CRS and Automatic exchange of information
Today we are talking about the advantage that Montenegro currently has that attracts people to come and bank here. What we mean here is automatic exchange of information and common reporting standards. Well, those will not be your issues if you are here.
In 2009. bank secrecy around the world started to go down as the USA broke the EBS, in 2011. they broke Credit Swiss and later they broke the entire Swiss banking system. Same happened to lots of places that had bank secrecy before – Andorra, Lebanon, Belgium, Austria, etc.
USA also brought in FATCA, which made every foreign bank a tax agent for IRS. This forced all the banks to report information about the US citizens abroad to the IRS automatically.
Before this, it was way more complicated for the IRS. They would need to have agreements with the foreign countries about exchange of information. After that they would need to suspect something about the US citizen that has a foreign bank account, and to request information about that individual.
FATCA really changed the game.
In 2017. OECD brought in Common reporting standards and Automatic exchange of information. This was basically FATCA for the rest of the world.
Ironically, the US is one of the few countries that didn’t sign to this.
So, in practice every year these countries through their banks report back to the home countries of these foreigners that have bank accounts abroad. They report the fact that you have a bank account abroad, the balance, etc.
Of course all of this makes hiding money abroad much much harder.
Some people want to continue to have their privacy and are wondering where to go in order to get it.
The truth is that almost every country where you’d want to keep your money is a part of this standard.
The USA could be one of the places to go, but you’d need to look at these regulations closer depending on your home country.
It is likely that with time all these countries will need to sign on to it. Montenegro is aiming to be the part of the EU so in 5-10 years they will probably need to comply and sign this agreement. Georgia will probably start participating in the next few years. Soon this will become the global standard and the banks that refuse to collaborate will simply be shut down.
If you still want to avoid it, al least temporarily we would recommend taking advantage of banking in Montenegro.