Ethics and governance in the European Financial centers

I went through the "Mémorial C" in Luxembourg to see to what extend exotic jurisdictions are connected to Luxembourg-registered companies, with the view to determine whether situations met may be a scam involving a number of economic entities including legal persons located in risky far jurisdictions like the Seychelles, the BVI..., or simply are the creation of a company that optimise tax at an international level. One may criticize tax optimisation but that was not my concern in the assessment.

To determine dubious situations for the reputation of the Luxembourg jurisdiction, a couple of "red flags" should be taken into account :

I. ABOUT THE LUXEMBOURG-BASED COMPANY

Is it a sector of money laundering?
Is there a twin company: same or similar object, same individuals?
Does the object allow the company to act at an international level?
Is the managing director non compliant with the requirement of every guaranty of irreproachable conduct as stated by the legislation (especially an individual that was proved to have used without shame for private expanses the money of a previous company he worked for cannot be appointed managing director and/or administrator as he/she may start again what may be called "unauthorized use of corporate property")?
Is there a turnover of administrators?
Is there a turnover of statutory auditors?
Is the statutory auditor not a chartered auditor member of the IRE or or chartered accountant member of the OEC i.e. not controlled by these organisations?
Is the company only quoted in the corporate registration with no visible economic reality (an office mentioned in the yellow pages, a website, employees, brochures, Ads...)?

These items are not exhaustive. Each answer "yes" is a red flag.

II. ABOUT THE EXOTIC-BASED COMPANY

Is the company acting as the statutory auditor of the Luxembourg-based company?
Does the company appear recently in the Corporate Registration in Luxembourg?
Is the company only quoted in the corporate registration with no visible economic reality (an office mentioned in the yellow pages of its jurisdiction, a website, employees, brochures, Ads...)

These items are not exhaustive. Each answer "yes" is a red flag.


The more "yes" are observed, the more the fraudulent situation is built.

Many dubious situations are visible in the "Mémorial C" and are a risk for the reputation of Luxembourg because we are no longer in a question tax optimisation that may be defended. Dubious companies should not be accepted anymore. Time is up to separate the wheat from the chaff, and to not forget hearing before the US Senate a couple of weeks ago with the new state of mind that can be summarized in a couple of words: "Billions and billions of dollars worth of U.S. assets find their way into these secrecy tax havens, aided by banks, trust companies, accountants, lawyers, and others. (...) Tax havens are engaged in economic warfare against the United States ".