France and Germany urge crackdown on tax havens

4th March 2009, Comments 0 comments

Break off fiscal agreement with countries which refuse to cooperate on matters of taxation, says French economy minister.

PARIS – France and Germany want to punish countries they see as "uncooperative" tax havens by having leading economies break off fiscal agreements with them, the French economy minister said on Tuesday.

"We want to act with determination against uncooperative places on matters of taxation, financial security or money-laundering," said the minister, Christine Lagarde, after meeting with her German counterpart Peer Steinbrueck.

She said international bodies at a meeting of leaders of the Group of 20 rich and emerging economies in London on 2 April should name and shame countries that do not cooperate on these issues.

"France and Germany want the Financial Action Task Force, the Financial Stability Forum (FSF) and the OECD to propose - for the London meeting - criteria and lists of countries that refuse international cooperation in these areas."

G20 states should "end their bilateral conventions with countries that refuse to incorporate the highest standards of the OECD and the United Nations" and oblige financiers to declare any dealings with such countries, she added.

The task force is a financial security grouping, while the FSF unites authorities from several rich countries and central banks. The Organisation for Cooperation and Development (OECD) groups 30 industrial nations.

World leaders are seeking ways to overhaul financial regulation in the wake of the crisis born in the US mortgage market and which has wrought havoc among banks and is now hitting manufacturing and jobs worldwide.

French President Nicolas Sarkozy said on Sunday that Switzerland could go on a planned G20 list of tax havens. In 2008, Steinbrueck annoyed Swiss bankers by calling for the country to be sanctioned for not cooperating against tax evasion.

However Steinbrueck declined to name Switzerland when questioned on the issue by reporters alongside Lagarde on Tuesday.

Switzerland has come under increasing pressure in the past months over its banking secrecy policy after a massive tax evasion probe launched by Germany over its citizens who hold bank accounts in neighbouring Liechtenstein.

AFP / Expatica

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