Sunday

3rd Dec 2023

EU bank transparency rules delayed

  • Luxembourg: the principality, together with Austria, are delaying bank transparency rules (Photo: Cesar Poyatos)

Finance ministers on Friday (15 November) failed to reach a political agreement to impose greater bank transparency rules.

Both Luxembourg and Austria opposed the measure, which would allow governments to collect information on income from foreign accounts.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The political agreement on the draft proposal on taxation on savings income requires the full backing of all 28 ministers.

Luxembourg’s Luc Frieden defended his country position not to put a rapid end to bank secrecy.

“For some, they simply say that Luxembourg is a place where you can hide your money, undeclared money, and that was and is wrong,” he told reporters in Brussels.

Luxembourg wants greater bank account transparency rules but not until Switzerland, Liechtenstein, Monaco, Andorra, and San Marino also sign up.

EU leaders at a summit in May agreed to reach a political decision before 2014.

But Frieden, who is in his final days as finance minister, said “rules that have to be adopted, have to be international. The same is true if we want to make the fight against tax fraud efficient.”

All other member states want to impose an automatic exchange of information on personal savings accounts, under the European Commission revised taxation savings directive, before the end of the year.

Frieden said the next government in Luxembourg would instead apply the rules in the beginning of 2015.

EU taxation commissioner Algirdas Semeta, for his part, said Luxembourg and Austria need to recognise the global trend towards the automatic exchange of tax information.

The Organisation for Economic Co-operation and Development (OECD), the Paris-based economic club, and the G20 declared the system as the future international standard.

“The era of banking secrecy is coming to an end,” said Semeta.

He noted that Switzerland, Liechtenstein, and Singapore have signed agreements with the US. Switzerland also agreed to standards laid out by the OECD.

“The EU is no longer making the first move, the world is already moving and the EU must not be left behind,” said Semeta.

UK leads transparency campaign

Ministers also discussed ways to tackle fraud and money laundering.

Drug lords and other criminal gangs are taking advantage of murky ownership rules that allow them to “clean” dirty money in shell companies.

Anonymous shell companies are legal entities set up to hide the owner’s identities.

Also known as “phantom firms”, they are the most widely used method for laundering the proceeds of crime, corruption, and tax evasion.

But the UK, with the backing of France and Italy, want to stamp out the practice by disclosing the “beneficial owner” of a company when it is formed.

UK prime minister David Cameron announced in October that the UK would set up a central public registry of corporate beneficial ownership information, possibly next year.

Cameron, in a letter sent to EU council chief Herman Van Rompuy last night, said the new EU anti-money laundering directive should include rules that would require member states to do the same.

“I believe this will prove a significant step towards breaking through the walls of corporate secrecy,” noted the letter.

Financial Transparency Coalition, a group of pro-transparency NGOs, said such registries would “make it much harder for Europe's financial system to be abused.”

However, member states remain divided on the issue.

Analysis

What are the big money debates at COP28 UN climate summit?

The most critical UN climate conference (COP28) ever will run from Thursday to mid-December — with talks on climate commitments and climate finance expected to determine the success of this year's summit.

Opinion

Dubai's COP28 — a view from the ground

Discussion of the biggest existential threat humanity has ever faced is barely mentioned on billboards or signage in Dubai — yet visitors are made aware quite quickly that t world rugby sevens tournament is imminent.

Latest News

  1. Israel's EU ambassador: 'No clean way to do this operation'
  2. Brussels denies having no 'concern' on Spain's amnesty law
  3. Dubai's COP28 — a view from the ground
  4. Germany moves to criminalise NGO search-and-rescue missions
  5. Israel recalls ambassador to Spain in new diplomatic spat
  6. Migrant return bill 'obstructed' as EU states mull new position
  7. Paris and Berlin key to including rape in gender-violence directive
  8. What are the big money debates at COP28 UN climate summit?

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us