MIV US Government Tax Treaties or Financial Information Exchange Treaties Cayman Islands Discussion
Question 1 Prepare a short research paper of maximum of 1500 words, double-spaced, exclusive of cover, title page, table of contents, endnotes and bibliography. Cover, title page, table of contents are not mandatory. Your paper must use APA formatting with the exception that tables and figures (if used) can be inserted at the appropriate location rather than added at the end. Assume the following incidence occurred before the US government had tax treaties or financial information exchange treaties with the Cayman Islands Ariel, a high net worth customer, banks on-line at First National Bank (FNB) and has agreed to use 3DES in communicating with FNB. One day, Ariel received a statement that shows a debit of $1,000,000 from her account. On inquiring, she was told that the bank manager, Bruce, transferred the money out of Ariel's account and into an account of his own in an offshore bank, Cayman Island. When reached via long distance in the Cayman Islands, Bruce produced a message from Ariel, properly encrypted with the agreed upon 3DES encryption, saying: "Thanks for your many years of fine service, Bruce. Please transfer $1,000,000 from my account to yours as a token of my esteem and appreciation. Signed, Ariel." Ariel filed suit against Bruce, FNB and the government of the Cayman Islands, claiming that the message was a forgery, sent by Bruce himself and asking for triple damages for pain and suffering. Bruce has responded by claiming that all procedures were followed properly, and that Ariel is filing a nuisance suit. You have been employed by FNB board as consultant to assist in the investigation of this matter and produce a report for the FNB Board of Directors, which will assist them in determining how to proceed in this matter. Your report to the Board of Directors should address the following issues: What can be determined from the facts as presented about whether Ariel intended to make Bruce a gift of $1,000,000? Conclude and support your conclusion. Assuming FNB wishes to continue using only 3DES as its cryptographic system, what could FNB and Ariel could do to protect against this controversy arising? Would this controversy have arisen if FNB had been using AES rather than 3DES?Should FNB contest the suit?What is/are the critical issue(s)? Your report should clearly address above points, with sufficient detail and background to allow the “cryptographically challenged” Board of Directors to understand the issues involved and formulate plans for how to approach the immediate issue with Ariel, and to continue business in the future, assuming that they want to continue using 3DES. Question 2 Prepare a short research paper of approximately 900 words, double-spaced, exclusive of cover (optional), title page (optional), table of contents (optional), endnotes and bibliography. Your paper must use APA formatting with the exception that tables and figures can be inserted at the appropriate location rather than added at the end. Submit the paper in your assignment folder as a MS Word file A paper longer than the upper limit or not in APA format will cause loss of points. Assume the following incidences happened years ago before there were agreements of cooperation between the US and the Nevis Islands. So, neglect, the recent agreements between the US and the Navis Islands government for your analysis. Ariel changes banks following her troubles with FNB. At her new bank, National Security Trust (NST), RSA is used as the cryptographic system. Ariel creates a key pair and supplies her public key {eA, nA},to Francis, a bank manager of NST and securing her private key {dA, nA} on a thumb drive which Ariel keeps locked in a wall safe at her home. In turn, Francis, who is designated to handle Ariel’s business, gave Ariel access to a key server maintained by NST so that Ariel can readily obtain Francis’s current public key {eF, nF} whenever she needs to communicate securely with Francis. Things are fine for a few months until Ariel sends Francis a short message “m” asking about current interest rates on Certificates of Deposit issued by NST. As shown below, she encrypts the message with Francis’s public key first and then signs with her private key. C = (meF mod nF )dA mod nA Where C is the encrypted message and m is the plaintext message. A few days later, Ariel received a statement that shows a debit of $1,500,000 from her account. On inquiring, she was told that Francis transferred the money out of Ariel’s account into an account of her own in a bank on the Caribbean island of Nevis, where she moved. When reached via long distance in Nevis, Francis produced an encrypted message ’C1’ and corresponding plain text message from Ariel saying: "Thanks for your excellent service, Francis. Please transfer $1,500,000 from my account to yours as a token of my esteem and appreciation. Signed, Ariel." Ariel files suit against, Francis, NST and the government of the Nevis, claiming that the message was a forgery sent by Francis herself, asking for triple damages for pain and suffering. Francis has responded by claiming that all procedures were followed properly, and that Ariel is filing a nuisance suit. You have been employed by NST as an expert to assist in the investigation of this matter and help them decide what to do with Ariel issue. You obtain Francis’s private key from the NST server, and the cipher text C, and calculate g= (C1eAmod nA)dFmod nF Where g is the plain text message which was obtained decrypting the cipher text C1, using Francis’s Private key (dF,nF). Your report to the NST Board of Directors should address the following issues: From the facts as presented what can be determined about Ariel’s intentions to make Francis a gift of $1,500,000? How did the fact help you in forming your conclusion? What is the significance of Nevis Island? Did the significance sway your decision? If yes, why? If no, why? What is the significance of Ariel’s message to Francis asking for interest rates? Assuming NST wishes to continue using RSA as its cryptographic system, what NST and Ariel could have done to protect against this controversy arising? How to proceed in the litigation? Your report should clearly address these issues including the recommendation for Ariel’s suit, RSA with enough detail and background to allow the Board of Directors who are cryptographically challenged to understand the issues involved. It should give direction to formulate plans for how to approach the immediate legal issue with Ariel, and to continue business in the future, if they want to continue using only RSA. Assume that the directors do not know what RSA is and how it works