Ethics and governance in the European Financial centers

"As far as German-Liechtenstein relations are concerned, we wait here for better times, although I am optimistic, for in the past 200 years we have managed to survive three German Reichs, and I hope we will also survive a fourth," wrote Prince Hans-Adam II of Liechtenstein in a letter rejecting a request from a Jewish museum which asked him to lend it a painting from his collection.

I can understand that Hans-Adam II is upset as the reputation of Liechtenstein and its financial center have been damaged by the events.

The prince's office said in a statement that he had in no way intended "to belittle the atrocious events of the Third Reich" in what was meant to be a private and personal letter.

As far as the dispute between Germany and Liechtenstein is concerned since Germany acquired secret bank data by buying information, I do consider that selling the truth or buying it is a pathetic attitude.

Doing a citizen duty cannot be remunerated.

Furthermore, as I already wrote I am not in favor of whistleblowing. Whistleblowing is based on internal information that is communicated and therefore is clearly a breach of loyalty. There are many public and official facts in the jurisdictions that allow to trace both a lax attitude and a support to professional that do not comply with professional standing.

Additionaly if institutions like the GRECO, OECD, the United Nations... call for the implementation of provisions for the protection of whistleblowers, they do not sanction jurisdictions that do not abide by the recommendations.

It is amazing to see that the word "whistleblowing" does not exist in the FATF website with a google search.

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Richard Murphy from tax Justice Nerwork has recently published and analysis about Jersey.
He observed thta Jersey’s new independent fiscal policy panel has reported for the first time that "the nalysis of future trends in tax and spending highlight that there is a real risk that States finances could deteriorate significantly in the medium-term and this should be at the forefront of States members’ minds when they debate the 2009 Business Plan."

And Richard to conclude that "Give them five years, then watch them go bust."

Fernand Grulms, head of Luxembourgforfinance, will be speaker at a conference on the subject "Quel avenir pour la place financière de Luxembourg ?" (What future for the financial center of Luxembourg?).

In the context of the international paradigm shift and considering the "System" in Luxembourg, I have the same conclusion as Richard : Give them five years, then watch them go bust.

Unless they do the required aggiornamento.

It is up to the leaders. But they will have to kill professionnally or politically dubious leaders, their friends in the framework of relationships and networks.

The Permanent Subcommittee on Investigations had scheduled a hearing, "Dividend Tax Abuse: How Offshore Entities Dodge Taxes On U.S. Stock Dividends," on Thursday, September 11, 2008, at 9:30 a.m., in Room 106 of the Dirksen Senate Office Building. The Subcommittee examined how some financial institutions have designed, marketed, and implemented transactions to enable foreign taxpayers, including offshore hedge funds, to dodge millions of dollars of taxes on U.S. stock dividends. The hearing also examined whether current law relating to dividend taxation and withholding should be strengthened. The Subcommittee expects to issue a Subcommittee staff report in conjunction with the hearing summarizing its investigative findings and recommendations. Witnesses included representatives of U.S. financial institutions, offshore hedge funds, a tax expert, and the Internal Revenue Service.


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