Ethics and governance in the European Financial centers

19/01/2007


The British Bankers' Association (BBA) said today that it has serious concerns over the 8 th Directive on Statutory Audit. As it is currently worded, the Directive will have an adverse impact on third country companies trading on the UK market by potentially requiring them to be audited by an auditor registered in the UK.

The BBA has already raised these concerns with the European Commission in November 2006. The Commission has now launched a consultation on applying transitional measures until equivalence of third country oversight into auditing is established.

The BBA considers that this Directive should promote confidence in auditing and enhance investor protection without damaging the attractiveness of EU capital markets. However, in order to do so, companies from third countries must have a transition period for their home country auditing to be considered equivalent to EU standards.

Angela Knight, chief executive designate of the BBA said: "The BBA is fully aware of the impact of this issue, which is why we wrote to the European Commission in November setting out our concerns. We are pleased to see that the Commission has launched a consultation on this and we are urging the Commission to address the potentially adverse consequences implicit in the Directive.

We would also strongly recommend that the business community and the Government support the Commission's initiative."

Know more

As the OECD report on bribery (This report was approved and adopted by the Working Group on Bribery in International Business Transactions (CIME) on 28 May 2004) said, "The first investigations conducted by the prosecutor with Luxembourg banks and financial institutions holding assets of the Italian agri-food group Parmalat confirmed that some Luxembourg banks show little enthusiasm for fulfilling their reporting obligations: not only did some of them wait to report their suspicions of money laundering to the prosecutor until after the announcement of Parmalat’s collapse at the end of December 2003, but others remained much more discreet." But it is true that in this Center banks and financial institutions consider that "offences such as forgery, use of forgery, false balance sheets, use of false balance sheets or unauthorised use of corporate property are offences with financial connotations which are confused with laundering for the sole purpose of applying exceptional powers to these vague offences (See ABBL Report 2003).
Negligence has replaced pragmatism.

As far as Auditors'liability is concerned, Parmalat SpA has reached an agreement with former auditor Deloitte & Touche to settle all their legal claims, under which Parmalat will receive 149 mln usd, the two firms said in a joint statement dated 12 January 2007.

According to Maurice Lam, Managing Partner of Deloitte Luxembourg, the entity is not involved. as audits stated remarks (Cf. interview in Luxemburger Wort dated 27 October 2004). The investigations on files demonstrated that Deloitte Luxembourg was actually not involved, as Maurice Lam said.



OECD Report 2004

Court Sustains CMHT's Complaint in Parmalat Action Against Certain Auditor Defendants (28 June 2005)

Third Amended Consolidated Class Action Complaint (25 July 2006)

Deloitte to pay Parmalat $149 mln to settle suit (Reuters)

Interview of Maurice Lam (in French)

A MONEYVAL team of examiners went to Monaco from 5 to 11 November 2006.
The team had an exchange of views with Mr. Jean-Paul PROUST, Minister of State, and with Mr. Gilles TONELLI, Counselor for Finance and Economy, Mr. Paul MASSERON, Counselor for Internal Affairs, Mr. Henri FISSORE Counselor for Foreign relations and Mr. Philippe NARMINO, Director of the Department of Legal Services.
The institutions/services met during the visit included: the Financial Intelligence Unit SICCFIN, the Department of Finance and Economy, the Department of Legal Services, the Prosecutor General’s Office, Monaco representatives to the Banking Commission, the Department of Economic Growth, the Direction of Public Safety, Customs, the Department for External Relations, Gaming Control, Real Estate Chamber, representatives from the association of banks, insurance sector, company service providers, casinos, notaries, lawyers and counsels, accountants, etc.
The draft report will be prepared for review and adoption by the MONEYVAL Committee in the second semester of 2007. This evaluation is based on the Forty Recommendations of the FATF and the 9 Special Recommendations of the FATF, together with the 2 Directives of the European Commission (91/308 EEC and 2001/97/EC).