EFTA00687067.pdf

From: David Stern <EIMINI=> To: Jeffrey Epstein <jeevacation@gmail.com> Subject: Date: Sat, 28 Jan 2012 23:50:54 +0000 This is from the leading private wealth law firm, Withers. I copy the last point they made: could this be of interest/use for us? 7. We touched on a planning technique used by a number of our clients. The nature of modem anti-money laundering rules generally requires confirmation as to the identity of the original source of funds. A route to prevent this disclosure if it is seen as unattractive is to interpose a regulated or listed vehicle within the structure on the basis that many anti money laundering codes do not require verification of the owners of such entities. We have implemented this planning previously using entities regulated in Luxembourg and the Channel Islands. From: Graves, Katie [mailto Cc: Munro, Philip Subject: Potential new matter You asked us to follow up the meeting by setting down a summary of some of the key points discussed: 1. You suggested that there was now a particular desire on the part of high net worth investors to achieve a degree of 'ring-fencing' in the structuring of their investments as opposed to simply focusing on growth. This has been a particular concern of our clients following the banking crisis with clients concerned both in respect of the potential for claims to arise against them personally, and also in respect of contagion risk with pooled investments. Trusts can be useful vehicles in terms of trying to safeguard assets from creditor and third party claims such that they have a role in relation to the first concern. The second concern, in practice, tends to be addressed through ensuring the segregation of assets at investment level with the implementation of appropriate custodianship arrangements. 2. You described the wealth management platform you are envisaging creating as an 'asset management service', your idea being that the platform would facilitate the investment ideas that the participating families wish to implement. 3. There is an increasing understanding of the benefits of trusts within the PRC, particularly in the context of pre-IPO planning. In practice, trusts have been widely used by families in Europe and the Middle East for a number of generations such that, while some investors might find an investment model geared towards entry by trusts attractive, some investors may already have family trusts meaning that they might not find the offering of a Hong Kong trust useful or necessary. Further, where families have European or North American connections, a trust can carry, in some contexts, negative tax consequences. As we discussed, a model, then, predicated on a family discretionary trust entry vehicle would not necessarily suit all potential investors and each trust would need to be tailored to the individual family circumstances. In terms of promoting the proposed platform I think it would be important to stress that it would be open architecture and that you would want to work with each of the families as to how best to structure their involvement. 4. As an alternative to the use of a family discretionary trust, investors might be interested in entering their investment through a unit or investment trust model in which there is a trust which holds their investment but which issues, in consideration for the transfer to it, units or securities which may be transferrable to other family members. In practice, such a trust offers less third-party protection but may avoid some of the tax issues that investors with European or North American connections have. As a third option, we EFTA00687067 are aware of arrangements whereby a trust for the purpose of making investments for a family is established against which the family essentially have the contractual right to the investment returns. 5. We discussed the ways in which fees could be received in respect of a structure using trusts. If you were to form an entity to act as a trustee, this entity could charge annual trustee fees. A trust can also appoint an investment manager under contract and can pay an arm's length management fee to a manager. There would, accordingly, seem to be two tiers of charging easily available. 6. Presently there is limited regulation of trust companies in Hong Kong such that it would be relatively straightforward to form a private trustee company to act as trustee of one or more trusts. You would also wish to form an investment management entity. The investment management entity would likely need to be regulated in some jurisdiction. We touched on regulation in the UK and in Hong Kong. In many cases, our clients are using offshore investment managers because of the lighter-touch regimes to which they are subject. 7. We touched on a planning technique used by a number of our clients. The nature of modem anti-money laundering rules generally requires confirmation as to the identity of the original source of funds. A route to prevent this disclosure if it is seen as unattractive is to interpose a regulated or listed vehicle within the structure on the basis that many anti money laundering codes do not require verification of the owners of such entities. We have implemented this planning previously using entities regulated in Luxembourg and the Channel Islands. I hope this e-mail is useful. Please do let us know how best we can take this matter forward. Unfortunately we do not have Raymond and Gregory's email addresses so have not been able to send this email direct to them. Kind Regards Katie Graves (on behalf of Withers) Partner - Wealth Plannin Direct line: Withers LLP London T: London, Geneva, Zurich, Milan, Hong Kong, New York, Greenwich, New Haven, British Virgin Islands Wdhers LLP is a Limited Liability Partnership which is authorised and regulated by the Solicitors Regulation Authority with registered number 352314. Further information on the SRA rules and regulations can be found at www.sra.org.uklhandbook/ The firm's registered office is at London and its registration number is OO01149. A full list of members' names and their professional qualifications may be inspected at our registered office, This email (and any attachments) is confidential and may also be legally privileged. If you are not the intended recipient please immediately notify the sender then delete it from your system. You should not copy it or use it for any purpose nor disclose its contents to any other person EFTA00687068