May 21, 2013 / 3:57 PM / 6 years ago

Luxembourg agrees to end bank secrecy with U.S. authorities

BRUSSELS (Reuters) - Luxembourg has agreed to automatically exchange information with United States tax authorities about the bank accounts held by U.S. citizens and residents, the finance ministry said on Tuesday.

In April, Luxembourg announced an end to bank secrecy rules from 2015 for EU citizens who have savings in the country.

Luxembourg, with a banking industry roughly 22 times the size of its economy and with deposits 10 times its GDP, has come under heavy pressure to change its bank secrecy laws in recent months.

The decision by Luxembourg comes on the eve of a European Union summit which will discuss sharing more data on citizens who park wealth across borders, with European leaders keen to limit tax evasion at a time of tight budgets and austerity.

Luxembourg’s finance ministry said the rules should also be applied in other financial centers such as Switzerland, Liechtenstein, Andorra, Monaco and San Marino, and that it had told the European Commission to negotiate on its behalf.

“Luxembourg wishes to see the same conditions apply to all competing financial centers and to see the automatic exchange of information accepted as the international standard,” the ministry said in a statement.

Decades of banking secrecy helped Luxembourg to establish what is now one of the biggest financial centers in Europe and to make its citizens the region’s wealthiest in terms of per-capita income.

Pressure from the United States to give ground increased after a report by the Washington-based International Consortium of Investigative Journalists detailed how banks had worked to help wealthy clients use tax havens to cut their tax bills.

Reporting by Robert-Jan Bartunek; editing by Rex Merrifield, Ron Askew

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