:the beneficiaries have no fixed beneficial entitlement to the trust property.
Discretionary beneficiaries may not be named individually but may be defined as members of a class of beneficiaries such as ‘all grandchildren living and yet to be born’ or it can be left to the trustee to decide who should benefit.
This means that it is possible for a beneficiary to be named or changed at any time, making it possible to conceal a beneficiary’s identity until the point in time when the ownership of the trust property is passed to them.
Blind trusts
A blind trust is a form of trust that attempts to disguise the identity of the individuals it is actually designed to benefit, either by not naming any beneficiaries at all or more usually by naming charitable beneficiaries. Trustees then rely on their power to add beneficiaries in order to make distributions to the intended beneficiaries. There have in fact been cases where the trustees have not even exercised the power to add beneficiaries, but have simply made distributions that have benefited individuals who are not named.
Dummy settlors
A dummy settlor is a person who agrees to settle property into trust on behalf of the person who owns the underlying assets for the purpose of concealing the identity of the original party.