St. Helena and a Nonexistent State

St. Helena, the British island in the Atlantic Narrows where Napoleon was confined, is not well known as a centre for dubious financial activities, unlike many other bits of residual empire (the Caymans, Gibraltar, Turks & Caicos, British Virgin Islands etc). This appears to be changing. A website has appeared advertising something called safeholder.com, which claims to offer

a new offshore banking program under the auspices of the Serbian Republic of Krajina (RSK), which is the internationally recognized government of Krajina and Slavonia. The banking licenses are offered to corporations and citizens resident anywhere in the world except the Republic of Serbia & Montenegro and the Republic of Srpska. The license permits operation of all banking and related financial services worldwide except in the aforementioned countries and subject to the laws and public policies of other states. Where no law on the matter exists or there is no conflict, the banking program of the RSK would be applicable according to international law authorities.

There is one immediately obvious problem with this story. The RSK does not exist. It was the self-proclaimed government, between 1992 and 1995, of the tranche of Croatia occupied by Serbian forces during the civil war. In 1995, the Croatian army retook the areas it supposedly governed, expelling much of the population and landing several of its own leaders before the Hague Tribunal. Either the RSK's banking code exists in some curious fashion, floating above the false world of being like Mohammed's coffin, and permitting anyone canny enough to engage Safeholder.com's services to escape more earthly jurisdictions, or else it is unenforceable and anyone who invested money in such a bank will never see it again. Whichever one of these options is pursued, it don't look good.

What kind of banking legislation the RSK might have elaborated in its brief flicker of existence can perhaps be guessed. In fact it's stated. Safeholder compares itself favourably to a variety of well-known extreme tax havens - Nauru, Niue and Montserrat, for example - for speed of establishment, confidentiality and easy terms. Anyone with US$5000 can hope to establish a bank with them within 10 days, with the following capabilities:

Engage in Private & Internet Banking

Take deposits and make loans worldwide

Offer payment services and transfer funds

Issue payment tools such as credit cards and checks

Issue bank guarantees

Issue letters of credit and other financial instruments

Issue bank references

Open correspondent bank accounts

Offer complex financial transactions

I think they must have forgotten "bilk clients" and "launder money". After all, they also claim you might want to set up a casino!

The fact that the licence is said (more than once) to exclude the countries - Serbia and the Republika Srpska in Bosnia - that would appear to be the RSK's successor states should tell us enough about their governments' opinion of this scheme. Fascinatingly, the website includes a nice picture of an RSK banknote.



It really ought to be a nine-bob note, but it's certainly just as dodgy. The folk responsible for this are one Mike Olsson, a Swedish citizen, and one Mirko Miskovic...and one Jonathan Levy. This is the WHOIS record for safeholder.com:

Domain Name: safeholder.com

Registrant Contact:
Safeholder, Ltd. safeholder@gmail.com
Safeholder Ltd
Association Hall
Main Street
Jamestown, SH STHL 1ZZ
SH
+1.2902660

Administrative Contact:
Safeholder, Ltd. safeholder@gmail.com
Safeholder Ltd
Association Hall
Main Street
Jamestown, SH STHL 1ZZ
SH
+1.2902660

Technical Contact:
Safeholder, Ltd. safeholder@gmail.com
Safeholder Ltd
Association Hall
Main Street
Jamestown, SH STHL 1ZZ
SH
+1.2902660

Billing Contact:
Jon Levy jonlevy@hargray.com
Jon Levy
37 Royal Pointe Dr.
Hilton Head Island, SC 29926
US
+1.5132840011

Record created on 2004-03-09 07:30:56.
Record expires on 2007-03-09 07:30:56.

Strangely enough, someone of the same name registered cabindapetroleum.com, which claims to be the only licenced gas and oil exploration company in the Republic of Cabinda, based in Jamestown, St. Helena. Cabinda, my well-informed readers will no doubt be aware, is a small exclave of Angola north of the Congo River which contains much of Angola's oil reserves. It is not a republic, and is something like a joint venture between the Angolan government and ChevronTexaco, who are extracting the oil. Unlike Mr. Levy's organisation, which is extracting the urine. After all, there is no reasonable prospect that they will ever be in a position to explore for oil there - and much as I dislike and distrust the Angolan government and their oil pals, I would rather not see anyone lose their savings in this venture.

It could be worse. Cash invested in such a thing is likely to go missing, but where would it go? There's only been one effort to work out what all this means, before this post, which was by the St.Helena Herald. At this (pdf) link, you can read a long interview with Olsson by a local reporter. I liked this exchange for the sheer informational blankness Olsson practices - read, and feel your IQ drop ten points. "RR" is the Herald's reporter, "MO" is Olsson.

RR. I’m giving you an example as to how it could work, what
kind of regulations do you have in store to ensure that it doesn’t
happen it terms of money laundering?
MO. Its not dependent on St Helena law, that’s what I’m telling
you, its dependent on the law of the country where they are
operating from, because most countries got, have nothing to do
with because one of the requirements is that the company be in St
Helena because we got a competent authority that are supervising all
banks, you can not operate that bank in St Helena so they would not
have anything to do with money laundering or anything like that in St
Helena.
English Common Law
RR. So, just moving away. Why quote English Common Law on
your website?
MO. Because English Common Law is applicable to St Helena.
RR. In terms of, in what reference?
MO. In places where we don’t have legislation
RR. I understand that, in what reference are you quoting English
Common Law on your website in relation to Safeholder?
MO. It mainly has to do with Trusts
RR. Trusts?
MO. Trust legislation is actually in English Common Law, it means
that you can, um, put money in a Trust that is not your personal
belongings. You set the rate, the identity from yourself, and this has
been very common in the United States for example where the
insurance premiums are so big.
RR. Yes I understand that, so you are saying that it is do with Trust
purposes so if you want to invest in a Trust?
MO. Umm.
RR. So why, to quote your initial product line, include international
Capitalization and Hedge Funds. Is that what you are talking about?
MO. Sorry
RR. Is that what you are talking about when you say Trusts?
MO. Umm, Hedge Fund is a form of Trust, it’s a fairly specialized
more a short term Trust, the Hedge Fund. For example, we know that
George Sores is the biggest Hedge Fund Administrator in the world.
RR. Umm
MO. If you understand.
RR. Yes I understand, so what other kinds of Trusts, apart from Hedge
Funds are you interested in, or is Safeholder interested in?
MO. Capital Protection Trusts.
RR. Which you discussed earlier?
MO. Sorry?
RR. Which you discussed earlier?
MO. They are all similar, different ways of doing it; the same with
Bailment Accounts, Hedge Funds, yeah
RR. Umm
MO. A variety of different products.
RR. Just looking at a bit of history here how did you get involved in
the Safeholder organisation operation?
MO. Working together with two barristers which I have know for the
last ten years.
RR. So obviously you built a relationship with the Republic of Serb-
Krajina?
MO. I don’t have a relationship with Republic of Serb-Krajina at all.
RR. So whats the relationship? Obviously you are talking to them as
part of Safeholder and as the Operations Director you don’t have a
relationship with them at all?
MO. NO, no, not directly because in that sense not relative for the
operation of the business.
RR. Sorry, could you clarify that for me please? I’m a bit confused
with that statement, could you clarify please.
MO. Its not relative for the product, we have lawyers that are looking
at the legality of everything that happens in the business, I have full
confidence in them. So I don’t have to have any personal relation
with RSK at all.
RR. But surely as the Chief Operators Officer you would obviously
have to oversee every part of the business?
MO. Not every client, that would be impossible.

Is that completely clear? And is the Jonathan Levy who's peddling the oil of ancient Cabindan snakes the same man who appears in this curious conference, this rather embarrassing Counterpunch story, the Serbian Unity Congress's website and this manic conspiracy site?

Stand by for more thrilling revelations.

Hat tip to Jasmina Tesanovic. BTW, check out Doug "AFOE" Muir in the comments.