Vanderbilt Journal of Transnational Law


David Aronofsky

First Page



In 1997, Montana attracted national and world financial attention when Montana Governor Mark Racicot signed into law Senate Bill 83, the Foreign Capital Depository Act (Act), creating the first U.S. state-chartered financial entity designed solely for attracting non-U.S. capital. Depicted by skeptics as an unworkable "Panama without the Canal," "Switzerland of the Rockies" and "Rocky Mountain High," Montana is nonetheless pursuing a creative approach to increased state revenues that capitalizes on the state's unique privacy laws as well as innovative statutory drafting. The Act warrants attention from offshore assets owners and managers who seek U.S. stability in a state committed to full financial privacy protections.

This Article first describes the Act's history, key provisions and implementing regulations. It then briefly assesses several legal issues affecting the Act's likely future. These include: (1) Montana's constitutional privacy rights applicable to foreign capital depositories and their customers; (2) the Act's relationship to federal money laundering laws; (3) the Act's express statutory bar against recognizing and enforcing most non-U.S. court judgments adverse to depositories and their customers; and (4) the implications of newly emerging federalism jurisprudence that suggests that sovereign state activities, including those related to international financial services, may fall outside the scope of international treaty and federal regulatory statutes traditionally deemed applicable to such activity. Finally, the Article draws some preliminary conclusions about the Act's future.