Offshore

European Financial Centres Still Lack Plan To Resist Onslaught On Offshore World

Tom Burroughes, Editor, London, 15 February 2010

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European international financial centres under pressure to open up their affairs to foreign governments hunting alleged tax cheats appeared to lack a specific plan on how to fight back following high-level talks in Luxembourg at the weekend, according to Reuters.

Swiss Finance Minister Hans-Rudolf Merz met ministers from Luxembourg and Austria, the only two European Union states that still retain bank secrecy, and the prime minister of Liechtenstein during closed-door talks in Senningen.

Meanwhile, Agence France-Presse, said that a member of the Swiss parliament, Alfred Heer, who is of the far-right Swiss People’s Party, has told the daily newspaper Bild that top German public officials had secret bank accounts in Switzerland. Mr Heer has threatened to out them if Germany purchased stolen data from Swiss-based banks.

Germany has angered Switzerland by agreeing to purchase a stolen disc containing the names of 1,500 Swiss account holders who may have sought to evade taxes via Swiss accounts. The German government is reported to have moved to pay €2.5 million to buy data from an anonymous whistle-blower.

In the Luxembourg talks, officials were joined for the first time by German finance minister Wolfgang Schaeuble.

"The meeting was definitely a step in the right direction," a person familiar with the talks told Reuters. "But there were no concrete political results," the person said.

A spokesman for Luxembourg minister Luc Frieden, who hosted the meeting, declined to comment on the talks.

Switzerland will hold a government meeting on 24 February to discuss its future strategy.

Last week, UBS, Switzerland’s largest bank and wealth manager, reported that while its profits have increased, it continues to suffer heavy client outflows, with events such as an Italian tax amnesty proving one of the factors behind the money flows. The bank last year agreed to hand over some US client account data to the US authorities as part of an agreement between the Swiss and US governments.

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