Striking OIL

I wonder if the partners of Harney Westwood & Riegels ("HWR") could have imagined what would become of their little baby.

In the pre-computer age when international business was done on light-sensitive faxes, HWR set up a company incorporations arm, called Offshore Incorporations Inc."("OIL"). OIL capitalised on the surging Asian demand for IBC in the late 80's, particularly BVI IBCs.

Since then OIL has captured a huge market share of that business particularly in HK and Singapore. Much to the chagrin of others who can't do business at wholesale (or below wholesale) prices. Along the way, affliated companies like Acceptor and Credence Trust were set up or acquired.

Now today, OIL again will change hands to the group behind Vistra (IK Investment Partners, a PE group). Price tag around US$250M-300M.

http://www.reuters.com/article/2011/03/24/offshore-ikpartners-idUSL3E7EO1IS20110324
http://www.vistra.com/content/254

I hope that this merger creates more opportunities for trust people in the region but from a trust services perspective, I wouldn't lose any sleep over this.

Employee Number 007: Licensed to.....

Headline: Merrill Banker Indicted With 18 in Brazil Says He's Scapegoat

http://news.businessweek.com/article.asp?documentKey=1376-LBOLML0UQVI901-74S1VTOIBUAKLFQHBKH7UE2TQG or
http://news.businessweek.com/article.asp?documentKey=1377-a_EY9MLo0vtk-3TVAHOOB3A3SQFUL4UPNIJI3PT

The above is a rather shocking article. I mean arresting bankers with machine guns, accusing banking heads of sanctioning and violating banking and currency exchange laws, tax evasion......shocking, just shocking...........that they only got 18!

But is there an Asian connection? Not directly but there are plenty of banks booking South American money into Singapore and Hong Kong, so some of the money trails will lead here. Who's got Brazilian clients, raise your hand? Which Asian banks have Brazilian or Latam teams sitting down the hall?

Do you know which Asian countries have exchange controls? Which permit un-constrained remittances? Which leads to the whole cross-border business can-of-worms.

Most people assume that an international bank can do business in any country where it has an office. Wrong. Each country "branch" is typically only licensed to market and do business in that particular country. So Bank ABC in HK is only allowed to do business within HK, regardless if there is a Bank ABC in Singapore or Thailand, etc.. If you're employed by Bank ABC in HK and you are asked to travel for marketing or any "restricted" activity in say Indonesia, then you are in violation of Indonesian law. If you do anything to entice, solicit or help move money outside Indonesia then you probably have violated more Indonesian laws. And as trustee of funds that may have been improperly sourced then who knows if they arrest you too at the airport? Thankfully, most trust activities are not considered "restricted", but have you checked yourself?

Some where deep down in the list of rules and regs that bankers signed off as reading and complying with when they were employed will be a policy or manual on cross-border business. These are the Commandants. Didn't follow them? Sorry, we can't help rogues. Ask to break the Rules? Seek legal counsel and a headhunter as you'll be on the street soon and with the reputation of being "uncooperative" and "difficult". Good luck meeting your targets if you can only sit and wait for some customer to fly in to meet you.

I guess those that market into countries where they are not licensed to do so will have to upgrade their "James Bond" kits for their people. The kit usually includes:
- 1 gmail account
- 1 disposal/top up mobile phone card
- "business card" that has only the name, above phone number and email address. Must absolutely not contain any information as to where this person works or the company name/details.
- encrypted laptop, but not recommended as are most other hand-held technologies (although RIM/Blackberry did have some good anti-snooping features hence their attempted/temporary ban in some countries)
- 1 self-booked and self-paid airplane ticket
- 1 self-booked and self-paid hotel reservation
- tip sheet on how to lie to Immigration or others should they ask
- tourist maps, suntan lotion and swimsuit to support your assertion that you're on vacation.
- DHL or FedEx hotlines so you can readily get documents in and out of the country fast

Laugh, but every day, there are dozens of James Bonds in the hotel lobbies, at the airport lounge, in the coffee shop near the office they are visiting. Heck some of them are brazen enough to talk shop so indiscreetly that you know they are "agents" and the mission they are on.

[Of course as face-recognition technologies increase, our James Bonds may have trouble getting by without some Nathan Hunt makeup kit.]

If you have one of these Bond kits, then don't surprised if you get dragged off in the middle of the night as you're likely the Asian version of Alexandre Caiado.

We Are Family......

Aw....a happy ending to the Stanly Ho saga......at least for today:
http://www.thestandard.com.hk/news_detail.asp?we_cat=11&art_id=109010&sid=31603906&con_type=1&d_str=20110311&fc=8