The end of bank secrecy in Liechtenstein? 4 reasons not to celebrate yet

The Financial Times and Reuters, among others, reported yesterday that Liechtenstein has agreed to end banking secrecy and is ready to sign international information sharing agreements.

A look at local news sources, however, provides some reasons to be cautious:

1. Banking secrecy will not be scrapped, rather it will be “reduced” for countries with which Liechtenstein has signed information sharing agreements. (see last paragraph at link, in German.)

2. The Liechtenstein government’s statement clarified that its position on global standards will “take the interests of clients of the finance industry into account”.

3. Local news source also reports that Liechtenstein will “actively” share information only with 5 countries: UK, Germany, France, Spain and Italy, and is “ready” to negotiate bilateral agreements with countries which “meet transparency standards”.

4. There is a big difference between signing up to a standard and actually implementing it. In the case of Switzerland, for example, the NGO Alliance Sud said last Tuesday that “Switzerland insists on the most restrictive possible conditions when it comes to implementation – to the clear disadvantage of developing countries”. In particular, Switzerland demands strict data reciprocity from developing countries (this is what is meant by “meet transparency standards”) which in many cases do not yet have the administrative capacity to deliver this data. This is clearly a stalling tactic: how many Swiss citizens will have secret bank accounts in developing countries anyway?

One more note: the positive comments cited by the FT and Reuters in their articles on Liechtenstein are all from government sources, the financial industry or the OECD.


2 thoughts on “The end of bank secrecy in Liechtenstein? 4 reasons not to celebrate yet

  1. Pingback: Top 5: Offshore tax havens for bank secrecy - Nomad Capitalist

  2. Of course, the mainstream media is all too happy to report this as “the end of bank secrecy”. As you report, it’s not so cut and dry. Of course, where one door closes, another will open, and there are plenty of emerging nations happy to pick up the slack if tiny nations like Liechtenstein decide to kill their bank secrecy programs. Of course, there are also plenty of New Rich in emerging nations who need a place to bank, and whose countries aren’t as aggressive as the USSA in tracking them down.

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