Anonymous Offshore Account

Anonymous offshore accounts are established by persons who normally own small businesses, do not feel prepared to incorporate their businesses offshore and may not necessarily need to open an offshore bank account. Although the concept of what is an anonymous offshore account may differ from one jurisdiction to another due to banking regulations that have been established for regulating banking activities, the traditional use of an anonymous offshore account would be to achieve a greater degree of banking privacy than what would be given by any onshore bank as well as offshore banks in general.

The typical anonymous offshore bank account does not bear the name of the account holder, who is assigned a number or identification code by which he or she is identified and is used for doing transactions. In this way, the owner of an anonymous offshore account remains unknown to the bank.

Anonymous banking is as effective as regular offshore banking and is useful for receiving payments, making international wire transfers and accessing funding methods such as E-Gold transfers, Western Union, Money Orders and Traveler’s Checks. Small businesses that provide online services can gain from opening an offshore anonymous account because it facilitates receiving electronic payments and transfers while giving access to internet banking and multi currency anonymous accounts. Furthermore, the anonymous nature of the account does not restrict it from being issued a debit card which can be used at any automatic teller machine (ATM) in any part of the world. Anonymous offshore accounts are opened with less restrictive account opening requirements.

However, increased international offshore banking regulatory measures have prompted all offshore jurisdictions to enact legislation that restrict the opening of anonymous accounts by both onshore and offshore banks within them. Offshore banking institutions that provide anonymous offshore banking currently do so only at the level of the tellers and other bank officials to whom user codes or numbers will be given for identifying the account, but full identification details of the account’s holder will be kept by the bank’s management or personnel assigned for keeping such information. In this case the client’s name, address and other personal data will not be kept in the bank’s data base where it can be viewed and accessed by persons that are unauthorized to do so. In this way, the offshore banking service given to the client does not provide full anonymity but provides for even increased confidentiality and banking privacy.

The provision of anonymous offshore banking accounts was prohibited by the Financial Action Task Force (FATF), which is an international organisation that deals with regulating international banking institutions by enacting laws and standards by which such institutions should operate so as to eliminate and reduce the illegal banking activities. Banks internationally are also required to obey strict KYC (Know Your Client) rules whereby they should be able to identify their clients and be provided with valid identification documents before opening an account, whether offshore or onshore for people and organizations. This, however, does not signify that there is no privacy in offshore banking since the offshore banking in itself is established on strict secrecy laws that ensure that the information given to offshore banks by their clients is not divulged outside of the bank.

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