Ethics and governance in the European Financial centers

OECD today stated that Luxembourg moves into the category of “Jurisdictions that have substantially implemented the internationally agreed tax standard.”.

OECD Secretary-General Angel Gurría said: “I commend Luxembourg for its swift implementation of the OECD standards on exchange of information. In three months, Luxembourg has turned into reality its commitment to fully cooperate in tax matters. I would like to congratulate Minister Luc Frieden for his leadership in this process".

Austria and Switzerland will appreciate.

Parliament did not vote yet to confirm every agreement and nothing is actually enforced as the agreements start for data as of 2010.

The press realeases from Luxembourg stated that “The protocol envisages the information exchange on request in individual cases between the tax authorities of both countries. It applies to the financial years 2010 and following. The agreement does not have as an aim an automatic exchange of banking information and does not authorize general requests (fishing expeditions)"

Pascal Saint Amans from the OECD quoted by L'Expansion specified that "Il faudra seulement fournir l'identité d'une personne soupçonnés de fraude, et c'est tout" (free translation : it will only be required to provide with the identity of a person suspected to commit fraud and that's all)

This is not what many bankers in Financial centers understood.

I think the OECD is beeing fooled.

See new OECD list

The Irish Independent has reported that  a record number of litigants will seek to have cases heard this week in the Commercial Court, which was set up five years ago to fast track multi-million euro business disputes.

This special court, which became operational in January 2004, heralded a new approach to commercial litigation in Ireland. It was set up to send a message to the world that Ireland is a good place to do business and resolve costly disputes

Among the applications will be attempts to sue Dublin-based Thema International Fund plc, which invested with disgraced US "Ponzi Prince" Bernard Madoff.

The United Kingdom and France intend to cooperate closely to confront the political, economic and security issues of the 21st century. Pursuit of the reform of the governance of international institutions is a necessity if they are to be made more capable of meeting the challenges raised by international security and responding to the global economic crisis and under-development.

As far as financial centers are concerned there are a couple of paragraphs (keywords in bold):

France and the United Kingdom will also address the task of implementing the decision of the G20 concerning uncooperative jurisdictions and remain vigilant in ensuring that the 42 countries on the OECD “grey list” meet their commitment to apply international standards for the exchange of tax-related information. It is essential that we maintain the momentum set by the London Summit. We are therefore clear that where jurisdictions have not reached the standard of information exchange agreement by March 2010, they should be subject to coordinated international counter-measures agreed in London. Both our countries also stress the importance of combating tax evasion and undertake to combine our efforts to reinforce the coherence and effectiveness of international action in this domain. We agree that the threshold of 12 tax information exchange agreements should be seen as a starting point in the move towards greater tax transparency. If progress stalls we will expect the threshold to rise above 12, bringing those who have not made further progress back into the “grey list”. We will work together through the G20 to ensure that proposals are developed by the time of the next G20 Summit to ensure that developing countries can benefit from the new cooperative tax environment, including through a new multilateral tax information exchange agreement. We also call on the OECD to look at country by country reporting and the benefits of this for tax transparency and reducing tax avoidance.

The United Kingdom and France welcome the work underway to consider how the Global Forum on transparency and exchange of tax information can fully involve developing countries as equal participants and reform its governance, including to establish an effective peer review process to ensure effective implementation of the international standards, ahead of the Pittsburgh Summit. Successful development of this type of arrangement in the area of tax havens could provide a model for other areas where the OECD has a particular contribution to make to responding to global challenges.

France and the United Kingdom acknowledge the work undergone by the Financial Action task force (FATF) to revise and reinvigorate the process aiming at identifying uncooperative jurisdictions and call the FATF to proceed swiftly with its new review process in order to publicly name the jurisdictions that pose risks to the integrity of our financial system and apply counter measures where necessary.

The fight against non-cooperative jurisdictions should also encompass prudential regulations. We call on the FSB to swiftly assess jurisdictions against international supervisory and prudential standards and report back by September on their progress in identifying uncooperative jurisdictions.