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agents in Europe who ran them through foreign banks and then into corporate accounts in a New York bank. After the shares were sold, money was transferred from New York to Swiss banks, which then transferred it to accounts in the Isle of Man. About $200 million was in there, but another $10 million of Poyiadjis’s funds turned up in a Guernsey account. The money would probably have remained


in the Isle of Man and Guernsey, untraceable by US authorities. But a smart regulator on the Isle of Man noticed Poyiadjis was being investigated by the US Securities and Exchange Commission and shopped him. By the time the SEC reached Guernsey, regulators there had already frozen the $10 million.


Untangling the web This highlights another important part of FATCA. The law attempts to unravel chains of corporations, trusts and other entities that are sometimes used to protect the identities of beneficial owners of offshore accounts, according to Heather Lowe, Legal Counsel and Director of Government Affairs at Global Financial Integrity, a research organisation funded by the Ford Foundation and the Norwegian government. Financial institutions will be obliged


to report details of any US people who ‘directly or indirectly’ own 10 per cent or more of an entity that has an offshore account, she explains. For example, take a Swiss bank account.


The owner of that account might be a Luxembourg entity, and the owner of that may


If institutions can’t prove to the IRS that they have no US clients, payments from American sources will be slapped with a 30 per cent withholding tax


June/July 2010 businesslife.je 29 ➔


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