Ethics and governance in the European Financial centers

Yesterday Czech Finance Minister Miroslav Kalousek, whose country currently holds the EU presidency, said he personally wanted to apologize to EU nations on the OECD list because "in no way are they non-cooperative jurisdictions or tax havens" and it was not fair to put them on the list.

As I said, banking secrecy is not a problem in itself. The problem is the use of it. Even so low taxes are not a problem in themselves. The problem is the lax framework of the jurisdiction.

The European Union was neither intended for some jurisdictions to trap finances of the others nor to provide these jurisdictions with a kind of impunity and untouchability.

 It  is because of this feeling of impunity and untouchability thanks to their memberships to organisation (OECD, European Union…) that the EU nations on the list were so upset.

I was just wondering about the reasons why the Czech Republic condones that there are jurisdictions in the European Union that are a problem, and especially Luxembourg, not only because of banking secrecy, but as well and above all because of a lax environment compared to other European jurisdictions including Belgium and Austria.

Unless one finds it normal that, like in Luxembourg, in a small jurisdiction where everybody knows everyone:

-          the corporate registration is full of companies with no economic reality and/or exotic statutory auditors or firms,

-          banks knowingly help to commit fraud especially since the Liechtenstein scandal without being officially repudiated,

-          business ethics does not exist in the vision of CSR,

-          transparency is not sought : some key databases donot exist (balance sheet database, judiciary judgements) compared to other jurisdictions

-          leaders, either politicians or professionals, do not question the demonstrated dysfunctions: they show their psittacism as they repeat  “Luxembourg is not a tax haven” while they keep silence on the above issues.

-          etc.

Why does the Czech Republic condone that?

There may be one good reason for the Czech Republic: BU-SI-NESS.

“Czech Open Days” are taking place today in Luxembourg at the Chambre de Commerce.

The event was in the pipe early this year prior to the G 20: