Ethics and governance in the European Financial centers

Prime Minister Juncker was on the French radio this morning.

He wished the end of offshore centers as offshore centers “are an evil” and must be rolled. He said he was in favour of more transparency and confirmed that Luxembourg will accept the OECD standards.

The Narcotics Control Strategy Report on Luxembourg states that Luxembourg is an offshore financial center. This is as well what sells many “fiduciaries” in Luxembourg.

And this is true, because many Luxembourg-registered companies are linked to exotic jurisdictions that do not have the same standards of controls as Luxembourg. They are used for scams.


In a nutshell by combining what officially states the Narcotics Control Strategy Report on Luxembourg and Prime Minister Juncker’s statement, Luxembourg is an evil, unless it actually corrects the offshore abuses through Luxembourg.



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Luc Frieden went to the USA to explain the Luxembourg views on taxes.


The wording of the press release is worth reading between the lines:

Le ministre Frieden a tenu à informer les responsables du ministère des Finances américain et de l’administration fiscale de la nouvelle position luxembourgeoise en matière d’échange d’informations sur demande conforme aux standards de l’OCDE.
(Minister Frieden made a point of informing the persons in charge of the American Ministry of Finance and the tax administration of the new Luxembourg position as regards information exchange on request in conformity with the standards of OECD.)

“made a point of informing”: by using this expression, Luxembourg shows the weakness of the jurisdiction as it relates to the USA.
“the new Luxembourg position” : it means that Luxembourg did not comply with the standards of OECD before and therefore was a tax haven.

Les autorités américaines ont salué la volonté de coopération du Luxembourg dans la lutte internationale contre la violation des lois fiscales
(The American authorities welcomed Luxembourg’s will of cooperation in the international fight against the violation of tax laws.)

“the will of cooperation”: by using this expression, Luxembourg shows the weakness of the jurisdiction as it relates to the USA. For example someone guilty “cooperates” with the police. Should Luxembourg be in a strong position, a word like “commitment” would have been used: “The American authorities greeted the commitment of Luxembourg…”

Le ministre Frieden a également rencontré des membres des deux Chambres du Congrès américain pour les convaincre que le Luxembourg ne devrait figurer sur aucune des listes qui figurent dans certaines propositions de loi actuellement en discussion au Congrès américain
(Minister Frieden also met members of parliament to convince them that Luxembourg should not be listed on any of the lists which appear in some bills currently under discussion before the American Congress.)

“to convince them” : it is not said members of parliament were convinced, exactly like French MPs.

Bob Bauman has reported that Senator Max Baucus will support an alternative text to the "Stop Tax Haven Abuse Act" that was introduced by Senator Carl Levin.
Both senators are Democrats. Max Bocus chaired the Senate Finance Committee.

This story demonstrates that like in the European Union, politics that in influenced by lobbies, decide of policies.

But if I were the leaders of a place as Luxembourg I would not be jubilant: the Madoff case showed and wil show large deficiencies in the juridiction, admitted by the head of the CSSF.