Ethics and governance in the European Financial centers

Pensylvania and Montana have qualified Luxembourg as a tax haven in their legislation.

Penlyslavia defines a tax haven as "a jurisdiction that at the beginning of a taxable year is a tax haven as identified by the Organization for Economic Co-operation and Development, plus the sovereignties of Bermuda, the Cayman Islands, the Bailiwick of Jersey and the Grand Duchy of Luxembourg."



Montana

Pensylvania

PwC has developed an Anti-Money Laundering: Know Your Customer quick reference guide.

This excellent work is a quick and easy way of comparing anti-money laundering issues for nearly 50 countries and includes additional links to useful information such as Financial Action Task Force (FATF) reports and country evaluations.

Know more

PwC Luxembourg last week published a surprising press release focusing on the growth but with keyword missing : ethics, deontology.

In the press release PwC emphasizes the involvement in CSR (Corporate Social Responsibility) but the keyword stakeholder is quoted neither in the core text of the press release nor in the core text of the 2007 Annual Review Luxembourg (it is in the note to the editor in a standardised text but for the client's stakeholders).

Who are the addressees of an audit report? Who must have confidence?

According to PwC Luxembourg : the clients (see title of the press release : "Our clients’ confidence is the cornerstone of our profession”).

But they forget that the actual addressees of an audit report are the investors, the market ... In other words the stakeholders that do not have the commercial relationship with the auditor.

Stakeholders’ confidence is the cornerstone of the audit profession.

The title of the press release focusing on clients who pay for the audit unfortunately demonstrates that the basics of CSR are not understood : being involved in socially responsible efforts is a good thing but this is definitely not enough.

Let's read some definitions of CSR :

"There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." (Milton Friedman, Friedman (1962). Capitalism and Freedom. University of Chicago Press. ISBN 0-226-26421-1.)

"Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" (WBCSD (2000). Corporate Social Responsibility: Making good business sense. World Business Council for Sustainable Development. ISBN 2-94-024007-8)

A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (...) An important aspect of CSR is how enterprises interact with their internal and external stakeholders (employees, customers, neighbours, non-governmental organisations, public authorities, etc.) " (Commission Green Paper 2001 “Promoting a European Framework for Corporate Social Responsibility”, COM(2001)366 Final)




See press release
Annual Review