International business corporations (IBCs) are entities that are created in jurisdictions that offer low or no taxes, high confidentiality, and minimal regulation. They are often used by individuals and businesses to avoid or evade taxes, conceal assets, and launder money. Some of the risks associated with IBCs are:
They are created in a tax haven. Tax havens are countries or territories that have low or no taxes, lax financial regulation, and high secrecy. They attract IBCs that seek to reduce their tax liabilities, hide their beneficial owners, and evade scrutiny from authorities. Tax havens pose a risk to the global financial system, as they facilitate tax evasion, money laundering, corruption, and illicit financial flows12.
They are established with nominee directors. Nominee directors are individuals who act as the legal representatives of an IBC, but have no actual control or authority over its activities. They are often used to shield the true beneficial owners of the IBC from detection and accountability. Nominee directors pose a risk to the transparency and integrity of the IBC, as they can enable fraud, tax evasion, money laundering, and other criminal activities34.
[References:, 1, ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 38, 2, ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.3, Offshore Financial Centers, 3, ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 39, 4, ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.4, Money Laundering Using New Payment Methods, , , ]
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