Banca Privada d’Andorra (BPA) Under Investigation For Money Laundering

Here’s another reason to have at least two bank accounts overseas: So you can move your money when one of them gets shut down.

Years ago I had an account with the local Panama operation of Stanford Bank. I woke up one day to find that Stanford Bank had been taken over by Panama’s Banking Superintendent.

The parent bank in Antigua was caught up in some scandal along with the bank founder. The Panama operation was a separate entity. To protect account holders in that Panama bank, the Panamanian government stepped in before the United States or Antigua could siphon off any assets to cover the transgressions of the parent company.

That was the fortunate aspect of the superintendent taking over the bank—my account was frozen before anyone could pilfer from it. The unfortunate aspect was that my account was frozen—for well over a year. We account holders did eventually get our money back (in full), and the bank eventually reopened with new capitalization and a new name.

Recently, I woke up to find that, while Banca Privada d’Andorra (BPA) hasn’t been shut down in Panama (yet), it is under investigation for helping launder money for Venezuelan officials. BPA has a Panama branch, but the parent bank is in Andorra, where the Institut Nacional Andorrà de Finances has suspended the board of directors as well as three top managers of the bank while an investigation is carried out.

The alleged money laundering scheme, which references Russian and Chinese organized crime along with the Venezuelan state oil company, Petróleos de Venezuela, is the kind of thing that gives offshore banking a bad name. Most people still think that the only reason to have an offshore bank account is to support some nefarious activity. It couldn’t possibly be that you’re simply looking for diversification options outside your home country. If you have an offshore bank account, it’s not because you’re trying to protect assets (from a frivolous lawsuit, for example, or an unhappy ex-spouse) but because you’re trying to hide them.

If having one offshore bank account means you’re up to something, then having two must mean you’re really operating on the dark side, right? No. All it means is that you’re careful and well diversified.

As I said, BPA hasn’t been shut down in Panama, and maybe it won’t be. But I’d bet I’m not the only account holder moving funds just to be safe. Stanford Bank burned me once. I’d rather avoid that scenario again. The thing is, to move money from one bank where you’re concerned it could be at risk means you must have an account with another bank.

Opening a bank account offshore is the first step to internationalizing your life. It’s the first step to protecting your assets. However, depending on the level of wealth you’re trying to protect, it’s not the final or the only step. If your assets support it, I recommend two accounts at two different banks.

The trouble is that investment (or private) banks generally have minimum account balance requirements starting at US$250,000, though minimums can be lower. Jyske Bank, for example, has a minimum of 100,000 euros.

One offshore banking option if you don’t have enough for an investment bank account could be a local commercial account in another country. Commercial bank accounts don’t offer the investment options and may not offer the currency options of an investment bank account, but they can allow you to move some of your money offshore, allowing you to realize diversification and asset protection objectives.

If you want to keep money in an offshore account in U.S. dollars, look to Belize or Panama. Belize has five international banks (that is, banks for non-Belizeans). All five have low minimum balance requirements (US$500 or US$1,000, depending on the bank). They all also offer investment banking services that you could grow into. In addition to U.S. dollars, these banks also allow you to hold euros, pounds sterling, and some other hard currencies.

Panama has more than 80 banks, the exact number depending on the day you count. Some (including BPA) are licensed for international clients only, but most have commercial as well as investment banking operations. It can be tricky opening a bank account in Panama. Banks here prefer to see some relationship with the country—that you own property, have a corporation, or have residency. That said, it can be possible to open an account in Panama without any relationship with the country… depending on the bank and the mood of the account manager the day you walk in the door.

It helps if you have a personal letter of reference from an existing client. Also note that, to open an account in Panama, you need to schedule a meeting at the bank to sign the documents and meet your new banker in person.

Today, the Panama banks I’d suggest trying include Balboa Bank, Multibank, and Banco General. Colleagues have all had success opening accounts at those banks recently. Ask me next month, and the list likely will be different. Banking in Panama is an always-moving target.

Belize and Panama aren’t the only two places where you could open an offshore bank account, of course, including if you don’t have US$250,000 to deposit. However, these are two of the easiest options today, especially for Americans. My advice would be to open at least one account in each country right now.

Lief Simon

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