Category Archives: Offshore

As the fishing boat motors gently out of Newlyns harbour, the sky is clear and the sea is millpond-flat. Below the surface, the clear waters are teeming with life; Newlyn, in south-west Cornwall, is home to one of Britains largest trawler fleets, with more than 100 boats regularly landing catches. However, miles out to sea, a storm is brewing.

The boats fishing ground could end up being squeezed by floating windfarms planned for the Celtic Sea, an area of the Atlantic bordered by Cornwall, south-west Wales, southern Ireland and the north-western edge of France. In July, the crown estate the Queens property manager and owner of the seabed around England, Wales and Northern Ireland announced that five sites in the Celtic Sea could host offshore installations that could deliver four gigawatts of wind energy by 2035. Up to 300 turbines would power nearly 4m homes, and generate income for the crown and the Treasury.

An auction last year of other plots off England and Wales saw unprecedented interest from energy companies, driving bids to record levels, with the crown estate set to receive up to 9bn over the next decade. Those zones are expected to house six new windfarms, generating enough electricity for 7m homes, and could be an essential step in the drive to decarbonise the UKs power system.

The plans are the talk of the port in Newlyn, and are being met with trepidation in Britains shrinking domestic fishing industry.

In the chilly halls of the towns seafood market, fishers such as Chris Nowell, bearing a box of line-caught sea bass and pollock, arrive throughout the day with their silvery catch, which is assessed, weighed and packed in ice. More than 50 species pass through the market, from megrim (also known as Cornish sole) and red gurnard to mackerel and ray. Worth about 20m a year, they are destined for local dining tables and restaurants in the UK and abroad.

The man responsible for running the market is Paul Trebilcock, managing director of W Stevenson & Sons, whose fleet has fished out of Newlyn for over 100 years. His main feeling about the windfarm proposals is apprehension, he says from his market office.

In recent decades, fishers have seen no-go zones proliferate, including marine protected areas, power cabling sites, and oil and gas installations. At a time when many remain bitter about the absence of the Brexit benefits they were promised, fishers say they are facing a spatial squeeze, with more boats competing to fish in ever-smaller areas.

When you layer these things on top of each other, it gets quite scary, Trebilcock says. If youre trying to harvest fish in the sea and the areas you go to are taken away one by one, it feels like death by a thousand cuts.

Although Trebilcock and other Newlyn fishers are at pains to point out that they are not opposed to offshore wind, they feel bottom of the list in decisions over the use of Britains waters.

Stevenson employs about 40 people on shore at Newlyn, and a further 50 at sea, but warnings about the impact of offshore wind are stark.

Some of the search areas being looked at are enough for us to consider the viability of some boats, Trebilcock says. The north coast of Cornwall is a valuable Dover sole fishery and some areas being looked at would effectively take that out of the equation. The consequence could be catastrophic for our fleet.

Trebilcocks fears are shared by James Chown, skipper and owner of the 18.5-metre Ajax. He is checking his nets and filling up with fuel and ice before heading back out to sea.

Ajax is one of Newlyns bigger boats, and Chown Chunky as the 50-year-old is known and his five-strong crew usually spend every other week at sea, hunting hake and pollock. As some trips take him more than 50 miles from shore, he is likely to be among those hit hardest by the proposed windfarm sites.

Because they will be in deep water, the Celtic Sea turbines will sit on floating concrete and steel platforms anchored by cables to the seabed.

The fishing industry normally adapts to whatever it has to, Chown says tattoos depicting a sailing ship, the coat of arms of Padstow, his home town, and Cornish and English flags visible below his T-shirt sleeves. But my concern is that you can only adapt if youve got room to adapt.

A further squeeze on fishing grounds will result in more displacement, crews say, with boats forced into areas regularly fished by others, be they British crews or boats from France, Belgium and Spain.

We are certainly not anti-renewables, says Chris Ranford, chief executive of the Cornish Fish Producers Organisation, which represents boat owners. They simply want recognition for their centuries-old role in feeding the UK, plus a say in where offshore wind is located.

We understand the priority, Ranford added. What we are asking for is simply a coexistence strategy, where you recognise food security as much as energy security.

Cornwalls fishing crews are disgruntled at what they see as a lack of early involvement in the crown estates process of identifying areas where floating wind could be located.

We only found out about this in mid-July along with the rest of the public, Ranford says. We knew it was going to happen, but we didnt have any idea where the sites were going to be.

Development may not stop there: the crown estate says its research shows the Celtic Sea has potential for up to 20GW of additional offshore wind capacity by 2045.

Fishing organisations complain that fishing is not regarded as a hard constraint when working out where to locate windfarms. The crown estate disputes this, saying it is committed to working with stakeholders, including the fishing industry, in developing its proposals. It said it had given fisheries data the highest possible weighting when identifying areas of search in the Celtic Sea, to avoid heavily fished grounds.

Huub den Rooijen, managing director for marine at the crown estate, says: We fully recognise the importance and value of the fishing sector in the Celtic Sea, and have engaged throughout with key bodies such as the National Federation of Fishermens Organisations and the Welsh Fishermens Association. But the estate has to balance competing needs for seabed space, he says, adding: We will continue to engage with the fishing sector to gain a further understanding of their activity.

Domestic fishing represents less than 1% of the UKs national economic output, but it is part of the lifeblood of small coastal communities from Cornwall to northern Scotland. About 24,000 people work in fishing and processing, contributing 1.4bn a year to the economy, according to the National Federation of Fishermens Organisations.

At the harbour, Will Treneer is unloading a catch of deep blue lobsters, their claws bound by rubber bands. Born and bred in Newlyn, the 33-year-old followed his father and uncle into fishing in his teens. His own five-year-old son asks each morning how the catch went overnight.

Offshore wind is coming, whether we like it or not, and we should probably embrace it, Treneer says. But the fishing industry is going to look a lot different.

View original post here:

Offshore wind could blow us out of the water, say Cornish fishers - The Guardian

ST. PETE, Fla (WFLA) If you want to be out near the water this Labor Day weekend, make sure to check out the P1 Offshore Grand Prix in St. Pete.

More than 60 teams traveled from all around the world to compete in the powerboat races that have been known to attract large crowds.

During the three-day event, powerboat racers from New Zealand, Canada, Australia, and even Italy will compete for positions Saturday before a full day of racing on Sunday.

World Champion Powerboat Racer Steve Curtis is scheduled to attend. He said his interest in powerboat racing sparked during his childhood while he watched his father build boats.

Young kids, when they come up and they see these things, they cant believe how big they are, they go wow,' Curtis said. We can show them in the cock pit and show them around. Its great to see their reactions, it would be nice to think that someday those guys may be racing as well.

This year, a fan village is opening up to the public at the St. Pete Pier for free with food trucks, vendors, and music.

Its all about bringing entertainment and fun for everyone, especially for local businesses and communities generating that economic impact, P1 Offshore Director Cole McGowan said.

The second annual P1 Offshore St. Pete Grand Prix runs from Friday through Sunday.

Friday is when the Race Pits are open from 9 a.m. to 8 p.m. Saturday runs from 9 a.m. to 5 p.m., and Sunday from 9 a.m. to 7:30 p.m.

For information regarding the full schedule and VIP tickets, check out the event website.

More here:

P1 Offshore St. Pete Grand Prix powerboat races to kick off this weekend - WFLA

One of the turbines at the Hornsea 2 offshore wind farm. According to Danish energy firm Orsted, the facility has a capacity of more than 1.3 gigawatts.

Orsted

A facility described by Danish energy firm Orsted as the "world's biggest offshore wind farm" is now fully operational, with its 165 turbines set to help power in excess of 1.4 million U.K. homes.

Situated roughly 89 kilometers (approximately 55 miles) off the coast of Yorkshire, England, the scale of Hornsea 2 is considerable.

According to Orsted, it has a capacity of more than 1.3 gigawatts and stretches across an area of 462 square kilometers more than half the size of New York City. Hornsea 2, it added, uses Siemens Gamesa turbines with blades measuring 81 meters, or more than 265 feet.

"One revolution of the wind turbine blades can power an average UK home for 24 hours," the company says.

It is the latest step forward for the Hornsea 2 project, which generated its first power in Dec. 2021.

The development comes as European countries attempt to wean themselves off Russian fossil fuels, including gas, following the Kremlin's invasion of Ukraine in February.

"Current global events highlight more than ever the importance of landmark renewable energy projects like Hornsea 2, helping the UK increase the security and resilience of its energy supply and drive down costs for consumers by reducing dependence on expensive fossil fuels," said Duncan Clark, head of the U.K. region at Orsted.

The U.K. is home to a mature offshore wind sector that looks set to expand in the coming years, with authorities aiming for up to 50 GW of capacity by 2030.

The European Union, which the U.K. left in January 2020, has previously laid out a 300 GW target for offshore wind by the middle of this century.

Across the Atlantic, the U.S. has a long way to go to catch up with Europe. America's first offshore wind facility, the 30 megawatt Block Island Wind Farm, only started commercial operations in late 2016.

Change is coming, however, and in Nov. 2021 ground was broken on a project dubbed the United States' "first commercial scale offshore wind farm."

Continue reading here:

The world's biggest offshore wind farm is now fully operational - CNBC

Introduction

My name is Matthias Bausenwein.

I lead bps offshore wind business.

This is just week three for me in the job.

Im new to bp so, I dont have all the answers.

Thats one dont in this session on dos and donts.

There are, however, a few things I do already know.

I do know how serious weat bpare about our trajectory towards net zero and about offshore wind.

How positive our people are about its role in the energy system and how determined we are to make a success of it.

I do also know the fantastic potential bp sees in the Norwegian North Sea and the ambition of this great nation to maximise this potential.

Thats why I simply had to be here today. Thank you for the invitation.

There is something else I do know.

When you think of offshore wind you probably dont think of bp. Not yet.

With us, you may think of oil and gas. Much like Norway and the North Sea.But were changing, like Norway is, by providing the world with the hydrocarbons it needs with lower emissions and at the same time, helping the world transition.

Our relationship with this great country goes back a century to the 1920s.

But the world is a very different place now, of course.A confluence of events.

Russias act of aggression in Ukraine, first and foremost, the post-pandemic bounce back and extreme weather have all destabilised the energy system.

So, more than ever, the world needs three things.

bp wants to play its part in solving the trilemma so, we are reimagining energy and reinventing our company to play that part.

We are transitioning from an international oil company an IOC, one traditionally focused on the production of resources to an integrated energy company an IEC,that delivers a variety of solutions for customers.

To us, integration means providing a mix of energies.Resilient and focused hydrocarbons, renewables, hydrogen, and so on.

And it means knitting together different forms of energy too.Ill explain more about that in a moment.

Going big on offshore wind is key to our plans as an IEC.

In just 2 years weve gone from a pipeline of zero to more than 10GW, working with our partners.

Thats enough to power a city the size of Stavanger 30 times over.

Its true that we dont have a big history in offshore wind and we dont underestimate the specifics of offshore wind environments.Thats two donts.

We do have something else though.We can of course leverage bags of experience executing large civil engineering projects safely, to time and on budget.

We do know how to work in challenging offshore environments, how to put together complex supply chains, work closely with local partners and governments and operate sustainably within communities.

Not just in a handful of locations but all around the world day in day out,365 days of the year.

But at the same time, we are conscious that we need to go the extra mile to set ourselves up for success in offshore wind.This is why we are building a strong team and are recruiting offshore wind talent to further strengthen the team.

Where needed we work with strong partners, like here in Norway.

After all, it is here where some of the best opportunities for offshore wind can be found.

You have an ambitious government committed to low carbon energy.The country is a great place to do business and is therefore an attractive destination for investment.

And then you have fantastic companies like our partner Aker Offshore Wind.

And its great to have Stephen Bull from the wider Aker family here on the panel.

And Statkraft.

These are two cornerstones of Norwegian energy production over many decades both with a long track record of success.

Thats why were especially excited about the potential for the Srlige Nordsj II project.

To work with Aker Offshore Wind and Statkraft on this.

Srlige Nordsj II offers so much potential.

It has:

Its so perfectly located that it could be the very centre of the North Sea wind build-out.It will supply energy to Norway and, over time, to nearby markets as well.

Thats what bp, and the consortium can help bring to fruition.

But theres something else too.

Offshore wind can catalyse integrated energy systems working in tandem with other energy sources.Therefore, providing more solutions for customers.

All in service of helping to provide the secure, affordable and low carbon energy they need.

This is something that plays into bps strengths.Something bp is already doing.

Our successful bid with EnBW earlier this year is a case in point.Together we are building a huge offshore wind project off the coast of Scotland, but thats just one part of the story.

Connected to this we plan to expand electric vehicle charging in the country and produce green hydrogen too.

Creating many jobs in the process and these are jobs in high demand.

We recently advertised 200 new UK roles in offshore wind but also in hydrogen.More than 10,000 people applied for them.Many of those people were oil and gas workers.

See the original post here:

From oil and gas to offshore wind and beyond | News and insights | Home - BP

If youre buying a property in Central America to grow your nest egg through rental income, youll want some pointers on how to handle this well. Luigi Wewege from Belizes Caye International Bank talks you through some simple pointers on making your offshore investment work better for you.

You may have decided to invest in offshore properties as part of your long-range financial goals. The plan may be to buy a house and rent it out for now, with the aim of making it your new home after retirement. In the meantime, renting the property will help pay the bills and allow you to build equity. Or you could be buying something in a popular tourist spot to turn into a vacation rental asset.

To simplify your propertys management, its a good idea to address several basics. Doing so will mean that offshore property doesnt go neglected even if youre rarely in the country. Here are a few tips that will help.

Since youre not living there, having a professional who can look after your investment makes sense. Look around and find a property manager with boots on the ground, close enough to physically visit the property. The goal is to have someone there to ensure the investment receives the attention needed to keep it in top shape.

Property managers can do quite a bit on your behalf. Along with screening people who want to use the property for short or extended stays, they can be the point person for any repairs or upkeep needed. The manager also serves as a local point of contact for your clients.

At the same time, the property manager ensures you know whats happening with the property. See this as one of the best ways always to have eyes and ears close enough to take action on your behalf.

Speak to local real estate agents to find someone many of them will offer property management services themselves.

The regulations and laws for renting out residential or commercial property may differ from your home country. In fact, some regulations may vary from city to city within that nation. Instead of making assumptions, its in your best interests to become acquainted with those laws and regulations. Specifically, you want to know your obligations as an offshore property owner.

Your goal is to ensure that any actions you take with the offshore property are in full compliance with local laws. From safety measures and landscaping regulations to ensuring utilities remain connected, even when no one is living there, know whats required.

Knowledge will help you avoid fines and other complications. It will also go a long way toward keeping the property in good shape.

Since the plan is to rent the property until you need it, decide what qualifications prospective clients must meet early on. To some extent, local laws and regulations will come into play. There will also be plenty of room for you to add your qualifications.

For example, its possible in many offshore locations to specify that no one may smoke inside the home. There may also be pet guidelines, specifications about who is to maintain the landscape, and more. You may also require anyone renting the property for an extended time to provide a deposit in advance, with the remainder due at the end of the stay.

Talk with the local property manager if youre unsure what to include. A professional who manages similar properties for other clients can provide suggestions for you.

While you could manage the bills associated with the property using bank accounts in your home country, theres a better solution. Open offshore bank accounts in the same country as your property. Youll find this is helpful in more ways than one.

One of those ways has to do with ensuring theres an offshore checking account to receive payments from clients. You can also use that account to make mortgage payments, pay the utilities, and manage tax payments on the property. If you like, have a time deposit or other savings account set up as well.

Establishing these offshore accounts allows you to keep everything to do with the offshore investment property separate from domestic obligations. And in the same way as your domestic accounts, you can see your balances at a glance. Thanks to this, you can stay on top of how well your investment is paying off.

Its tempting to buy property insurance and never look at it again. Thats not what you want to do. Instead, make sure to take a fresh look at the insurance provisions when the time for coverage renewal is near.

Determine if anything has changed since the current term began. Maybe you made improvements to the property, and the market value is up. Does the policy still provide enough coverage? If so, then renew for another term. Should the coverage be inadequate now, theres time to talk with an agent and increase the benefits before the next term commences. Doing so will mean you are always covered if damage should occur.

In the same way as the laws and regulations related to offshore investors owning property may vary from one jurisdiction to the next, the same is true with taxes. You want to remain aware of what, if any, taxes you owe on the property and how to calculate them. This helps eliminate the accrual of late fees and other penalties that could consume much of the propertys income.

Your property manager can provide some support with understanding how the tax laws apply. You can also use advice from a financial manager with the offshore bank where you established accounts. Between the two, it will be easier to project what taxes you need to pay and when they are due.

Since the plan is to rent out the property until the day you want to live there, there must be a way to find tenants. That may be people who want a place to stay while they vacation for a couple of weeks, or it could be someone who wants a long-term lease. While your property manager can handle the screening and ensure local people know when the property is available, setting up social media accounts will help.

Social media can be particularly effective when you prefer to rent out the property for short stays. Its easy enough to create social media accounts to include property descriptions, images, information about the surrounding area, and contact information for you and the property manager.

Use multiple accounts to increase your reach Facebook and Instagram are the best for creating pages for your property. Set up a Linktree account to bundle all the accounts, sites, and contact details related to your property together.

Belize is a very popular location for investing in offshore property and expat retirement. Whether you want some luxury island property on the waters edge, a rainforest retreat, or a bungalow in a beach community, Belize has plenty to offer.

Caye International Bank on Ambergris Caye, Belize offers many different account types for offshore investors. They will happy to help you understand the investment property mortgage options available in Belize.

If youre buying in Belize, theyre equipped to help you understand how your new offshore investment property can become one of your key international assets.

Luigi Wewege is the President of Caye International Bank, headquartered on the island of Ambergris Caye, Belize. He is also the published author ofThe Digital Banking Revolution,now in its third edition.

See more here:

Seven Tips to Successfully Managing Your Offshore Investment Property - CentralAmerica

Its called the Carolina Long Bay wind energy area.

It covers 110,091 acres of ocean, roughly 15 miles offshore from Brunswick County. The entire area sits roughly straight out from the North Carolina-South Carolina border.

And it appears North Carolinas largest electric utility and a French oil company won the auction on Wednesday, May 11, to lease a pair of sites wind energy production.

The Department of the Interior says TotalEnergies Renewables USA, LLC bid $160 million to win the right to build an offshore wind farm in the westernmost 54,937 acre section of the area. Duke Energy Renewables Wind, LLC won the bid for the easternmost 55,124 acre area, with a $155 million bid.

The Bureau of Ocean Energy Management says the area together, if developed, could generate 1.3 gigawatts or more of energy, enough to power nearly 500,000 homes.

Investments from the two developers mean increased supply chain investment and recruitment, workforce development and thousands of good-paying jobs and infrastructure development that will support other North Carolina industries," said Katharine Kollins, President of the Southeastern Wind Coalition, in a statement.

Federal officials called the auction a significant step towards the Biden-Harris administrations goal of deploying 30 gigawatts of offshore wind energy by 2030.

The Biden-Harris administration is moving forward at the pace and scale required to help achieve the Presidents goals to make offshore wind energy a reality for the United States, said Interior Secretary Deb Haaland in the announcement of the sale. Todays sale is further proof that there is a strong industry interest and that Americas clean energy transition is here.

North Carolina Governor Roy Cooper has set targets of 2.8 gigawatts of wind energy generated off of the NC coast by 2030 and 8 gigawatts by 2040.

If developed, the newest proposed offshore wind farm would not be visible from shore.

Duke Energy officials estimate it will take about 10 years to develop the site. A site assessment plan, looking at how Duke will evaluate the wind energy potential of the area, will be developed during the next year.

TotalEnergies, the French energy company that won the other lease, reports it is considering developing floating wind energy platforms. The firm is building similar offshore wind farms in France, the United Kingdom, and in South Korea.

TotalEnergies is also building an offshore wind project off of the New York-New Jersey coast.

Back in 2017, the wind energy company Avangrid paid $9 million for a lease off of Kitty Hawk. It is expected to begin operations by the end of the decade.

Read more here:

More Offshore Wind Power Coming to the Carolinas' Coast - PBS North Carolina

By The New Pelican Newspaper | on September 02, 2022

By RJ Boyle | Contributing Columnist

Pictured here is the Riley party from South Carolina, with a spectacular catch aboard the Lisa B from a few days back. Our goal was to land a swordfish. We set up shop about 16 miles offshore at 8:30 in the morning. We fished for an hour before getting our first bite.

We hooked the swordfish on a rigged bonito strip with a glow skirt. We fought the fish for 45 minutes before landing everyones first swordfish. As we put the baits out redeploying on our second drift, we got covered up in mahi mahi. We threw spinning rods tipped with bait and one by one began to fill the box. It sure is nice when a plan comes together. When we got to the dock, we cleaned the fish for well over an hour and a half. Everybody went home with plenty of dinners for the next month.

The near shore fishing was a bit slow this week. A few smaller Wahoo and lots of bonito were landed. If youre going to spend time fishing this weekend, I would suggest running offshore to look for mahi. There is a lot of scattered seaweed right now so dont be afraid to pull up on the patches and throw a few live baits to prospect. You can also troll around them quickly to see if the patch is holding fish.

Get tight!

RJ Boyle is the owner of RJ Boyle Studios in Lighthouse Point and has decades of experience fishing the waters off South Florida and beyond. To contact him at his studio or to inquire about his charter boats, visit rjboylestudio.com or call 954-420-5001.

More here:

Fishing Report: The offshore bite is red hot - New Pelican Newspaper

A South African court has upheld a ban imposed on the energy giant Shell from using seismic waves to explore for oil and gas off the Indian Ocean coast.

The judgment delivered in Makhanda on Thursday marks a monumental victory for environmentalists concerned about the impact the exploration would have on whales and other marine life.

The 2014 decision granting the right for the exploration of oil and gas in the Transkei and Algoa exploration areas is reviewed and set aside, the high court ruled in the southern city.

Civil rights organisations and civilians celebrated outside the courthouse following the verdict, according to local media.

A Shell spokesperson said the company respect[s] the courts decision and would review the judgment to determine our next steps. Shell did not say if it would appeal against the judgment or not. We remain committed to South Africa and our role in the just energy transition, he said.

Last December the same court had issued an interim order prohibiting the firm from going ahead with its plans.

Green Connection, one of the environmental and human rights organisations that filed the case against Shell, said that civil society, traditional communities and small-scale [fishermen] have once again been vindicated by the courts.

The petroleum firm was set to collect 3D seismic data over more than 6,000 sq km (2,300 sq miles) of ocean off South Africas Wild Coast - a 300km (185-mile) stretch of rich waters housing exquisite marine life and natural reserves.

Campaigners argued the research would have sent extremely loud shock waves every 10 seconds, 24 hours a day for five months, potentially harming marine species and disrupting their routines.

South Africas energy ministry had backed the scheme, and criticised those who opposed it as thwarting investment in the countrys development.

Read the original here:

South African court bans offshore oil and gas exploration by Shell - The Guardian

Norwegian Ministry of Petroleum and Energy has awarded Vista Analyse, Guidehouse, and Procurex the contract for the provision of consultancy services for the offshore wind tender the Norwegian Government will soon open for the Southern North Sea II (Srlige Nordsj II) area.

The contract, concluded on 24 August, follows the tender that the Ministry opened at the end of May ahead of auctioning off the first 1.5 GW of the total of 3 GW of offshore wind capacity to be awarded for development.

Led by Vista Analyse, the companies will assist with designing the auction model for Southern North Sea II, and with carrying out the actual auction for the first phase of Southern North Sea II.

Professionally, this is a challenging assignment. But we are confident that we have put together a team that can solve the task. Together with our partners in Germany and the US, we have both knowledge of specific Norwegian considerations and practical experience from offshore wind auctions in many countries, said Haakon Vennemo, the project manager and CEO at Vista Analyse.

The Ministry of Petroleum and Energy will announce the auction for the first 1,500 MW in Southern North Sea II during the first quarter of next year, with allocation scheduled for the summer of 2023.

The project/s selected in the first phase will not be interconnected to the grids of other countries and will deliver all of the generated electricity to the Norwegian grid, while those selected in the second auction will have the option to export the generated electricity outside Norway.

According to earlier information on the offshore wind area, the first turbines in Southern North Sea II could be installed in the second half of this decade.

Follow offshoreWIND.biz on:

Read more:

Three Consultancies to Help Set Up Norway's Upcoming Offshore Wind Auction - Offshore WIND

The death of billionaire Robert Brockman has once again brought so-called offshore tax loopholes to the spotlight. Brockman died earlier this month while preparing to stand trial in whats the largest tax-evasion case against an individual in history. In 2020, the Internal Revenue Service charged Brockman with hiding more than $2 billion in income in a complex, decades-long scheme using overseas accounts, foreign trusts and shell companies.

A new report released by the Senate Finance Committee, led by Ron Wyden (D-Ore), highlights one particular offshore loophole being used by wealthy Americans to hide billions in income. The committee zeroed in on the loophole, the shell bank loophole, following its investigation of Brockman.

Shell Bank Loophole Exposed

The 2010 Foreign Account Tax Compliance Act (FATCA) was designed to crack down on offshore tax evasion, requiring foreign financial institutions to determine if certain accounts are held by U.S. citizens (and report it back to U.S. authorities). The report finds, however, that wealthy individuals, with their savvy tax planners and advisors, can circumvent the requirements using a scheme thats hindering the laws effectiveness. The scheme, as revealed by the Brockman investigation, involves dressing up shell companies as financial institutions.Banks are free of the legal responsibility of determining if certain accounts are held by U.S. citizens if the accounts are held by entities that are themselves financial institutions.

The report also found that obtaining global intermediary identification numbers(GIIN), the numbers assigned by the FATCA registration system to foreign financial institutions, is shockingly easy, with online or paper forms almost always approved without any meaningful due diligenceessentially allowing individuals to self-certify these types of accounts as legal entities and creating ample opportunities for wealthy taxpayers to withhold the reporting of vast amounts of income being held by the accounts.

In the case of Brockman, the banks stated that so long as they can identify the entitys GIIN number on an IRS published list of registered foreign financial institutions, under FATCA they are not required to affirmatively investigate whether accounts are owned or controlled by any U.S. persons or report those accounts to the IRS. This loophole allowed Brockman to funnel large sums of money to banks in Switzerland via wire transfers from the United States without triggering the reporting requirement. The report further highlights the difficulty of detecting the hidden beneficial ownership in offshore bank accounts belonging to wealthy U.S. taxpayers if its layered using shell companies with valid GIIN numbers.

The Tactic Runs Deep

The committee report further found that there are 84,000 entities with GIIN in the Cayman Islands alone, and likely thousands and thousands more of these shell companies disguised as financial institutions overseas that are potentially evading IRS scrutiny and taxation. In addition to tax evasion, theres also a threat of money laundering.

Offshore tax evasion poses a unique challenge because the IRSauthority to compel action by financial institutions or take enforcement action is largely limited by the territorial extent of U.S. tax laws, the report states. The report further calls for Congress and agencies to take additional steps to increase IRS resources to close these loopholes. The recently passed Inflation Reduction Act outlines $80 billion in IRS funding for the understaffed agency, which will hopefully help with this task.

Read more here:

Senate Committee on Finance Investigation Finds Offshore Account Reporting Loophole - Wealth Management