Ethics and governance in the European Financial centers

On 14 April 2002, the OECD was pleased to announce that Panama has made a commitment to improve the transparency of its tax and regulatory systems and establish effective exchange of information for tax matters with OECD countries by 31 December 2005.


We know that this commitment was a charade and the jurisdiction was qualified “tax haven" early April 2009.



What a Panama Law firm is saying is worth analysing, as it is representative of the state of mind in most jurisdictions that are on the OECD grey list:


“Get your money out now! The ones who get out first, get out with the most on the best of all possible terms. Open offshore corporations, foundations, bank accounts and stock brokerage accounts now before it is too late and you will be prevented from doing so or penalized for doing so. The USA constitution, if they still use that up there, prevents retroactive laws. They should grandfather your offshore structures in and allow you to keep them. If they impose a tax on money going offshore in the near future you will escape this since your money would have been moved before any such tax is made into law. If they tax money coming back into the USA, just leave it outside. You can buy real estate offshore. You can open stock brokerage accounts offshore. You can open businesses offshore. Start to think globally like they do.”

Switzerland is very angry against the OECD.
By trying to please everyone the OECD is now caught in its own trap of kindness and political games.
Its credibility is now in question.

As I wrote in my second letter to Angel Gurria, the solution is simple: if States that do not have signed yet the required agreements are not happy with the OECD, let them leave.

Considering the ridiculous amount of their contributions to the OECD budget, it will quickly be compensated by the advantages for the other States to recover funds escaped in the jurisdictions.

As far as Switzerland is concerned, I had warned Hans Rudolf Merz’s services to beware of Luxembourg, as Switzerland is more credible than Luxembourg in the implementation of the international recommendations in business ethics.

This is what I explained in two articles in French published in Banque & Finance in Switzerland:
"Suisse ou Luxembourg: quelle est la place la plus crédible en matière d’éthique?" (January 2007)
“La Suisse est-elle un paradis fiscal?" (septembre 2008) http://www.banque-finance.ch/numeros/93/70.pdf

My conclusion is that despite banking secrecy and low taxes in Switzerland I can see in this jurisdiction a positive framework in favor of business ethics that I cannot see in Luxembourg.

The political error of the Swiss authorities was (and still is) to bet on Luxembourg to advocate their positions within the European Union without seeing that Luxembourg was a manipulator.

The political error of the Luxembourg authorities was (and still is) to ignore what the other jurisdictions are doing, otherwise they would have realised that ratios to compare Luxembourg with other jurisdictions are definitely not in favour of Luxembourg, whose figures are not credible :
- number of disciplinary actions for auditors : ex Luxembourg v. Belgium
- number of declarations of suspicion : ex Luxembourg v. Monaco
- …

In a democracy when political authorities fail, there is a solution.

The OECD published a letter that Angel Gurria sent to Hans-Rudolf Merz on 2 April 2009.
Page 2 of this letter Angel Gurria writes that he informed that "there were no new criteria" and the OECD was "not reporting jointly with the FATF".

I cannot understand the reason why Angel Gurria had to confirm that the the OECD was "not reporting jointly with the FATF".

Why was it important to disconnect tax evasion and money laundering, that are however clearly linked?

Does the OECD fear jurisdictions that contribute with peanuts to the OECD budget?