Use of trusts and offshore companies by international criminals, those engaged in fraud and to defraud creditors: know your client.

1. Proper vetting procedures essential.

2. Beware money laundering legislation requiring thorough vetting of clients.

3. Beware of bearer shares: due diligence is not possible unless the adviser retains the bearer share certificates on safe deposit but if this is in Hong Kong there may be increased liability to estate duty.

Note: Bank of Nova Scotia saga which involved a claim by U.S. authorities for information from a Cayman company. When the information was not provided because of Cayman rules governing secrecy, the U.S. authorities fined the New York branch on a daily basis until the information was provided.