Ethics and governance in the European Financial centers

The last days demonstrated that governmental policies to fight tax haven are driven by politics with its procession of compromising, cowardice, blackmail, etc.

It is naive to await OECD or G20 or UN or any other international organization of governments that they build a relevant list of tax havens as it is in fact like self-regulation : everyone saw the inefficiency self-regulation with the financial crisis.

That is the reason why a non governmental body like Transparency International should take the initiative to define criteria taking into consideration every matter (tax practices, corruption, money laundering…).

Le Temps has reported that Jean Claude Juncker raised the question of the Territories of the Crown - Jersey, Guernesey, island of Man, Cayman Islands - at the EU Summit. I fully agree with him.

So are in agreement as well all those who raise objectively the question of tax havens.

But if I were Prime Minister Juncker, to be coherent, I would control much better the set up of companies in Luxembourg. There are many exotic firms in the Luxembourg Corporate Registration, including from jurisdictions like the BVI were authorities need not be informed of the identity of the IBC's shareholders or directors.

Most of these Luxembourg-registered firms are definitely scams that harm the reputation of the Luxembourg financial center.

The AFP has reported that Prime Minister Juncker told journalists that French President Nicolas Sarkozy and (German Chancellor) Angela Merkel let him be known that France and Germany would not agree to Luxembourg, Austria or Belgium being put on a tax haven list.

It will be interesting to follow up the evolution of the legislations relating to banking secrecy in the three jurisdictions.

Although the three countries recently said that they would ease their banking secrecy rules to avoid being put on the international blacklist, I cannot see any legislative action to adapt their national law, which should have been a minimum to prove the commitment to relax banking secrecy prior to the G 20.

Which is the utility to implement commitments? The promises engage only those which believe them.