Ethics and governance in the European Financial centers

German Finance Minister Peer Steinbruck warned in interview that is published by Sunday's edition of Bild newspaper that Germany might "complicate the business movements" against Liechtenstein if it didn't cooperate in the fight against tax fraud. He also launched a challenge to other European tax havens practising banking secrecy : "It's not just Liechtenstein, we're also talking about Switzerland, Luxembourg or Austria," he added.

Read original interview in German


A country cannot base its groth on banking secrecy, tax evasion and frauds in general.

Angel Gurría, who is is secretary-general of the Organisation for Economic Co-operation and Development, published an article in the Financial Times dated 20 february 2008.

He stated that "Jurisdictions characterised by strict bank secrecy and a policy or practice of non-co-operation with law enforcement in other countries prosper by attracting brass plate banks, anonymous financial companies and asset protection trusts. But they do so to the detriment of the integrity of the world financial system and such behaviour is no longer acceptable. Money laundering and the misuse of corporate vehicles for tax evasion and other ways of exploiting financial markets for personal gain have expanded to the point where they threaten the political and economic interests of sovereign states. It is time for the governments of countries where such practices are prevalent to accept their responsibilities and crack down on them – or face the consequences."

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The growing tension between Liechtenstein and Germany over tax evasion has highlighted the difficulty large countries have in keeping wealthy people from parking money in tax havens provided by smaller states and territories.

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Sen. Carl Levin is opening an investigation into whether U.S. citizens are hiding assets in banks in Liechtenstein to evade taxes after a German probe found widespread abuse.

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19/02/2008 - Disclosures concerning alleged widespread tax evasion by German citizens through Liechtenstein highlight a much broader challenge in today's globalised economy: how to respond to countries and territories that seek to profit from tax dodging by residents of other jurisdictions.


"This is a fundamental issue in our increasingly interdependent world," OECD Secretary-General Angel Gurría commented.


OECD countries and a number of co-operative financial centres have been working together for a number of years to address the problems posed by anti-competitive tax practices, both in OECD countries and offshore, by developing standards of transparency and exchange of information in tax matters that balance the interests of financial privacy with the need for countries to be able to enforce their own tax laws.

Despite these efforts, however, a few jurisdictions still fall short of best-practice standards, effectively providing a basis for illegal tax evasion on the part of some of their customers.


In 2002, OECD published a list of un-cooperative tax havens, initially including seven countries. Several have now made commitments to work with OECD and its partners to improve transparency. But three remain on the list: Andorra, Monaco and Liechtenstein.


"As long as there are financial centres that refuse to co-operate in bilateral tax information exchange and that fail to meet international transparency standards, residents in other countries will continue to be tempted to continue to evade their tax obligations," Mr. Gurría commented.


"The openness of the global economy can only be sustained if participants assume mutual responsibilities, as well as sharing benefits. Excessive bank secrecy rules and a failure to exchange information on foreign tax evaders are relics of a different time and have no role to play in the relations between democratic societies," he stated.


For further information, please contact Nicholas Bray, OECD's Media Division (tel. 33 1 4524 8090).

Source : OECD

"And it’s time to shed some sunlight not only on companies that abuse the tax code, but also on the secretive offshore tax havens that shelter them. We’ll create a list of countries where tax evaders hide their income and cost America untold billions of dollars every year. We’ll lead the international community to new standards of information sharing. And we’ll penalize companies and individuals who use those havens and illegally evade their tax obligations. "
(...)
"To ensure that we are fiscally responsible, we’ll gain revenue by shutting down corporate loopholes and tax havens."

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Vaduz, 15.2.2008 - As announced today by LGT Group, there are indications that client data stolen from LGT Treuhand AG in Vaduz has been unlawfully disclosed. The theft of this data was registered as a criminal offence and a court sentence was passed in 2003. Clients, who have a business relationship only with LGT Bank (and not with LGT Treuhand AG), as well as all client relationships established from 2003 onwards with companies of LGT Group, are not affected by this theft of client data.

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The chief executive of Deutsche Post is under investigation for tax evasion throug Liechtenstein.

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Reuters quoted Sen. Carl Levin who said it would become easier for federal authorities to pursue possible tax evaders by putting more onus on them to show that offshore shelters are legitimate. "It's got to end, and it's going to take a change in the law," Levin said at the Reuters Regulation Summit

Levin; Obama, an Illinois Democrat who is campaigning for his party's nomination for president; and Sen. Norm Coleman, a Republican from Minnesota, last year introduced a text to crack down on tax evasion strategies : the Stop Tax Haven Abuse Act.

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“It is inexcusable that the entire market value of a financial institution can be placed at risk by such abject carelessness on the part of a leading European bank, that that institution failed to heed the warnings of a significant market counter-party and failed to learn the lessons that rogue traders have taught us about the checks, balances and controls that must be in place for risk to be effectively managed and controlled.”

Charlie McCreevy, EU’s internal market commissioner (Quoted by the FT)




It is all the more inexcusable than the bank like the other banks has beatiful web pages on risk management, corporate social responsibility, compliance, deontology, ethics... that turned out to be charade.

Banks are no longer reliable and trustable in their CSR that turned out to be charade.

Nobody raised the point : but we have competitors behaving as vultures.