Reputational Banking Risks through Offshore Transactions: Benefits of Neuro-Management

• Main Authors: Ciprian MANEA, Alina PARINCU
• Format: Article
• Language: English
• Published: Dunarea de Jos University of Galati 2018-12-01
• Series: Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics
• Online Access: http://www.eia.feaa.ugal.ro/images/eia/2018_3/ManeaParincu.pdf

Offshore companies are legal entities established and registered in countries other than those in which they operate, to benefit from tax incentives and / or to provide financial management or service activity. The purpose of establishing them is to ensure anonymity on the structure of shareholders and administrators and on the other hand to obtain tax incentives (dividends with a reduced tax rate, assignment of assets without VAT, etc.). This paper aims to reveal several case studies focused on the financial transactions of entities carried out through banks, which can be exposed to reputational risks if the transactions are illegal or are aimed at money laundering. In accordance with National Bank of Romania (NBR) regulation on the management framework for the activity of credit institutions, the banks should consider the risk they are directly exposed to when performing on behalf of clients activities in jurisdictions that reduce transparency, on the one hand, and the risk to which they are exposed indirectly when they provide certain services, such as providing a range of custody services, performing complex structured financial transactions on behalf of clients, on the other hand.