Today on the internet we see numerous entities selling Swedish Credit Unions. The presentation is obtain what is basically a bank inexpensively and operate it offshore using a Panama Financial Services Company which does not let you operate as a bank. Will this work, theoretically yes. Practically the Swedish Credit Union will break down when it comes to the correspondent bank. What is usually done is an ordinary bank account is opened with a bank that has correspondent banks. Please bear in mind the fees to open a correspondent bank account usually are in the $200,000 + range. When your Swedish Credit Union starts pumping through 40 or so wires a week the correspondent bank, the bank that you have is using, will think their customer bank is operating as a correspondent bank and find some excuse to cut them off if they do not drop your account. Remember they want people to pay $200,000 to have a correspondent bank. Having the wires go through a Panama Financial Services Company mitigates the situation some since the credit union name does not appear in the wires. If one were to say process 3 or 4 wires a week with say three or four checks and the wires and checks were all made out to the financial services company, not a credit union, the scenario would probably have a reasonably long life. Of course you now really don’t need the credit union.
Bank Secrecy – Missing altogether. The Swedish Credit Unions do not have bank secrecy since they are from Sweden which is not a privacy jurisdiction. The Swedish authorities do not have reportage requirement for these companies but rest assured they can conduct an audit or request and require books and records readily because these entities are subject to Swedish taxation at a rate of about 30%. If one failed to comply they could cancel your corporation or credit union if you wish to name it such, or worse even going after you personally for fraud, income tax evasion, etc. Not a comforting thought. I should say the Panama Financial Services Company bank account would be covered by bank secrecy in Panama. If the Swedish Government alleged that you were operating some sort of financial institution like a bank taking deposits and making loans in Panama through this Panama Financial Services Corporation along with a corporation named as a credit union in Sweden, the Panamanian authorities would think you were trying to evade buying a Bank License (expensive licenses) and shut you down. Would they turn records over to the Swedish? That would depend on the allegations and if there was criminal case on file in Sweden for money laundering. If such a case was in the Swedish Criminal Courts I think under the circumstances the records would likely be turned over. Panama would likely deem you to be operating beyond the scope of a Financial Services Company if the Swedish government was complaining about one of their credit union named corporations, I would not think the Panama Government would be standing up for your company.
Legal Structure – The name of this so called Swedish Credit Union is an EKONOMISK FÖRENING. It is an economic association actually and what the sellers of these structures do is name them as a credit union like; ABC Credit Union and sell them for inflated prices as a credit union just because the Swedes allow you to use credit union in the name, it is nothing like the American Credit Union. It is almost an oversight in the law that has been exploited.
Practical Applications – None that we know of. No bank is going to let you push a high volume of wires through the system. The wires will be a dead giveaway to the correspondent banks outside of Sweden and you will be cut off.
Suggestion – Forget this one. It is not really a scam, but it is not really a credit union per se either. It will not work in the banking system so drop this one.
For more information go to: http://www.panamalaw.org