Ethics and governance in the European Financial centers

 Should Luxembourg has been proactive by a handing-over in question the last years, it would have avoided the current risks that harms the sustainability of the country.

One cannot deny the will of Luxembourg to sign agreements, but one can be only septic on the effectivity. The interpretation given by Luxembourg of Article 26 of the OECD Model Tax Convention on Income and on Capital is not the one of OECD recalled by Pascal Saint Amans, Head of division for the co-operation and tax competition: as recalled by Luc Frieden and as stated in the press releases, Luxembourg will requires evidence to provide with information v. for Saint Amans the name of a person suspected of fraud will be sufficient. That promises interesting litigations. When OECD and the States that are victims of evasion realize that the exchange is a charade, they might be angry to have been fooled..

The European Commission has just referredLuxembourg to the European Court of Justice over its incorrect application of the Savings Tax Directive

Nothing was done to correct the legal and regulatory framework  but also the business environmenet which allowed the Madoff fraud in Luxembourg. One can defend discretion on the dysfunctions (I do), in so far as the corrective actions follow: however in Luxembourg no corrective action is taken in the event of  ethical dysfunctions whatever matter. There are undoubtedly other situations of nonconformance with Directive UCITS with a related risk for the investors, who discover a country risk for the client.

Nothing was done to eliminate scams despite many "red flags".

What I am saying is not against Luxembourg but against a way of doing business that harms the ethical credibility and therefore the sustainability of the jurisdiction that deserves to be a respectable jurisdiction in the European Union.

But for that the governance wants brushing up and a cultural change is required. A small jurisdiction cannot afford a poor governance as dysfunctions are empasized in a world of communication and transparency.

I am afraid the communication the day before yesterday demonstrates that nothing has changed. The leader that stated that "it is not ou duty to control if the taxpayer was honest" and that is a founder of the LIGFI, showed the true colours. Luxembourg does not care of the European Union as it does not want to implement the Savings Directive that envisages the automatic exchange of information : what counts is that Luxembourg is not disadvantaged and no matter if other Member States are.