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Offshore Banking Reporting Requirements



Has anyone ever told you that if you do offshore banking and you wire more than $10,000 out of your country, you HAVE TO report it to your Government? THAT MAY NOT BE CORRECT !!! You need to check with the laws of your own country but the law states for U.S. citizens or residents (P.L. 91-508, 31 USC 5316) that they ONLY need to report the PHYSICAL TRANSPORATION of "currency or certain monetary instruments" in an amount which exceed $10,000. In other words: You may move all the money you want offshore, at any time, WITHOUT REPORTING IT TO ANYONE, if it is done through normal onshore or offshore banking procedures and if there is no physical transport in or out of the United States of "currency or certain monetary instruments."



You most likely know what "currency" is, but what is the definition of "certain monetary instruments" spoken about in that law? Both "certain monetary instruments" and "currency" are defined in law 1 CFR 103.11, as amended), and those definitions are given here. All of what is given below applies to U.S. citizens or residents who are interested in offshore banking or transporting currency out of the U.S., so you need to check the laws of your own country but many times they are enacted using U.S. law as the guide.




Definition of Currency



The currency and coin of any country, which are customarily used and circulate in that country and which are accepted as legal money in the country in which it is issued. It includes all U.S. notes, U.S. silver certificates, and Federal Reserve notes, but does not include negotiable instruments not customarily accepted as money nor does it include bank checks used in onshore or offshore banking.




Definition of Monetary Instruments



Currency or coin of any other country, money orders, travelers' checks, negotiable instruments (except warehouse receipts or bills of lading) in bearer form or otherwise in such form that title thereto passes upon delivery, investment securities in bearer form or otherwise in such form that title thereto passes upon delivery. The term includes travelers checks, bank checks, and money orders which are signed but on which the name of the payee has been omitted, but this does not include travelers' checks, bank checks used in onshore and offshore banking, or money orders which are made payable to the order of a person who is named but which have not been endorsed or those which bear on them restrictive endorsements.



If you will take note: the last part of the definition of "Monetary Instruments": clearly says: "does not include bank checks used in onshore and offshore banking, travelers' checks or money orders made payable to the order of a named person which have not been endorsed or which bear restrictive endorsements."



(By the way, the legal definition of a "person" includes any individual human person, and any legal entity such as a bank or a corporation.)




You Do Not Have to Report These



So... in the process of offshore banking if you write out a money order or a check which is payable to an offshore bank (which is a "person" under the law), even if it is an amount over $10,000, you ARE NOT REQUIRED BY LAW to "report" the transaction to anyone.



Or... if you have a money order or check which is made out to you, you can write a restrictive endorsement on the back of it -- i.e., "Pay To The Order Of: XYZ Bank" -- and you ARE NOT REQUIRED to report the transaction to anyone if you are doing offshore banking and send it to a bank outside the country you are resident in.




Reporting Your Offshore Banking Accounts



Even though you ARE NOT REQUIRED to report these transactions to anyone - you will still have to file a "Report of Foreign Bank and Financial Accounts". (Treasury Form 90.22.1) on or before June 30 each year if you doing offshore banking and have a foreign bank account or bank accounts where the combined value of all accounts was over $10,000 at any time during the last calendar year. BUT if you had 25 or more foreign accounts, you won't have to SPECIFICALLY REPORT where each account is or how much money you had in each account; unless the Treasury Department asks you for that specific information at a later date.




Update 2006



Because of the various "terrorist" acts initiated since 9/11/2001, there have been some changes and updatings in most of the regulations and rules pertaining to the movement of money worldwide. To get updated, you may want to do a google search for "P.L. 91-508, 31 USC 5316". Although we didn't discover any significant changes, there may be some new regulations and rules that you should be aware of. Also, the laws are always in flux and you should stay updated at all times in order to enjoy without violation the wonderful world of offshore travel and easy to follow offshore banking reporting requirements.





 

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