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08/30/2008

BBC country profile

The BBC published very interesting country profiles.

It explains that Luxembourg's prosperity was formerly based on steel manufacturing. With the decline of that industry, Luxembourg diversified and is now best known for its status as a tax haven and banking centre. But Luxembourg's strict laws on banking secrecy mean the system can be exploited for the purposes of tax evasion and fraud.

The qualification of "tax haven" is used neither for Switzerland nor for the UK. But it is for Liechtenstein .

About Liechtenstein : "Much of its wealth is based on its status as a low tax haven. Around 75,000 companies have their nominal "letter box" offices in Liechtenstein, where business tax rates are very favourable".

About Switzerland : "A landlocked, majestically-scenic country, Switzerland's long-standing neutral status has given it political stability that has helped it become one of the world's wealthiest countries where banking is a key industry."

Royaume-Uni : "The economy - one of the largest in the world - is no longer manufacturing but services-based, with e-commerce of growing significance. The City of London is a global financial centre."


Is the BBC right ?

Probably yes to a certain extend as the UK and Switzerland demonstrate more transparency on their dysfunctions than Luxembourg or Liechtenstein do. Especially the media actually play the role of watchdog and an organisation like Transparency International observes the jurisdiction in the UK and Switzerland.

17:30 Posted in Luxembourg | Permalink | Comments (0)

President Sarkozy against tax havens and co leading a tax haven

In the framework of a speech before French ambassadors, Président Sarkosy underlined the responsability of tax havens in the financial crisis.
"La crise financière a débuté avec le scandale des « subprimes », les fautes graves –mais toujours impunies- des agences de notation et, d’une façon générale, les excès d’un capitalisme financier qui a connu de sérieuses dérives : dissimulation des risques, sophistication incontrôlée des instruments financiers, lacunes de la régulation et persistance de paradis fiscaux captant une partie de l’épargne mondiale qui serait plus justement employée à financer les investissements et la croissance. Le coût de ces errements pour le système bancaire international sera à terme, selon le FMI, de l’ordre de 1.000 milliards de dollars. Mais le coût pour l’économie réelle sera bien plus élevé encore." he said.
For English-speaking readers, this means : "the financial crisis began with the "subprime" scandal, serious -but still unpunished- mistakes by rating agencies and, in a general way, the excesses of financial capitalism which has experienced serious abuses: concealment of risks, uncontrolled sophistication of financial instruments, gaps in regulation and persistence of tax havens capturing a part of global savings that would be more justly employed financing investment and growth. The cost of such misguided ways for the international banking system will be later, according to the IMF, even much higher".

As co prince of the Principality of Andorra, President Sarkozy should act to correct dysfunctions as Andorra does not respect international recs to fight money laundering and the financing of terrorism.

15:30 Posted in General | Permalink | Comments (0)

08/26/2008

Switzerland Asked U.S. Not to Push UBS for Swiss Client Data

Bloomberg has reported that Switzerland asked the U.S. not to pressure UBS AG for client data located in the Alpine country as investigators look into whether the world's largest wealth manager helped American clients evade taxes.

According to Swiss law, bank secrecy can only be lifted in connection with a criminal offense, such as tax fraud or money laundering. Tax evasion isn't a crime in Switzerland. Should the finance ministry agree for the account details to be given out, account holders would be informed before their details are handed over, giving them the option to go to court.

17:45 Posted in Switzerland | Permalink | Comments (0)