Ethics and governance in the European Financial centers

Sofia Dimoulis wrote an interesting analysis about Luxembourg.

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As I already explained last year, the CSSF in Luxembourg is not transparent enough on dysfunctions and does not sanction professionals in a credible way.

The only public information relating to sanctions is provided by the annual report in its 9th chapter.

Let’s see is stated in the 2007 report that was released this week.
First of all, the 2007 report is currently only available in French. Reports were available in English the previous years.
Chapter 9 describes the disciplinary actions undertaken by the CSSF in 2007.
It can be summarised in one word: nothing, except for 7 professional that were not authorised to do business.

Does that mean that the CSSF is doing nothing? Definitely not, but the way it does its duty is not strict enough to clean the financial center and make the requirement of professional standing and qualification a reality.

The UK Chancellor of the Exchequer chaired a meeting of FATF Ministers in Washington DC a few days ago.
The Ministers discussed the work of the FATF in the international fight against money laundering and terrorist financing. They also endorsed a revised mandate for the FATF, which determines its direction and priorities between 2008 and 2012. The new mandate:

- Deepens global surveillance of evolving criminal and terrorist threats identified by the FATF;
- Responds to new threats which affect the integrity of the financial system such as proliferation finance;
- Builds a stronger, practical and ongoing partnership with the private sector which is at the frontline of the global fight against money launderers and terrorist financiers; and
- Supports global efforts to raise standards, especially in low capacity countries.

Source : FATF website

FATF new mandate

In 2007, the Money Laundering Reporting Office (MROS) received a total of 795 SARs (619 in 2006), which amounts to a 28.4 % increase over last year’s figure. It is also the third highest reporting volume observed since 1998, the year when MROS began gathering statistics on incoming SARs.

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Read annual report (dated April 2008)

On 25 February, BVI FSC published 3 new documents related to Anti-Money Laundering legislation. The documents were gazetted on February 22, 2008. The largest document, including 127 pages, is Anti-Money Laundering and Terrorist Financing Code of Practice, 2008.

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In the context of the fraud through Liechtenstein, a note to journalists was published. This note is intended to provide background information on the recent tax evasion affair in Germany that appears to involve a large number of German residents who have taken advantage of Liechtenstein’s secrecy rules and its failure to co-operate with other countries in tax matters.


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Liz Moyer and Tatyana Shumsky from Forbes have recenttly published an article relating to the World's Top Tax Havens
They observe that traditional venues like Switzerland, the duchies of Lichtenstein and Luxembourg and Caribbean paradises like the British Virgin Islands are finding competition from the U.S., where lawyers in seven states, such as Nevada and Alaska, are muscling in, looking to grab business from the world's wealthy

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The FATF recently revised its Methodology for Assessing Compliance with the FATF 40 + 9 Recommendations. It is the methodology followed in the mutual evaluation program to assess countries’ anti-money laundering and counter terrorism financing (AML/CFT) systems.

Read revised methodology