Ethics and governance in the European Financial centers

Reuters has reported that a Luxembourg court ordered Swiss bank UBS to disclose some confidential documents within eight days or face a fine of 250 euros ($313.40) per day up to a maximum of 250,000 euros.
May be UBS will appeal the Luxembourg court order, like in the Oddo order case.

As observes Global Financial Integrity, The introduction last Monday of The Stop Tax Haven Abuse Act, which would “restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation” by Senator Carl Levin (D-MI) represents a crucial step towards improving U.S. tax assessment and collection and strengthening the global financial system.
The Stop Tax Haven Abuse Act is similar to a previous bill, S. 681, introduced by Senator Levin in 2007 and cosponsored by then-Senator Barack Obama with 3 significant new additions that would:
(1) treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes;
(2) close an offshore tax dividend loophole that enables offshore hedge funds and others to dodge payment of U.S. taxes on U.S. stock dividends; and
(3) expand the tax return reporting requirements for passive foreign investment corporations (PFICs) to include U.S. persons who don’t own a PFIC, but have formed, sent assets to, received assets from, or benefitted from a PFIC.

The jurisdictions that are considered as tax havens are :
Anguilla
Antigua and Barbuda
Aruba
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Gibraltar
Grenada
Guernsey/Sark/Alderney
Hong Kong
Isle of Man
Jersey
Latvia
Liechtenstein
Luxembourg
Malta
Nauru
Netherlands Antilles
Panama
Samoa
Singapore
St. Kitts and Nevis
St. Lucia
St. Vincent & the Grenadines
Switzerland
Turks and Caicos
Vanuatu

Delaware is missing.

The bill:

• Establish presumptions for entities and transactions in Offshore Secrecy Jurisdictions.
• Determine “Offshore Secrecy Jurisdictions.”
• Authorize special measures against foreign jurisdictions, financial institutions, and others that impede U.S. tax enforcement.
• Treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes;
• Allow more time for investigations involving Offshore Secrecy Jurisdictions;
• Increase disclosure of offshore accounts, transactions, and entities;
• Prevent misuse of foreign trusts for tax evasion;
• Limit legal opinion protection from penalties with respect to transactions involving Offshore Secrecy Jurisdictions;
• Close the offshore dividend tax loophole;
• Increase penalty for failing to disclose offshore holdings;
• Require anti-money laundering rule for hedge funds;
• Apply anti-money laundering obligations to company formation agents;
• Strengthen John Doe summons use in offshore tax cases;
• Strengthen foreign financial account reporting requirements;
• Strengthen tax shelter penalties;
• Deter financial institution participation in abusive tax shelter activities;
• Strengthen law enforcement through information sharing;
• Require tougher tax shelter opinion standards for tax practitioners

“This is a pivotal time in global finance,” said Baker. “From the European Commission’s recent adoption of measures to improve cooperation between EU member states and increase transparency in tax assessment and collection to the G-20’s stated intent to crack down on tax havens when they meet in April, calls around the world are growing for definitive action on the problem of tax havens. This bill will ensure parity in U.S. tax remittance while strengthening overall global finance by increasing transparency and accountability.”

Stop Tax Haven Abuse Act : Summary

Stop Tax Haven Abuse Act (full text)

The Wort has reported that members of the Chambre des Députés in Luxembourg are today in Paris to meet their colleagues in order to support the financial center of Luxembourg by discussing what they think is misunderstanding.

Their concern is not to correct the reason why Luxembourg is perceived a a tax haven, banking secrecy and law tax being not determining in themself.

What is determining is the deep culture of professionals and politicians as expressed by the head of the ABBL :
- former head Lucien Thiel, for whom it is not the duty of the center to verify is the taxpayer was honest : he is one of the delegates in Paris,
- current head Jean-Jacques Rommes, for whom when clients are committing fraud it is not the banker who started : but the banker was helpful to commit fraud and went even further by proposing a scam through the jurisdiction of Panama.

They definitely never ever repudiated the recurrent behaviour of Luxembourg bankers in favor of fraud and foreign fraudsters.

Recurrent, as demonstrated the German TV and more recently the Belgian TV.

And this is the way the center have been growing for years. The use of secrecy to commit fraud as well as the abusive use of secrecy for actions of obstruction to justice.

This is the reason why Luxembourg is definitely a "tax haven". Not because of banking secrecy and low taxes. But because of a business culture on the field with one single rule : business over ethics.