Liechtenstein will not relinquish bank secrecy according to the principality’s ruler Prince Alois in a recent Bloomberg interview. Around...

Liechtenstein will not relinquish bank secrecy according to the principality’s ruler Prince Alois in a recent Bloomberg interview. Around 30 per cent of the nation’s gross domestic product derives from financial services according to the prince and forsaking bank secrecy would have no support among the population, which would have to pass a vote on the issue. Liechtenstein was branded an “uncooperative” tax haven by the Organisation for Economic Cooperation and Development and was on a list of 35 countries and jurisdictions threatened with sanctions by the organisation in 2002 for refusing to provide more information to tax officials from the world’s industrialised nations. The principality is currently one of only five that remain on the list. The others are Andorra, Liberia, the Marshall Islands and Monaco. ”Bank secrecy is very firmly anchored in the population. I don't think a draft law or international accord proposing to scrap bank secrecy would be successful in the foreseeable future. The people would reject it in a referendum,” Prince Alois told Bloomberg. Under the EU Savings Tax Directive Liechtenstein last year introduced a 15 per cent tax on the savings of EU residents, rising to 35 per cent by 2011. This applies to interest earned on bond-coupon payments, bank-account interest and gains from mutual funds holding 40 per cent or more of their assets in debt securities. First figures on how much has been raised for the EU since the tax was introduced in July 2005 may be available next month, according to the Prince who said that there is no sign the tax is slowing inflows of client assets into Liechtenstein, although existing clients have probably moved their savings into tax-exempt products.