Ethics and governance in the European Financial centers

The Minister of Justice in Luxembourg recently published the Annual Report 2007.
There are a couple of pages relating to AML (pages 136 to 140).

As I already wrote, the FIU in Luxembourg is the prosecuting authorities and does do a good job that limit the risk of scandal in a lax business environment where issues are hidden or hushed up.

If the number of declarations of suspicion in Switzerland increased, this is not the case in Luxembourg despite the center is growing.

Year Number Percentage
1998 114 2,08
1999 109 1,99
2000 158 2,88
2001 413 7,54
2002 631 15,11
2003 828 15,11
2004 943 17,20
2005 831 15,16
2006 754 13,76
2007 700 12,77
Total 5481 100


To assess the lax environment one must take into account the financial power of the Center and not the size of the country.

The ratio in Luxembourg compared to Switzerland demonstrates the lax business environment, what is called locally prag-ma-tism.

Read report (in French)

Xavier Bettel, who is member of parliament in Luxembourg has recently asked a parliamentary question relating to the absence of publication online of judiciary cases in Luxembourg compared to other countries.
I dont know what the minister is gonna answer but the actual answer is simple : in Luxembourg leaders either professionals or politiciens do not like transparency on issues that are either hidden or hushed up.

Evidences ?

- No TI chapter in Luxembourg compared to Switzerland and the UK,
- no involvement of the Luxembourg big four entities in international surveys of their brand relating to fraud or corruption : for example "Global Economic Crime Survey" for PwC and "Corruption or compliance – weighing the costs" for E&Y
- CSR without ethics in Luxembourg compared to Switzerland and the UK
- etc.

Xavier Bettel's question

A German TV channel wanted to know if German banks would agree to discreetly move money of clients having an account in Liechtenstein towards Luxembourg ; according to a documentary diffused last Monday evening, three banks reached at the request of a journalist playing the prospective client.
The adviser of the first bank praised the high standards of safety of the country which allowed anonymous placements with numbered accounts. This adviser even proposed the discrete transfer of the money from Liechtenstein to Luxembourg.
The adviser the second bank specified that the bank had great experience in the field and that there was nothing to fear coming from its head office.
The adviser of the third bank was more careful, informing the factitious clients of the risks on bleaching but presented the various means possible to place money without paying tax.
The adviser of the fourth bank refused to advise the customer.

The documentary is perfect implementation of Lucien Thiel's doctrine : that's to say
- It is not our duty to control if the tax payer was honest,
- Banking secrecy remains : Luxembourg is not compelled to communicate its clients'data.


As far as professionals and politicians in Luxembourg are concerned, they underlined that the TV documentary was only based on the German point of view that is not the Luxembourg point of view and that it was a trap against Luxembourg to weaken the country in the debate relating to banking secrecy.

While the Liechtenstein scandal is recent, what is extraordinary the absence of guilt-feelings and the feeling of impunity.


I guess the FATF enjoys Luxembourg's generous grant that shoul have never ever taken place.


Know more :

Article in French from L'Essentiel

Script of the documentary in German

Documentary in German : Wie die Landesbanken in Luxemburg helfen, Geld am deutschen Fiskus vorbeizuschleusen (As the Landesbank in Luxembourg help to smuggle through money at the German treasury)

Debate in German : Landesbanken in Luxemburg helfen Geld am deutschen Fiskus vorbeizuschleusen (Landesbank in Luxembourg help to smuggle through money at the German treasury)