Ethics and governance in the European Financial centers

The ABBL recently issued a press release.


A couple of sentences are worth commenting.

LFF recently decided to develop a tool that should allow all concerned stakeholders to counter common prejudices and misconceptions about the Luxembourg financial centre. In the form of an FAQ, the tool in question will not only provide a set of ready-to-use answers for less defensive questions concerning, for example, Luxembourg’s vision for the future of its financial centre, but also effective responses to ill-informed accusations, such as those relating to the country being a tax haven that favours tax evasion; accusations that are still all too frequently levelled against Luxembourg

“ill-informed accusations” they state.

They do not analyse the reason why Luxembourg is said to be a tax haven to correct the dysfunctions:

• Why in this tiny jurisdiction the penal liability of legal persons does not exist?
• Why in this tiny jurisdiction balance sheets are not made public in a database?
• Why in this tiny jurisdiction anybody can be a statutory auditor including exotic firms from the BVI, the Seychelles and so on, that are not controlled?
• Why in this tiny jurisdiction ethics is not part of CSR, which is limited to promotion actions?
• Why in this tiny jurisdiction those who dare question on the dysfunctions are repudiated?
• Why in this tiny jurisdiction the PSF status is used by some firms, and especially confidentiality, to prevent the manifestation of the truth before the justice by intimidating former employees with a complaint even though the testimony is fair?
• Why in this tiny jurisdiction, bogus professionals, that are neither regulatory auditors nor chartered accountants, go on creating firms that are actual scams?
• Why in this tiny jurisdiction professionals who demonstrate their poor ethics and governance while having financial resources remain reputable and competent for the fellow members of their business networks?
• Why in this tiny jurisdiction money from foreign taxpayers is accepted without control, which was admitted by the former chairperson of the ABBL?
• Why is this tiny jurisdiction parliamentary parties agree quickly to change the constitution against the Grand Duke while tergiversating to implement all the international recommendations (AML, fight against corruption)?
• Why is this tiny jurisdiction the fourth estate is the financial sector that influences the political decision-making process?
• Etc.

These are not “ill-informed accusations” as all sources are public or official.

These have been building Luxembourg as tax haven for many years.

By ignoring the lax business environment that is attractive for fraudsters, LFF is not credible.


As I already wrote, banking secrecy and low taxes are criteria of tax haven. But the determining criterion is permissiveness, which is definitively met in Luxembourg, a small jurisdiction of 2500 Km2 where dysfunctions are visible but denied.

Give them a couple of months to go on like that. And look them go bust.