A Note
From Nick Giambruno:
I consider “Financial Martial Law” a must-read.
In this timely article, which I’m sharing below, my friend and
colleague Chris Lowe warns that banks have become arms of the US government.
This means terrifying things for your savings.
When I
read this article, I knew I had to pass it along to International Man readers.
Chris is
the editor of Bonner & Partners’ Inner Circle publication,
which shares insights from Bill Bonner’s personal network of analysts and
investment experts around the world.
Bill and Doug Casey are decades-old friends and colleagues.
Like Doug, Bill thinks the worst is yet to come. He says the
next financial collapse will be worse than the market crashes of 1987, 2000,
and 2008.
The window of opportunity to protect your money is rapidly
closing. As Chris explains below, capital controls are already here.
Financial
Martial Law
By Chris
Lowe
Already, as an American, you are not free to spend your money as
you see fit. (For a full breakdown, see “Bank Secrecy Act Regulations
Explained” below.)
JPMorgan Chase—the country’s biggest bank—has banned cash
payments for credit card debt, mortgages, and car loans. It has also banned the
storage of “any cash or coins” in safe deposit boxes.
Bank Secrecy Act Regulations Explained
By Bonner & Partners analyst
Joe Withrow
The Bank Secrecy Act (BSA) requires US financial institutions to
assist federal agencies in preventing money laundering.
All financial institutions are required by law to keep records
of all financial activity, including cash purchases of “negotiable
instruments”—checks, money orders, etc.
These records are open to government inspection at any time.
They are also subject to periodic audits by both federal and state governments.
All financial institutions must immediately file a Suspicious
Activity Report (SAR) with the federal government whenever a customer engages
in transactions the institutions deem strange or inconsistent with normal
behavior. This is open to interpretation.
There are also specific BSA regulations requiring financial
institutions to file government reports. They are:
Currency
Transaction Report (CTR): A CTR must be filed for each deposit,
withdrawal, exchange of currency, or other payment or transfer by, through, or
to a financial institution that involves a transaction in currency of more than
$10,000.
Multiple currency transactions must be treated as a single
transaction if the financial institution has knowledge that: (a) they are
conducted by or on behalf of the same person and (b) they result in cash
received or disbursed by the financial institution of more than $10,000.
Report of
International Transportation of Currency or Monetary Instruments (CMIR): Each
person (including a bank) who physically transports, mails, or ships, or causes
to be physically transported, mailed, shipped, or received currency, traveler’s
checks, and certain other monetary instruments in an aggregate amount exceeding
$10,000 into or out of the US must file a CMIR.
Report of
Foreign Bank and Financial Accounts (FBAR): Each person
(including a bank) subject to the jurisdiction of the United States having an
interest in, signature, or other authority over one or more bank, securities,
or other financial accounts in a foreign country must file an FBAR if the
aggregate value of such accounts at any point in a calendar year exceeds
$10,000. A recent district court case in the 10th Circuit has significantly
expanded the definition of “interest in” and “other authority.”
Designation
of Exempt Person: Banks must file this form to designate an exempt customer
for the purpose of CTR reporting under the BSA. In addition, banks use this
form biennially (every two years) to renew exemptions for eligible non-listed
businesses and payroll customers.
There are also plenty of regulations about opening a bank
account in the US…
Form W-9
Request for Taxpayer Identification Number and Certification: Applicants
must be able to provide a taxpayer ID and certify under penalty of perjury that
their ID is correct. The bank is required to enforce the IRS’s “backup
withholding” rule if applicable. This means it must withhold customer funds if
the IRS determines that you failed to provide a valid taxpayer identification
number or failed to pay taxes on 1099 income.
Identification
Requirements: Applicants must provide their name, permanent address,
taxpayer identification number, and date of birth to verify their identity.
Applicants must also submit a valid driver’s license, state ID, passport, or
other primary identification documents.
Office of
Assets Control (OFAC) Compliance: The bank must make sure the
applicant is not on OFAC’s prohibited individuals list. This list includes
individuals who have engaged in transactions with governments or individuals
located in Cuba, Burma, Myanmar, Iran, and Sudan.
Unlawful
Transactions: Applicants must certify that their account will not be used for
internet gambling or any other illegal activity.
And all
US banks now view large cash withdrawals as suspicious.
Under the Bank Secrecy Act, if you withdraw $10,000 or more in a
day, your bank is required to file something called a Currency Transaction
Report with the Financial Crimes Enforcement Network (FinCEN). This is a
special bureau within the Department of the Treasury that’s tasked with
combatting money laundering, terrorist financing, and other financial crimes.
And your
bank is required to file something called a Suspicious Activity Report with
FinCEN if it believes you are trying to avoid triggering
a Currency Transaction Report by withdrawing smaller cash amounts. This puts
all cash withdrawals under the microscope.
And taking out cash from the bank isn’t the only activity the
government deems suspicious.
Other actions that will trigger a report being filed with the
feds include: depositing $10,000 or more in cash with your bank… a foreign
exchange transaction worth $10,000 or more… taking more than $10,000 in cash
into or out of the US… receiving more than $10,000 in cash in a single payment
as a business… or having more than $10,000 in accounts outside the US during a
calendar year.
And even if you manage to get your cash out of your bank, having
it on your person also makes you a target of the authorities.
Under civil asset forfeiture laws, police and federal agents can
confiscate any cash you might have on you if they merely suspect it was
involved in a crime. They don’t need to bring criminal charges against you or
prove any wrongdoing. And they can keep any seized cash for themselves.
According
to The Washington Post,
since 2007, the DEA alone has seized more $3.2 billion in cash from Americans
in cases where no civil or criminal charges were brought against the owners of
the cash.
And forget about opening up a bank account offshore to diversify
your risk of these kinds of clampdowns.
The Foreign Account Tax Compliance Act, or FATCA, became law in
2010. It imposes a lot of red tape on foreign banks with US clients. And the
costs of complying with all this red tape means opening up bank accounts for
Americans no longer justifies the benefits of overseas banks.
As a
result, it’s now extremely difficult for Americans to open accounts
overseas. It’s de facto capital control, even if the
government won’t admit it.
Reprinted
with permission from International Man.
Nick is Doug Casey’s globetrotting companion and is the Senior
Editor of Casey Research's International Man.
Copyright ©
2017 International
Man
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