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Last updated at 11:53 GMT, Friday, 13 March 2009

Tax havens to ease bank secrecy

Summary

13 March 2009

Amid growing pressure over tax evasion and money laundering, two small European states, Liechtenstein and Andorra, have agreed to ease strict bank secrecy rules.

Reporter:
Mark Gregory

Liechtenstein border

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Report

Liechtenstein and Andorra are among three states designated as "non-cooperative tax havens" by the Paris-based Organisation for Economic Co-operation and Development. Monaco is the other one. They've all come under intense pressure to abandon longstanding bank secrecy rules ahead of next month's G20 summit of major economies in London. The meeting will debate plans to toughen the international response to banking centres seen as harbouring tax evaders.

Liechtenstein has been in the spotlight since German investigators purchased financial records from a Liechtenstein bank employee. Those records revealed incriminating information about how thousands of Germans, including the former head of the German postal service, hid assets from the tax authorities at home.

Liechtenstein has now agreed to support OECD guidelines on transparency and financial information exchange with foreign governments. It will start negotiations on bilateral tax information deals with Germany and Britain next month. Meanwhile, Andorra has agreed to abandon bank secrecy by next November in the hope of being removed from international blacklists.

All this will increase the pressure on Switzerland, the most prominent nation with strict bank secrecy rules, to change its ways.


Mark Gregory, BBC News

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Vocabulary

non-cooperative tax havens
a 'tax haven' is a country that allows people from other countries to keep their money and valuables in its banks without declaring it - and so helping them to avoid paying taxes in their countries; 'non-cooperative' refers to the fact that some of these countries refuse to change their bank secrecy laws even though they are strongly advised and encouraged to do so by other countries
come under intense pressure
been persistently urged/strongly encouraged
harbouring tax evaders
helping people who don't pay taxes by keeping their wealth secret or sometimes by allowing them to live there
in the spotlight
a centre of (international) attention
incriminating information
information which has so far been kept secret and which proves that someone has done something wrong/illegal
hid assets from
failed to declare their true wealth to
transparency
here, conducting business in an open and honest way
bilateral
involving two sides (here, two countries)
being removed from international blacklists
building a new, improved reputation among the world's countries and being included in international processes
to change its ways
to stop behaving like it is behaving now; here, to ease its bank secrecy rules
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