Let us look at some of the laws this disappointing but often used jurisdiction has. But before we get into this more deeply let us point out that the capital, Belize City has one paved street 3 or 4 blocks long. You are in the third world here with numerous internet, power and telephone outages. Belize often gets hit by hurricanes. The stability of the regime in Belize is questionable since they had a regime change in recent years and the new regime did not honor economic citizenships and passports of the previous regime. Food for thought about how things operate in Belize. Additionally in Belize you are usually dealing with a bank that has an offshore only license not able to conduct business with residents of the country – not too reassuring is it? More details follow:
Belize Money Laundering (Prevention) Act, 1996 defines money laundering (way to broadly in our opinion) as:
Engaging, directly or indirectly, in a transaction that involves property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be the proceeds of crime; or receiving, possessing, managing, investing, concealing, disguising, disposing of or bringing into Belize any property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be the proceeds of crime. Under Belize’s legislation money laundering is also considered an offense for the purpose of any law relating to extradition or the rendition of fugitive offenders.
The legislation stipulates that anyone who engages or who attempts, aids, abets, counsels, or procures the commission of, or who conspires to commit the offense of money laundering is guilty of an offense. The above also includes such persons who at the time of the commission of an offense acted in an official capacity for or on behalf of a body of persons (either corporate or unincorporated) or purported to act in such capacity. However, if such persons provide evidence showing that the offense was committed without their knowledge, consent or connivance, charges may be dropped.
The penalty imposed on those convicted of money laundering can be in the form of a fine, ranging from US $12,500 to $50,000, or a term of imprisonment of 3-6 years, or a combination of both fine and imprisonment.
The Act also creates an offense of the divulging of facts or other information to another whereby an investigation is likely to be prejudiced (think tip off the subject of the investigation) by a person who knows or suspects that an investigation into money laundering has been, is being, or is about to be conducted, punishable by a fine of not more than US $25,000, or by imprisonment of not longer than 3 years, or by both. So don’t expect any Belize bank to tell you anyone is asking questions about your account.
The falsification, concealment, destruction or disposal of any document or material which is likely to be relevant to an investigation into money laundering or to any order made in accordance with the provisions of this Act is punishable by a fine of not more than US $50,000 or by imprisonment of not longer than 5 years, or both.
An application can be made to the Supreme Court of Belize to freeze the property of, or property in the possession or under the control of a person who has been charged or is about to be charged with a money laundering offense, wherever such property may be located, if the property is alleged to be the proceeds of crime, Do you think a Belize bank might like this to happen so they can sit on your money for years to come collecting the interest and paying no interest?
After a person has been convicted of a money laundering offense, the court may order that the property, proceeds or instrumentalities derived from or connected or related to such an offense be forfeited and disposed of in such manner as the Minister may direct. So if they say you did money laundering you lose your money. Sounds great doesn’t it.
However, all prosecutions, actions, suits or other proceedings brought for any offense, or for the recovery of any fines, penalties or forfeitures, need to be made within 5 years after the date the offense was committed or the cause of action accrued.
Reporting Requirements (It gets worse!)
Besides reporting “suspicious transactions” to the Central Bank of Belize, which is required by law, Belize financial institutions adhere to the “know your client” principle, and they also carry out the necessary due diligence exercises. This means the bank in Belize has to report you if they see something they consider in their great wisdom to be suspicious and remember if the money gets seized by the government it will probably sit in the bank for some years collecting interest for the bank. Think conflict of interest and remember money laundering is far from clearly defined in the law, it is overly broad in scope and can include whatever they want it to include.
The Act provides the following as examples of “suspicious transactions”: ‘complex, unusual or large business transactions, unusual patterns of transactions whether completed or not, all unusual transactions, and significant but periodic transactions, which have no apparent economic or lawful purpose.’ Sounds like it covers anything they want it to. What is meant by a complex transaction or a large transaction anyway?
If financial institutions or their employees, staff, directors, owners or other authorized representatives willfully fail to report such type of transactions or willfully make a false or falsified report on such matters they can be charged with a criminal offense. A financial penalty of not more than US $25,000 can be imposed, and the license of such financial institutions may also be suspended or revoked, if found liable.
The Central Bank of Belize evaluates all reports of “suspicious transactions” and upon concluding there are reasonable grounds that a money laundering offense is being, has been or is about to be committed, they will then refer such transactions to the law enforcement authorities for investigation and eventual prosecution. Notice it says if the Central Bank thinks a offense is about to be committed they can take a preemptive strike and grab your money just in case they think you intended to break the law someday but had not yet gotten around to it yet.
If there are reasonable grounds for believing that a contravention or breach of this Act may have occurred, the Central Bank also has the power to inspect any business transaction record, ask any questions relevant to such record, and make any notes or take any copies of the whole or part of such record during the normal working hours of the financial institution, and may pass on the information to the law enforcement authority. This means there are no private business records in Belize.
Belize is a member of the Caribbean Financial Action Task Force, an organization of Caribbean States who have joined forces “to develop and share the latest intelligence on money laundering and other financial crime techniques used in the Caribbean region and elsewhere.” This organization works closely with the world’s leading anti-money laundering authority, The Financial Action Task Force on Money Laundering, whose principles Belize also subscribes to.
The legislation makes provisions for the cooperation between the court or other competent authority of Belize and the court or other competent authority of another State on matters concerning money laundering offenses in accordance with Belize’s Money Laundering (Prevention) Act, 1996, and within the limits of the respective legal systems.
Belize is a party to the 1988 UN Drug Convention and is a member of the Organization of American States Inter-American Drug Abuse Control Commission (OAS/CICAD) Experts Group to Control Money Laundering. The United States and Belize signed a Mutual Legal Assistance Treaty (MLAT) in September 2000. Belize also has a Tax Treaty with the USA
Belize has Bearer Share Corporations but they are not anonymous like Panama and operate differently. Here again we see Belize laws full of loopholes to invade privacy freely. Registration for a company in Belize is through a registered agent, not a lawyer so forget about attorney client privilege. The registered agent does due diligence so they know the owner(s) of the corporation. The Belize Money Laundering Act and Code of Conduct in Belize requires this identification disclosure. Now here come the loopholes. The only document presented for public filing at the Registry of Corporations in Belize is the Memorandum and Articles of Incorporation. The Financial Intelligence Unit of Belize and the International Financial Services Commission of Belize are two organizations in Belize that have free access to the corporate records including ownership filed with the agent and they can get this information freely, no court order required and you will not know your so called confidential information was ever obtained by them and given to other countries who do who knows what with it. You are one small step removed from being in a public database and the door for widespread fishing expeditions is wide open.
In Panama there just plain and simple is no registry with any ownership records for a bearer share corporation, so no one can access something that does not exist. True the lawyer could be contacted who formed the corporation in Panama but this would require a serious court proceeding to violate attorney client privilege, with lots of cause and of course the attorney would be duty bound to oppose such a court order. Panama has 400,000 corporations registered there, most of which will quickly leave if the see the courts violate privacy. Each corporation pays $300 a year in tax, which totals $120,000,000 and this is for a country with 2.9 million people. The Panama Canal only nets Panama about $335,000,000 and requires 9,000 employees. How many people are required to run a corporate filing dept., maybe 200. Panama is a country very unlikely to violate corporate privacy. The lawyer in Panama may only have knowledge of the person who formed the company not knowledge of others he or she may have transferred the corporation to since formation. Such transfers need not be reported and the new owner(s) need not be on file anywhere they just need to have the shares of the corporation physically. The new owner(s) may reside outside of Panama, the new owners could be a corporation, foundation or trust in another country, etc. making any trails extremely difficult, time consuming, expensive and in general to most people not feasible to follow especially when you consider that no one really knows how many times the ownership may have been transferred.
Does this sound like a jurisdiction you would want to use for anything? We consider Belize as a simply ridiculous jurisdiction with no safeguards or protections in place, avoid this one.