Ethics and governance in the European Financial centers

This is what was stated the day before yesterday on the topics of corruption an tax havens.

Corruption

19. We call for the ratification of the United Nations Convention against Corruption (UNCAC) by all countries and a strong and consistent follow-up of the Bali Conference by ensuring effective implementation of UNCAC, including the development of a review mechanism. Reaffirming our previous commitments, we will redouble our efforts to deny safe havens through our national laws to public officials found guilty of corruption and strengthen international cooperation on asset recovery including supporting initiatives of relevant international organizations such as the Stolen Asset Recovery(StAR) Initiative promoted by the World Bank and United Nations Office on Drugs and Crime (UNODC). We also recognize the importance of technical assistance to partner countries in their own efforts to implement the Convention.
We will also strengthen enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions with the commitment to continue effective monitoring through the implementation of a rigorous and permanent peer review mechanism and call for accession to the Convention by emerging countries. We endorsed an enhanced accountability report detailing actions of each G8 member to implement the anticorruption commitments we have undertaken in the G8, and agreed to update it annually.

Abuses of the Financial System

20. We urge all countries that have not yet fully implemented the OECD standards of transparency and effective exchange of information in tax matters to do so without further delay, and encourage the OECD to strengthen its work on tax evasion and report back in 2010.



Unfortunately these sensitive topics (tax haven, corruption, tax) are not quoted at all in the Press Conference by Prime Minister Yasuo Fukuda that took place yesterday.

Nearly two-thirds of senior executives around the world say they have experienced some form of actual or
attempted corruption in their business dealings, according to a report by PricewaterhouseCoopers. The report, 'Confronting Corruption: The business case for an effective anti-corruption programme,' finds that almost 80 percent of executives say they have anti-corruption programs in place at their company, but only 22 percent are confident the programs are effective. Executives say they feel vulnerable to corruption particularly when doing business in expanding markets such as China, India, Russia and South America.

PwC has no corruption contact for Switzerland and Luxembourg, two major financial centers.

But the situation is more worying in Luxembourg than it is Switzerland as
- there is a Transparency International chapter in Switzerland, which is not the case in Luxembourg
- according to the Global Corruption Barometer 2007 issued by Transparency International, 6 % of respondents in Luxembourg reported they paid a bribe to obtain a service. To be compared to 1 % of respondents in France or Switzerland, 2 % in the UK or in the Netherlands and 5% European average. Luxembourg is in the third quintile (6 – 18%) with countries like Bulgaria, Croatia, Czech Republic, Malaysia, Panama, Russia, Turkey, Venezuela, and Vietnam,
- OECD has recently urged Luxembourg to introduce liability of legal persons when at the same time the GRECO took a particularly positive view of the seizure and confiscation system and of criminal liability on the part of legal persons. Neither GRECO report, nor OECD reports relating to corruption seem officially communicated in Luxembourg when other non sensitive reports from the OECD are communicated (for instance the Economic survey of Luxembourg).


Read press release

Read report

The Guardian has reported that this year, Gurria, head of the Organisation for Economic Co-operation and Development, made strong public statements about the failure of certain tax havens to disclose information to governments about suspected tax evaders. 'The question is the capacity of countries and third parties to make sure the origin and destination of the money is legitimate, not the product of an illegal activity ... I'm talking about taxes. That is bad, but almost tame compared to money laundering and organised crime trying to pass their money through legitimate accounts and systems.'
There is actually concern that the OECD is failing to come to grips with tax evasion. Scandals centring on Liechtenstein's biggest bank, owned by the head of state, and UBS bankers in the US have ratcheted up fears that tax havens are incapable of monitoring the battalions of accountants, lawyers and bankers stashing trillions of dollars away from national exchequers.

Read article from the Guardian