FACTBOX-Status of bank secrecy protection in Europe

Tue Aug 11, 2009 9:05am EDT

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Aug 11 (Reuters) - Liechtenstein and Britain said on Tuesday they had signed an agreement to encourage British clients of banks in the Alpine principality to voluntarily disclose untaxed money. [ID:nLB642083]

Here are some details about European countries who have been maintaining strict laws protecting banking privacy.

* ANDORRA -- In May, the OECD's Committee on Fiscal Affairs removed Andorra from its list of uncooperative tax havens following its commitment to implement the OECD standards of transparency and effective exchange of information.

* AUSTRIA -- Is on an OECD "grey list" of countries that have not signed international agreements to combat tax evasion.

-- Announced on March 13 that it would abide by OECD rules by cooperating on sharing information on a case-by-case basis.

-- Allows strict banking secrecy, although information is provided on request to governments producing evidence that the account holder is involved in a criminal investigation. It also allows account holders to maintain bank secrecy by paying withholding tax.

* BELGIUM -- Belgium was last month removed from OECD's "grey list" of countries seen as lacking financial transparency as it now has the required 12 agreements with other countries to exchange tax-related information.

-- The OECD said Belgium was moved into the category of "jurisdictions that have substantially implemented the internationally agreed tax standard".

-- Belgium has opted to keep bank secrecy and to charge foreign account holders withholding tax under the 2005 EU Savings Directive. Bank secrets may be revealed as evidence when an account holder is under investigation.

-- Belgium is only one of three countries (also Austria and Luxembourg) that have opt-outs from EU rules on taxing savings held by citizens outside their home state.

* BERMUDA -- Bermuda and Germany on July 3 signed a bilateral agreement for the exchange of information for tax purposes, bringing to 13 the number of agreements that Bermuda has entered into with other countries. Bermuda was one of the first jurisdictions to commit to the international standard of transparency and exchange of information in May 2000.

* CAYMAN ISLANDS -- The Cayman Islands signed an agreement with the Netherlands on July 8 for the exchange of information for tax purposes. It had signed tax treaties with the Nordic countries on April 1.

* GUERNSEY -- Guernsey signed an agreement with Germany on March 26 to share information for tax purposes.

* JERSEY -- Jersey signed an agreement with France in March to combat tax fraud by exchanging information. It had already signed similar agreements with the United States, Germany and Britain.

-- Jersey is the UK's largest offshore centre. Bank deposits on the island were 206 billion pounds ($306.1 billion) at the end of 2008.

* LIECHTENSTEIN -- Liechtenstein and Britain said on Tuesday they had signed an agreement to encourage British clients of banks in Liechtenstein to voluntarily disclose untaxed money.

-- The deal provides special conditions between 2010 and 2015 to encourage clients with British tax arrears to declare themselves.

-- On July 10 Liechtenstein struck a tax information deal with Germany which allows the exchange of information on request. In Dec. 2008 it signed a similar agreement with the United States, which paved the way for the exchange of bank data in certain cases of tax evasion.

-- It has also agreed to relax its strict bank secrecy laws and commit to OECD standards on tax transparency and data exchange, as well as be more co-operative with other tax authorities on request. New regulations require named account holders rather than permitting banks to issue numbered accounts. In May, the OECD removed Liechtenstein from the list of uncooperative tax havens. * LUXEMBOURG -- Luxembourg, which holds an estimated $1 trillion of global offshore assets, said last month it was taken off the OECD "grey list" of non-cooperative countries after signing 12 agreements of exchange of information. The latest protocol was with Norway.

-- Banking secrecy law says that those who work in financial institutions cannot reveal information to the outside world except in money-laundering cases.

* MONACO -- In May 2009, the OECD removed Monaco from the list of uncooperative tax havens. Monaco had said in March that it was prepared to enter into agreements for the exchange of information in all tax matters in accordance with OECD standards.

* SAN MARINO -- On Aug. 3, San Marino said the country expected to be removed from the OECD "grey list" by September. San Marino was taken off a previous OECD's blacklist in 2003.

-- San Marino has agreed to allow account holders to keep bank secrecy by paying withholding tax.

* SWITZERLAND -- In a case that goes to the heart of Switzerland's famed bank secrecy laws, global Swiss bank UBS AG (UBSN.VX)(UBS.N) and the United States are engaged in a protracted tax dispute. The United States has ordered UBS to disclose the identities of 52,000 U.S. clients suspected of having used secret Swiss accounts to dodge taxes.

-- But UBS, backed by Berne, has refused to hand over the data, calling the blanket U.S. request a "fishing expedition" that would breach Swiss bank secrecy laws and existing bilateral tax agreements.

-- UBS and Washington will hold a status conference on the progress of talks to settle the case at 1300 GMT, Aug. 12.

-- The Swiss government said on April 8 that new bilateral tax treaties could be subject to a referendum.

-- On March 13, Switzerland agreed to relax its strict bank secrecy rules and cooperate more on tax evasion. It would embrace OCED standards for tax cooperation and exchange of information. Switzerland will only pass on information following detailed requests on individual cases.

-- Banks supply information requested by foreign governments pursuing criminal investigations of individuals. Switzerland allows EU account holders to keep bank secrecy by paying a withholding tax.

-- Is the world's biggest offshore centre with about $2 trillion, or about 27 percent, of estimated global offshore assets, according to the Boston Consulting Group.

* THE EU SAVINGS TAX DIRECTIVE:

-- Under the landmark EU savings tax directive, introduced in 2005, countries can choose between the option of automatically sharing tax data with other tax authorities or impose a withholding tax on the income from EU citizens' savings. Sources: Reuters; OECD (www.oecd.org) (Writing by David Cutler, London Editorial Reference Unit; Additional writing by Carl Bagh and Jijo Jacob; editing by Simon Jessop)

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