Relieved EU nations escape tax haven blacklist

21st March 2009, Comments 0 comments

Europe, led by Germany and France, is using the global financial crisis to step up its offensive on tax havens, which it accuses of allowing banks to hide losses and hedge funds to evade regulation.

Brussels -- The European Union has reassured Luxembourg, Austria and Belgium that they will not figure on an international blacklist of tax havens to be drawn up at next month's key Group of 20 summit.

Switzerland, a non-EU member, was told it had also escaped the threat of inclusion on the list by agreeing last week to ease its long-cherished banking secrecy.

Czech Prime Minister Mirek Topolanek, whose country holds the EU presidency, said at a summit of the bloc Thursday: "There are countries -- Luxembourg, Austria, Switzerland and non-EU members -- who unanimously accepted the OECD conditions and therefore they won't be on the list any more."

EU countries were meeting in Brussels to try to agree a position for a G20 summit in London on April 2, including calls for G20 nations to fight tax evasion and ensure greater cooperation from tax havens.

Europe, led by Germany and France, are using the global financial crisis to step up their offensive on tax havens, which they accuse of allowing banks to hide losses and hedge funds to evade regulation.

Luxembourg, Belgium and Austria have banking laws similar to those in non-EU members Liechtenstein and Switzerland. They have been reluctant to embrace EU rules on sharing account details with fellow European tax authorities, fearing that doing so will lead to a loss of lucrative banking business.

But the three EU nations recently fell into line, agreeing to comply with the rules on the exchange of tax information set by the Organisation for Economic Cooperation (OECD).

"All those countries which have opted for the OECD standards, and which put the procedure in place by completing the necessary agreements to do so, are not in my opinion in serious danger of being on the blacklist," Austrian Chancellor Werner Faymann said Friday.

Germany's efforts to pressure Switzerland over tax havens has seen emotions run high, with outspoken German Finance Minister Peer Steinbrueck compared to a Nazi by one Swiss lawmaker.

The outburst came after Steinbrueck had made comments that were interpreted in Switzerland as likening the Swiss to cowed "Indians."

"The cavalry in Fort Yuma doesn't always have to ride out. Sometimes it is sufficient just for the Indians to know that they are there," Steinbrueck was quoted as saying.

Luxembourg Prime Minister Jean-Claude Juncker said France and Germany -- two of the EU nations who are members of the G20 -- had weighed in to ensure that his country and their EU counterparts would not be on the blacklist.

French President "Nicolas Sarkozy and (German Chancellor) Angela Merkel let it be known that France and Germany would not agree to Luxembourg, Austria or Belgium being put on a tax haven list," Juncker told journalists.

A Swiss newspaper reported this week that the OECD has identified 46 countries and territories for making "insufficient progress" in meeting standards on tax cooperation, in a pre-G20 summit list supplied to Britain.

But the Tages Anzeiger reported that Switzerland, Singapore and Hong Kong had managed to avoid being categorised as "tax havens" by the OECD and would instead fall under the heading of financial centres.

Countries such as Liberia, Monaco and a host of Caribbean and Pacific islands would be classed as tax havens, the report said.

Sophie Laubie/AFP/Expatica

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