Ethics and governance in the European Financial centers

Liechtenstein has just signed an agreement with Monaco to exchange information on fraud and tax evasion based on the OECD tax model.

The jurisdiction has now half of the required agreements (6 out of 12).

Agreements with San marino and Ireland and initialed.

Know more

The AFP has reported that Liechtenstein and Luxembourg, which have both been criticised by world powers for their banking secrecy, are planning a tax treaty to fall into line with OECD rules.

Know more

"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.

Read IHT

The Telegraph has reported that the former Liechtenstein bank employee who sparked an international tax evasion probe after allegedly handing over stolen information on ex-clients is now wanted by Interpol himself.

Know more

The AFP has reported that Liechtenstein ruler Prince Alois said the principality should cooperate with foreign states on tax evasion issues, saying that changes could yield opportunities for its financial sector.

Know more

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.

Know more

The AFP has reported that Liechtenstein has pledged to boost cooperation with the EU in an effort to avoid future problems.

Read article

In the context of the fraud through Liechtenstein, a note to journalists was published. This note is intended to provide background information on the recent tax evasion affair in Germany that appears to involve a large number of German residents who have taken advantage of Liechtenstein’s secrecy rules and its failure to co-operate with other countries in tax matters.


Read note

Sen. Carl Levin is opening an investigation into whether U.S. citizens are hiding assets in banks in Liechtenstein to evade taxes after a German probe found widespread abuse.

Know more from Bloomberg

Know more from the Financial Times

Vaduz, 15.2.2008 - As announced today by LGT Group, there are indications that client data stolen from LGT Treuhand AG in Vaduz has been unlawfully disclosed. The theft of this data was registered as a criminal offence and a court sentence was passed in 2003. Clients, who have a business relationship only with LGT Bank (and not with LGT Treuhand AG), as well as all client relationships established from 2003 onwards with companies of LGT Group, are not affected by this theft of client data.

Know more