Ethics and governance in the European Financial centers

As observes Global Financial Integrity, The introduction last Monday of The Stop Tax Haven Abuse Act, which would “restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation” by Senator Carl Levin (D-MI) represents a crucial step towards improving U.S. tax assessment and collection and strengthening the global financial system.
The Stop Tax Haven Abuse Act is similar to a previous bill, S. 681, introduced by Senator Levin in 2007 and cosponsored by then-Senator Barack Obama with 3 significant new additions that would:
(1) treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes;
(2) close an offshore tax dividend loophole that enables offshore hedge funds and others to dodge payment of U.S. taxes on U.S. stock dividends; and
(3) expand the tax return reporting requirements for passive foreign investment corporations (PFICs) to include U.S. persons who don’t own a PFIC, but have formed, sent assets to, received assets from, or benefitted from a PFIC.

The jurisdictions that are considered as tax havens are :
Anguilla
Antigua and Barbuda
Aruba
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Gibraltar
Grenada
Guernsey/Sark/Alderney
Hong Kong
Isle of Man
Jersey
Latvia
Liechtenstein
Luxembourg
Malta
Nauru
Netherlands Antilles
Panama
Samoa
Singapore
St. Kitts and Nevis
St. Lucia
St. Vincent & the Grenadines
Switzerland
Turks and Caicos
Vanuatu

Delaware is missing.

The bill:

• Establish presumptions for entities and transactions in Offshore Secrecy Jurisdictions.
• Determine “Offshore Secrecy Jurisdictions.”
• Authorize special measures against foreign jurisdictions, financial institutions, and others that impede U.S. tax enforcement.
• Treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes;
• Allow more time for investigations involving Offshore Secrecy Jurisdictions;
• Increase disclosure of offshore accounts, transactions, and entities;
• Prevent misuse of foreign trusts for tax evasion;
• Limit legal opinion protection from penalties with respect to transactions involving Offshore Secrecy Jurisdictions;
• Close the offshore dividend tax loophole;
• Increase penalty for failing to disclose offshore holdings;
• Require anti-money laundering rule for hedge funds;
• Apply anti-money laundering obligations to company formation agents;
• Strengthen John Doe summons use in offshore tax cases;
• Strengthen foreign financial account reporting requirements;
• Strengthen tax shelter penalties;
• Deter financial institution participation in abusive tax shelter activities;
• Strengthen law enforcement through information sharing;
• Require tougher tax shelter opinion standards for tax practitioners

“This is a pivotal time in global finance,” said Baker. “From the European Commission’s recent adoption of measures to improve cooperation between EU member states and increase transparency in tax assessment and collection to the G-20’s stated intent to crack down on tax havens when they meet in April, calls around the world are growing for definitive action on the problem of tax havens. This bill will ensure parity in U.S. tax remittance while strengthening overall global finance by increasing transparency and accountability.”

Stop Tax Haven Abuse Act : Summary

Stop Tax Haven Abuse Act (full text)

Europe's Commissioner for Taxation Laszlo Kovacs has blasted Austria's banking secrecy laws and urged Vienna to lift them or face consequences, in an interview with an Austrian magazine.

"Banking secrecy should not protect fraudsters," Kovacs told the weekly Format in an interview to be published on Friday.
"It is unacceptable that banking secrecy in one (EU) member state can hamper the tax authorities of other member states," he added.

Kovacs warned of serious consequences if Austria did not lift its banking secrecy soon, as other states have already done.

Austria is supported by Luxembourg, that should be warned in the same way as both states were recently in agreement to refuse. On 25 February, Luxembourg minister for justice and budget Luc Frieden said in Austria that Luxembourg and Austria were ready to take part constructively in a discussion in the EU and the OECD [Organisation for Economic Co-operation and Development] on how to improve international co-operation on cross-border tax evasion, but banking secrecy is not up for negotiation.

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John Cummings has reported that American senators want that the Obama administration’s fiscal year 2010 budget to include an array of measures aimed at shutting down what they describe as “offshore tax abuses".

Levin clearly sees an opportunity to ride a wave of outrage over the deployment of the Troubled Asset Relief Program. Many of the firms listed in a GAO report are TARP recipients. For example, Morgan Stanley, which has 273 subsidiaries in tax havens or financial privacy jurisdictions such as the Cayman Islands, Luxembourg, and the Marshall Islands, has received $10 billion from the fund. Citigroup, with 427 subsidiaries in such jurisdictions, and Bank of America with 115, have each received $45 billion"