July 2009 - cypherpunks-legacy

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Liechtenstein Agrees to End Bank Secrecy on Tax Data
by R.A. Hettinga 13 Jul '09

13 Jul '09

<http://online.wsj.com/article/SB124727784329626615.html#printMode> The Wall Street Journal EUROPE NEWS JULY 11, 2009 Liechtenstein Agrees to End Bank Secrecy on Tax Data By DAVID CRAWFORD Liechtenstein initialed a deal with Germany to drop bank secrecy laws starting next year that until now have prevented cooperation in tax probes, one of the first concrete outcomes of promises that offshore tax havens across Europe made this year to open up their bank sectors. Friday's agreement in Berlin was triggered by pressure ahead of April's meeting of Group of 20 nations, which had threatened to produce a blacklist of alleged tax havens for targeting with sanctions. Promises made by Lichtenstein and other offshore banking centers just ahead of the meeting caused G-20 leaders to back off, but the threat of sanctions remains if bilateral cooperation deals aren't reached. A Liechtenstein government spokesman said the German accord follows a model recommended by the Organization for Economic Cooperation and Development, an intergovernment think tank based in Paris. Friday's pact still needs to be signed formally and ratified to take effect. The pact doesn't allow German tax investigators to trawl Liechtenstein bank records searching for possible offenders, the spokesman said. That means banks in Liechtenstein will offer data on clients only in response to specific tax fraud investigations by foreign governments. A spokeswoman for the German Finance Ministry said, "The initialing of the agreement confirms the success of our international effort to obtain cooperation in tax investigations based on OECD guidelines." Liechtenstein and the U.S. signed a similar accord in December. Talks are under way for a tax-information agreement with the U.K., Liechtenstein said, adding it hopes to reach an accord with the European Union as a whole that would overlap, but not replace, its German pact. An accord with the EU would allow Liechtenstein to cooperate with tax investigations in 27 countries, Liechtenstein said. Germany is surrounded by smaller jurisdictions such as Liechtenstein, Luxembourg, Austria and above all Switzerland that offer tighter bank secrecy laws that are attractive to German citizens looking for ways to hide income from tax authorities in Berlin.

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