Luxembourg ready to revise bank secrecy: minister

Luxembourg is prepared to lift the lid slightly on its controversial bank secrecy in an effort to help curb tax evasion by foreign depositors, its finance minister told a Sunday newspaper.

Following intense criticism by eurozone partners of Luxembourg’s insular banking practices, Luc Frieden told Germany’s Frankfurter Allgemeine Sonntagszeitung it would now consider moves toward greater transparency.

“We want to strengthen cooperation with foreign tax authorities,” he said.

“The international trend is going toward an automatic exchange of bank deposit information. We no longer strictly oppose that.”

He cited interest payments to foreign clients as an example of data that could be given to home countries as a matter of course.

“Luxembourg does not rely on clients who want to save on their taxes.”

German Finance Minister Wolfgang Schaeuble called the remarks good news.

“I welcome every step toward an automatic exchange of information,” he told Monday’s issue of the daily Saarbruecker Zeitung, which provided an advance copy.

“We are in close consultations with Luxembourg and discussed the issue a few weeks ago during a meeting of the German-speaking finance ministers in Berlin.”

One of six founding members of the EU, Luxembourg has increasingly come under the microscope in post-global financial crisis legislative clean-up action, primarily for its culture of banking secrecy.

Frieden said recently he wants finance clients to come to Luxembourg “not to escape taxation… but because our products and services are better geared to international needs.”

The Luxembourg government said the sector includes 141 banks from 26 countries and 3,840 investment funds sold in 70 other countries.

The issue gained fresh prominence this month when a vast trove of emails and leaked records from offshore tax havens exposed the identities of thousands of account holders.

The release prompted fresh calls to crack down on banking systems that facilitate tax dodging.