Money Laundering and your Bank Accounts – Part III – Funds Transfers

image by Vitaly via

This is the third part in our series revealing exactly what banks are looking for when they are combatting money laundering.
Transferring funds is at the heart of commerce and is the most important function performed by modern banks. Transferring funds is also at the heart of money laundering. Move dirty money through enough hands by sufficiently devious means and at some point, it magically becomes clean.
Think about this, if we can describe an activity, it is possible to write software to detect it. Banks do just that.

Bank Checks on Money Laundering Funds Transfers

You transfer funds in large, round dollar, hundred dollar, or thousand dollar amounts.

This is classic smurfing. Sudafed smurfs were buyers for meth labs who would go from drugstore to drugstore purchasing Sudafed cold medicine containing pseudoephedrine. The manufacturer then made crystal meth from the pseudoephedrine. Smurfing has expanded into money laundering. Smurfs typically deposit small amounts to many accounts. The money from those accounts is then assembled and transferred to a master account in another country. Then someone transfers the money, this time to the actual beneficiary. Dirty money often travels through several jurisdictions before arriving at the final destination.

Funds transfer activity occurs to or from a financial secrecy haven, or to or from a higher-risk geographic location without an apparent business reason or when the activity is inconsistent with the customer’s business or history.

“Higher-risk geographic locations” tend to be tiny island nations such as the Cayman Islands, Vanuatu or the British Virgin Islands. But, they are also places such as Luxembourg and Gibraltar. Banks maintain a list of risky jurisdictions. Transactions involving such jurisdictions receive extra scrutiny.

Funds transfer activity occurs to or from a financial institution located in a higher risk jurisdiction distant from the customer’s operations.

There might be a logical reason for a Florida business to be remitting to or receiving funds from the British Virgin Islands, which are close by. On the other hand, it is unlikely that they’d be doing much business with the Cook Islands in the South Pacific. Again, banks will pay extra attention to such transactions.

Your accounts receive many small, incoming transfers of funds, or receive deposits of checks and money orders. Then, almost immediately, all or most of the transfers or deposits are wired to another city or country. Usually, the transfers are in a manner inconsistent with the customer’s business or history.

Again, we see smurfing on a large scale. Drug cartels purchase chain restaurants, casinos, entertainment and sports venues in order to be able to launder money through them. These venues typically have large numbers of small transactions; ideal for throwing banks off the scent. But law enforcement has statistical data that can sniff out this sort of money laundering.

Your accounts receive large, incoming funds transfers on behalf of a foreign client, with little or no explicit reason.

Banks want to know what to expect. If you are going to be receiving a large amount of money, it is wise to tell them in advance what is going on. Ensure that they write it down so that you can avoid suspicion. You may think it is troublesome, but having the FBI knocking on your door is real trouble.

Transferring funds is unexplained, repetitive, or shows unusual patterns.

To the average person, the world seems jumbled, chancy, ad hoc. But those who pay attention see patterns. So it is with bank accounts. Observe enough bank accounts and you’ll see that 99.9% of them follow predictable patterns. If your account is in the one-tenth of one percent, the bank will examine it closely.

You receive payments or receipts with no apparent links to legitimate contracts, goods, or services.

If you run an asphalt business and suddenly receive payment in your account for a Ferrari, that may well be flagged. Receive payment for a Ferrari and a luxury condo and it will be flagged.

You send funds to the same person using different accounts or to different accounts. Or the reverse.

Well Sir Smurf-a-lot, banks figured out this channel a long time ago. It can work, but only by using multiple aliases or smurfs at many banks over a long time.

You don’t provide enough information regarding funds transfers, not only the why but also the who of related parties.

Banks detect these omissions sometimes but they fall into a gray zone. Protect yourself by being open and up front in describing both why the transaction is taking place and who the beneficiary is.

AEOI Forcing Moves from Offshore to Midshore

AEOI drives Putin offshore
AEOI and FATCA make it more and more difficult to shield one’s income in offshore havens. Today, many people are finding that the risks and inconvenience of banking offshore merely to save on taxes no longer make sense. For that reason, more and more individuals and companies are moving to midshore locations. Locations that have strong banks and banking sectors and favorable tax systems are termed “midshore’.

Midshore Locations

Midshore locations are relatively few. The best are Singapore, Hong Kong, The Netherlands, Ireland and Delaware. If you know how to take advantage of their tax systems, then your real taxes can be quite reasonable. In addition, business that move to a mid-shore jurisdiction start being taken seriously. The reality isk that no one trusts businesses from offshore jurisdictions; their purpose is known by everyone. But a business in a midshore location can have low taxes but enjoy the benefits of the reputation of the jurisdiction.

Everything Leads to Trump

Much of the world knows about the Christopher Steele dossier about the Russian Government’s kompromat bribes and promised bribes to Donald Trump and his rather motley crew. The dossier claims that Vladimir Putin promised to give Trump a 19% share in Rosneft when he kills the sanctions on Russia. Now, you may choose not to believe the dossier, and that’s understandable. However, it is indisputable that the deal was funded by only 300 million euros. And 19.5% of Rosneft is worth at least 10.2 billion euros.

When the new owners of the transaction are traced, it turns out to be a Cayman Islands company. To top that off, of the three owners of the Cayman Islands company, no one knows who the third party is. But the other owners are a Cayman Island company owned by a Cayman Island company.  When it came time to regularise the deal and present a respectable face to the world, they chose to form a Singapore company, QHG Shares Pte. Ltd. Clearly midshore companies make sense, even when buying a President.

Rosneft boss, Oligarch, former Putin aide and Tillerson friend, Igor Sechin revealed the deal on December 7, 2016, exactly one month after Donald Trump was elected. In the process, Putin pounded another nail in the coffin of the Cayman Island’s reputation. He gloated that the deal was a sign of international faith in Russia in spite of the sanctions.

He could have boasted that it was a cheap price to pay to buy the President of the United States. Dirty dealings. And that’s why no one respects offshore companies. And shady types love them.

AEOI Says Now’s the Time

AEOI kicks the comfortable in the rear and says “Wake up!” It’s time to get moving and stay ahead of malevolent bureaucrats who would do you harm. Contact us to get started on regularising your operations. We have a number of competitive, high-reputation midshore locations to choose from.

New Country. New Business. New Life. AEOI & FATCA Part II

Where not to do business:

By Sbw01f [GFDL ( or CC BY-SA 3.0 (], via Wikimedia Commons
Percentage of People living on $1.00/day or less

We ended the first part of this discussion of inequality. While extreme equality isn’t needed to make a country a good place to do business, extreme inequality is a significant barrier to doing business in a country. That doesn’t mean that it isn’t a good place to settle down, but it does mean that must either concentrate on making your money elsewhere or concentrate on a business serving those who control the wealth.

This is the same table we presented in Part I of this essay:

Country Tax Percent
of GDP
HDI Ease Of
Doing Business
Inequality* 2025 Population Growth** Economic Freedom*** 2015 Real GDP Growth
New Zealand 27.8 0.913 1 0.362 5.6 3 3.00%
Singapore 13.5 0.912 2 0.464 0.7 2 2.00%
Denmark 34.8 0.923 3 0.248 0.7 18 1.00%
Hong Kong 12.5 0.910 4 0.537 -1.2 1 2.40%
Korea 13.9 0.898 5 .0302 -0.2 23 0.50%
Norway 22.4 0.944 6 .0268 3.4 25 1.60%
U.K. 25.0 0.907 7 0.324 2.2 12 2.20%
U.S.A. 11.4 0.915 8 0.450 3.0 17 2.50%
Sweden 43.3 0.907 9 .0249 2.2 19 4.20%
Macedonia 16.4 0.747 10 .0436 -1.6 31 3.20%

* The data isn’t available from a single source so Wikipedia has used a combination of CIA, World Bank and UN data. You can use the links on the Wikipedia site to get to the original data.

** Based on UN constant fertility forecast for the period 2025-2030. I selected this period because almost all population rates of growth are declining and if you are going to have a business, it is important to have an idea of whether you are enterenting a market that growing, static or shrinking. For comparison, the least developed countries have a forecasted birth rate of 27.3 births per thousand and that rate is increasing.

*** This data is from the Heritage Foundation which is a conservative political group in the U.S. that views the U.S. as a socialist state. (!) That should be borne in mind when interpreting the results…at least for the U.S. In any case, most of these countries rank fairly well on the scale of economic freedom.

Population Growth

Throughout the developed and developing world, the rate of population growth is dropping. In much of Eastern and Northern Europe as well as some other countries, the population is declining. We have not yet developed an economic system able to cope well with declining population. If you plan on doing business, you are far better off doing business in a country that is both prosperous and experiencing a reasonable rate of population growth. I’ve selected a date a bit into the future as it is important to know what is coming in this case, not what has passed.

It would probably be optimal to live in a society of zero population growth where there was full employment for everyone who wanted it as they were engaged in improving the quality of life rather than simply producing more and more stuff. Of the countries in this table, those showing positive growth are all reasonable choices based on this one criterion. Barring a change in economic systems in the next ten years the ones showing negative population growth should be avoided.

Economic Freedom

The following components go into the makeup of the Heritage Foundation calculation.  Heritage is not an honest broker so its judgement as to what exactly comprises economic freedom is skewed towards the Burkean ideal rather than that of Voltaire. Furthermore, they have an incentive to make the U.S. look bad when Democrats or moderate Republicans are in office.  That is something to keep in mind.

Property Rights Government Integrity Judicial Effectiveness Trade Freedom
Government Spending Tax Burden Fiscal Health Investment Freedom
Business Freedom Labor Freedom Monetary Freedom Financial Freedom

Real GDP Growth

This is a number that is fairly difficult to tinker with over the short term, but, of course, countries such as China have regarded it as just another piece of propaganda for so long that it is difficult to know what the actual facts are in their GDP reports. Having said that, the countries in our top ten are fairly consistent in their reporting methodologies year-over-year so we can be fairly certain that these growth numbers are real, even if their absolute GDP numbers may not be.

For lack of space we did not list Human Freedom or Polical Risk on the list at the top.  They appear below.

Political Risk

This is not a measure of political freedom. One can make a case that increased democracy brings with it increased political risk. Of course, one can say the same for totalitarianism. For business purposes, one doesn’t care particularly whether a country is democratic or autocratic, the one thing it must be is stable. So lower political risk is a measure of stability, not a measure of freedom.

Human Freedom

This may be the most important of all freedoms but, as business is defined today, it isn’t considered a necessary component although it is hard to point to any countries that have had long term business success without a great deal of human freedom. For that reason, we are presenting the scores here. First is a list of all the many indicators that are used and then the scores. You can download the report here:

Healthcare System Efficiency

WHO measures the health systems of the world to determine the quality and equity of the system in three areas, health outcomes, responsiveness and fairness in financing. From these they calculate a composite index which is what we display here. Because a poorly performing healthcare system adversely affects a country in numerous ways. It is an important measure to look at on its own, as we do here.

Best Countries to Live In

U.S. News & World Report uses sixty-three criteria to determine which the best countries are to live and work in. Among the criteria used for Entrepreneurship, for example, are: Provides easy access to capital, Well-developed infrastructure, Transparent business practices, Educated population, Skilled labor force, Entrepreneurial, and Connected to the rest of the world. These are just a few of the many scorings used. This is clearly an important adjunct to making your final decision as to where to live and to have a business.

Human Freedom Index
2016 Political Risk
WHO Health System Ranking
U.S. News Best Country Index
1. Hong Kong 92 n/a n/a
3. New Zealand 87 14 41
5. Denmark 82 34 12
6. U.K. 81 18 3
13. Norway 81 11 10
15. Sweden 88 23 6
23. United States 85 37 7
35. Korea 81 58 23
40. Singapore 91 6 15
55. Macedonia n/a 89 n/a


New Country. New Business. New Life. AEOI & FATCA Part I

Majestic Center Wellington, NZ. moderate taxes and good growth.
Majestic Center Wellington, NZ, Photo by Dabbelju
The best countries in the world have a compelling mix of taxes, lifestyle opportunities, and business support. Let’s take a look at the best of the best.

Generally speaking, all of us have the same core wants and needs. The Human Development Index (HDI) attempts to boil these needs & wants down to a single number to allow country-to-country comparisons. In our estimation, your quality of life should be paramount in your planning and the HDI helps you do that. However, if you are reading this, more than likely you are also interested in the best place to start a business. We’ve tried to provide you with the essential data for that, too. In this essay, then, I’ve attempted to provide you with the basic data you need to decide on where to work and to live.

The table below is gathered from a number of reliable sources (OECD, World Bank, etc.) and each statistic uses a consistent methodology for all the countries listed. I will discuss the first four columns in this post and the remaining four columns in the next one.

Presenting: The Data

Country Tax Percent
of GDP
HDI Ease Of
Doing Business
Inequality* Population Growth Economic Freedom** 2015 Real GDP Growth 2016 Political Risk
New Zealand 27.8 0.913 1 0.362 0.72 4 3.00% 87
Singapore 13.5 0.912 2 0.464 1.97 2 2.00% 91
Denmark 34.8 0.923 3 0.248 0.42 9 1.00% 82
Hong Kong 12.5 0.910 4 0.537 0.83 1 2.40% 92
Korea 13.9 0.898 5 .0302 0.48 34 0.50% 81
Norway 22.4 0.944 6 .0268 1.27 31 1.60% 88
U.K. 25.0 0.907 7 0.324 0.63 14 2.20% 81
U.S.A. 11.4 0.915 8 0.450 0.75 10 2.50% 85
Sweden 43.3 0.907 9 .0249 0.73 18 4.20% 88
Macedonia 16.4 0.747 10 .0436 0.16 43 3.20% n/a

* The data isn’t available from a single source so Wikipedia has used a combination of CIA, World Bank and UN data. You can use the links on the Wikipedia site to get to the original data.
** This data is from the Heritage Foundation which is a conservative political group in the U.S. that views the U.S. as a socialist state. (!) That should be borne in mind when interpreting the results…at least for the U.S. In any case, most of these countries rank fairly well on the scale of ecoomic freedom.


Taxes are a complex issue that actually makes it impossible to perfectly compare tax burdens across countries, but it isn’t for lack of trying. We can safely say is that these data can affect the way you think about your life and your business. Tax data is presented in what is probably the only reliable way. There are so many variables that you must consult a professional before finalising any decision. Still, these numbers are fairly representative of the actual state of taxes in a country vs. what the laws say. The lower the number, the better your personal tax situation is likely to be.

You will find some cases, such as the U.S, where the nominal taxes are far higher than the actual taxes collected. For example, claimed billionaire, Donald Trump, may not have paid income taxes on fifty million dollars of personal income a year quite legally. It is important that before making any significant financial decision you think about the tax implications. With a good tax accountant or attorney it may be possible to use the deal to avoid taxes not only on the deal, but on other income you make as well.

Human Development Index

This score is incredibly important if you are going to raise a family or to hire competent workers in the country. The HDI covers three important aspects of your life:

  • Can you expect a long and healthy life?
  • Education: How educated is the populace?
  • How likely are the folks around you to have a decent standard of living?

For education, of the countries on this list, New Zealand is second, Norway is third and the U.S. is fifth in the world for education. But it is the total package you should be concerned about and the HDI gives you that number.


Our core belief is in a universal taxation system in which everyone would pay taxes on their wealth and businesses would pay no taxes. Perhaps one day we’ll explain why this is so, but because that is unlikely to happen while our species is dominant. We’ll set that discussion aside for another time. In the real world, FATCA and AEOI are going to make tax avoidance for those wishing to live in a nice country, almost impossible. Almost. But if you are willing to live a peripatetic lifestyle, then you have the possibility of never living 183 or more days in a single location.

For non-Americans, that can make it possible to avoid personal income taxes completely. If you prefer to live a stable life in a decent country such as one of the ten listed here you will pay some income taxes. Your task is to find the country that best matches your criteria for a good place to live and do business while minimising your tax burden.

Ease of Doing business

How easy is it do deal with governments and banks? These are the criteria included in the index:

  • Dealing with construction permits
  • Getting electricity
  • Registering property
  • Getting credit
  • Protecting minority investors
  • Paying taxes
  • Trading across borders
  • Enforcing contracts
  • Resolving insolvency

Economic Inequality

More than a few people would yawn at the idea of economic inequality being a problem because they hope that they will be at the top of the heap looking down. We often think that way because our minds are utterly unable to comprehend the level of inequality in the world. I shall try to give you an idea, though:

Let’s say that you have one million dollars in the bank. We will assign your one million dollars the height of one pixel on a chart. Twenty-eight million dollars would make a line 28 pixels high. That’s just a bit more than a centimeter. So your line is 1/28th cm tall.  About 1/3 mm.
Bill Gates has been busily giving away his money for sixteen years now and has engaged in it exclusively for the past eight years, and yet his net worth is now 85.9 billion dollars. His line next to your pixel is going to be 89500 pixels tall. your wealth is 1/28th of a centimeter. In order to see his line fully, you will need a screen 32 meters tall. And most of the people in the world don’t have even the wealth that an atom would represent in that scheme. That is inequality.

Final Thoughts for Part I

By and large, it is consumption that drives the production pump. However, when there is gross inequality, money is unavailable for consumption and so producers don’t produce. For that reason you want your business to be in a country with a relatively low inequality (GINI) coefficient.

Start a business in a country that scores well on taxes, human development, the ease of doing business and economic equality and you are well on your way to living a long, prosperous and satisfying life.
There is no perfect country for starting a business, but these are some of the best by any objective measure. We can help you get up and running in several of these countries. Save time, money and aggravation. Connect with us.

FATCA, AEOI and Economic Reformation

Economic reformation to retreat from planetary boundaries
Bumping Against Planetary Boundaries. Derived from globe.svg by Ninjatacoshell

AEOI and FATCA are symptoms of the failed version of capitalism that underlies global political turmoil and the crisis stage our planetary home has already met. Politicians worldwide are desperate to provide enough for their voters to keep themselves in office, but they are failing. Their failure causes disappointment, anger, war, devastation and flight. Populists with worse ideas are attempting to cash in on the chaos. They will be even less successful.

The Failure of Conventional Capitalism

We think we know that capitalism is all about growth. If we could make enough stuff, everyone would be better off. Shallow thinking. Although we all know that the Earth is finite and that we’re not leaving, we act as though Earth’s resources are infinite. The capitalism that we embrace as our secular religion takes that as a given. But the collapse of Venezuela, Somalia, Syria, Western Sahara, the encroaching of sands onto Chinese agricultural lands and the disappearing summer sea ice of the Arctic tell another story.

AEOI and FATCA Measure Desperation

If things were proceeding normally, the OECD governments would not be desperate for revenue. After all, they suck in monumental amounts of revenue every year, that should be enough. Sad to say they then disgorge it wastefully. To top that off, they pilfer it from the pockets of those who need it most and pass it to those who need it least. So they get remarkably little bang for the buck and so do we. This topsy-turvy allocation may align with a fairy-tale version of capitalism but it dispenses with capitalism’s promise.

That’s not news to you, I’m sure. If governments spend revenue unwisely, their first response is to seek more revenue, not to spend wisely. Having emptied the pocketbooks of 95% of their citizens and not wanting to bother the rest, they look farther afield. AEOI and FATCA are the tools they use to suss out additional revenue sources. You look like a likely candidate.

Unforced Change Not in the Cards

Liberals, Socialists, Conservatives and NeoLiberals all suffer from the same illusion that the problem of current debt is solved through future growth. They have to believe it. If they don’t, their whole system collapses. The trouble is that even children can now see that the emperor has no clothes. Politicians cannot see the fallacy because they must not see the it. If they do, they will have no choice but to do what’s necessary to make things better. What could be more unwise than that?

Wealth Concentrates as the World Deteriorates

The structure of today’s capitalism all but guarantees that not only rent-seeking (seeking unearned income) is rife but also ensures through self-reinforcing rental mechanisms greater and greater wealth will accumulate faster and faster. It is accumulating so fast now that this may be the year that one person owns as much wealth as 99% of humanity. At the same time, human population continues to climb and global warming continues to increase with no halt in sight.

Unstopped, global warming will kill us all. Unstopped, population growth will kill us all. And unstopped, wealth concentration will kill us all.
One thing we know with absolute certainty, in a finite system, exponential growth will not continue indefinitely. That’s where we are today. Believe what you want, reality doesn’t care.

Measuring Inequality

I need to make a slight aside here so that you can understand where you are in the grand scale of things. If you have more than US$10,000 in wealth then you have more than 71% of the people on Earth. If you have US$100,000, you have more than 92% of the people on Earth and if you have US$1,000,000 you have more than 99.4% of the people on Earth. And if you are the richest person, you have as much as everyone else put together. Ahhhh the schadenfreude and envy that you must feeling and feeling guilty about, right now, for you are so far above the bottom but the top is out of reach.

There is no way to graph your wealth in relationship to Bill Gates or Warren Buffet. If you have only a few million in wealth, your dot on the computer screen will vanish into nothingness. You’ll cease to exist. Every time he swings his golf club a multi-billionaire accumulates more wealth by the mere fact of his existence than you will in a lifetime of work. Perhaps you think that’s okay. I don’t.

Traditional Capitalism Encourages Shoddyness

Somewhere along the way progressing out of my lower middle-class life I learned that a little extra money spent on clothing bought clothing that was an order of magnitude better in terms of durability and wearability. One could easily spend twice as much on a piece of clothing and get ten times the wear out of it. As it turned out that was true of many things. (Not cars, unfortunately. or smartphones.) Those who patronise Walmart ensure that they’ll need to keep patronising Walmart because the quality is so poor that they have to keep shopping there for replacements. Savings in the world of shoddy are hard to come by.  A few more dollars spent at Land’s End, Duluth or L.L. Bean can mean a decade’s difference in the life of a skirt or shirt. Longer-lived clothes are one more way to add to your bank account.

This isn’t meant as an anti-Walmart tirade, it is to point out that mere numbers do not tell the story of economic progress. Take Las Vegas as an example.

Las Vegas – Home of the Ephemeral

Las Vegas Boulevard is a strip of disposable multi-billion dollar dream castles and fantasies.  The Neon Museum in Las Vegas is the final resting place for the signs of once world-famous casinos that are no more. It houses the last echo of casinos that were wondrous, shoddy creations in their day; creations that deteriorated and outlived their use-by dates and were imploded to make way for equally shoddy successors.

How much more money would have had to have been built into the design and construction of each of these buildings to extend their lives for one or two hundred years?  Ten to fifteen percent. That’s all. But of course the pay back would have started a little later and taken a little longer, and that was all that mattered. It should be obvious that this sort of thinking is a direct contradiction to universal principles and patterns of systemic health and development.

What Can be Done

Regenerative Capitalism offers a way out. But it calls for a radical shift in perspective. Growth is out. Improvement is in.

Here I adapt page 8 and 9 of Regenerative Capitalism

These are the eight characteristics of a healthy human system:

  1. A Healthy System is Innovative, Adaptive, Responsive.  The most innovative, adaptive and responsive systems are the ones most likely to prosper in a world of change.  In Darwinian terms, they are the most “fit”.
  2. It Empowers Participation.  In an interdependent system, fitness comes all parts contributing and taking from the system so that the whole benefits as well as the parts.
  3. A Healthy Human System Honors Community and Place.  Each human occupies a unique place in the system and came to that place through a unique history. A healthy system will honour each person’s place and history.
  4. It Fosters Edge Effect Abundance.  We are a collection of small systems and maximum creativity occurs where different systems touch, not at the center where things are uniform. Working collaboratively across the edges enhances each system.
  5. It has Robust Circulatory Flow.  Economic health is dependent on the robust circulation of money, information and resources.  Sequestering these in the hands of a few leads to economic death.
  6. A Healthy System Seeks Balance.  The Regenerative Economy seeks to balance efficiency and resilience; collaboration and competition; diversity and coherence; and small, medium, and large organizations and needs.
  7. It is In a Proper Relationship.  Humanity is an integral part of an interconnected web of life in which there is no real separation between “us” and “it.” The scale of the human economy matters in relation to the biosphere in which it is embedded.
  8. It Views Wealth Holistically.  True wealth is not merely money in the bank. It must be defined and managed in terms of the well-being of the whole, achieved through the harmonization of multiple kinds of wealth or capital. These  include social, cultural, living, and experiential capital. The human system must also be defined by a broadly shared prosperity across all of these varied forms of capital.

Where to Start?

AEOI and FATCA are, as I mentioned, tools that demonstrate the desperation of governments to increase their revenue streams. Resistance is futile. They will have their way sooner or later and you must become comfortable with that fact. There are two things you can do, and both are important:
First, you can avail of legal options that will reduce or eliminate the taxes that you now pay through careful tax planning. I personally detest the idea that we have a system that enables this form of legal cheating, but that’s the system we live in.Contact us for some ideas.
Second, Read Regenerative Capitalism.
Third, Get locally involved, no matter where you are. If you are reading this, you are the kind of person that can make things happen in your community or communities adhering to the principles above. Do it.