Switzerland, Luxembourg, Austria ready to ease bank secrecy

14th March 2009, Comments 0 comments

Their announcements followed similar moves Thursday by Belgium, Liechtenstein and Andorra -- the latter two on an OECD list of uncooperative tax havens -- and come ahead of a Group of 20 meeting in London where the issue is a hot topic.

Bern -- Switzerland, Luxembourg and Austria said Friday they would relax key bank secrecy laws to meet growing international demands for change but only on a limited, case by case basis.

Their announcements followed similar moves Thursday by Belgium, Liechtenstein and Andorra -- the latter two on an OECD list of uncooperative tax havens -- and come ahead of a Group of 20 meeting in London where the issue is a hot topic.

International pressure to clamp down on tax havens has been growing as the global financial crisis bites ever deeper, sparking calls for radical action to curb abuses held responsible for the debacle, among them tax evasion.

The Swiss government said Friday it would accept standards laid down by the Organisation for Economic Cooperation and Development (OECD) to allow the exchange of information with other countries.

This, however, would be done "case by case" and on the basis of "concrete and justified" requests, it said.

Switzerland was "maintaining banking secrecy and resolutely refused all automatic transmission of information."

"The private sphere of clients is still protected from unjustified watching from abroad ... Banking secrecy does not protect tax crimes," it added.

Luxembourg also said it would relax its strict banking secrecy laws and cooperate with foreign tax authorities in cases where fraud was suspected.

"Luxembourg is in favour of exchanging information on demand but only in precise cases and with clear proof" of suspicion of fraud, Treasury and Budget Minister Luc Frieden said.

Luxembourg would "align with OECD standards" on transparency and information exchange but "banking secrecy is not incompatible with OECD rules.

"Luxembourg would therefore maintain its banking secrecy as an instrument for protecting private life," Frieden said.

Austria insisted Friday that it would lift bank secrecy but only where there was "justified suspicion" of wrong-doing. "Our laws are in line with OECD guidelines," Finance Minister Josef Proell said.

"Austria will agree to supply information if the suspicions are justified and can be backed up (but) ... we will not change our legislation and there is no question of direct or systematic access (to) bank accounts," he said.

Austrian finance ministry spokesman Harald Waiglein told AFP that all countries had to change -- including the United States and Britain.

"We're in favour of equality in the face of competition and there are many countries which aren't transparent" in banking matters, he said, adding that the regime in the Channel Islands and in some US states such as Delaware, Montana or Nevada should also be examined.

"Unilaterally lifting banking secrecy will not contribute to transparency but will only divert financial flows and prejudice the Austrian economy," he said.

France and Germany have been leading the charge to clamp down on tax havens, calling for an international "sanctions mechanism," with the issue high on the agenda for Saturday's meeting of G20 finance ministers in London.

A full G20 summit follows on April 2, with European governments largely pressing for tighter regulation to prevent a recurrence of a global financial crisis, which draws parallels with the 1930s Great Depression.

French President Nicolas Sarkozy said Friday he welcomed the latest developments, attributing them to the resolute stand taken by Paris and Berlin.

"This shows that the firmness and determination we have demonstrated together with (German Chancellor Angela) Merkel is productive," Sarkozy said.

The global financial and economic crisis "must lead to change, very deep change and I wanted to see as the first change be the ending the system of tax havens," he said.

AFP/Expatica

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