Ethics and governance in the European Financial centers

Following the Hearing of the Permanent Subcommittee on Investigations (PSI) of the US Senate, LGT Group asserted that it has always conducted its business in accordance with the applicable legal and regulatory provisions. The data under investigation by the PSI – which is based on the data stolen from LGT Treuhand in 2002 and goes back to the 1970s - is from a time when different regulations applied and when there was no Qualified Intermediary (QI) agreement in place. The specific cases mentioned in the subcommittee’s report are dated and do not in any way reflect LGT’s current business practices.

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In a financial center some employers that fire an honest employee may make a pressure on him or her to have the employee sign a transaction with confidentiality clause .

This way the former employee that knows about a fraud issue, a corruption situation, an abuse in a contract with a business partner and of course a money laundering issue must keep silent on the facts and cannot testify in the future.

This is definitely a kind of obstruction to justice as a transaction is not intended for the pervertion of the integrity of the judicial system by preventing the demonstration of the truth.

Sometimes there is limited confidentiality clause for “The information which was granted to the employee after a request” or similar wording, even though the employer may repudiate later the wording and try to intimidate the former employee by suing him or her if he or she does his or her duty. In such case the justice should investigate to determine what's wrong with the company as there is definitely something wrong for the company to react like that.

But usually there is general confidentiality clause for “The information which the former employe knew” or similar wording.

Should such general clause be written, the testimony and evidence from the employee must be accepted: it is vital that the rules of evidence in criminal procedural codes permit this testimony and evidences in the name of the truth.
It is vital as well that criminal procedural and civil codes protect the former employee by admitting the legitimate breach in the transaction as the justice is not intended for the protection of illegal and/or criminal activities.

Luxembourg does not have a balance sheets database ("centrale des bilans") despite a project since a long time and the fact that such system exists elsewhere.
Professionals, either companies or auditors, acutally are not in favor of such transparency of their accounts.

In a country where
- the Chamber of Commerce and the bankers' association state that "offences such as forgery, use of forgery, false balance sheets, use of false balance sheets or unauthorised use of corporate property are vague offences”
- big four firms do not repudiate such statement while being members of the bankers' association
- many professionals communicate on their "strong balance sheet"
- big four firms (especially PwC and Ernst & Young) condone the issue of economic crime by not participating to their brand's studies on the topic
- CSR ignores business ethics
- liability of legal persons does not exist
- etc.

the delay is comprehensible and as the STATEC explained "the obstacles met do not concern its competence"