Tuesday, June 16, 2009

Austria to keep banking secrecy

Austria in one of the countires withstanding OECD challenges against bank confidentiality. Article 10 of the Austrian constitution requires money, credit and banking officials to pledge secrecy as to facts obtained during their duties.

Austria to keep banking secrecy

VIENNA, AUSTRIA Mar 13 2009 12:27

Austria has decided not to lift its banking secrecy following talks with the Organisation for Economic Cooperation and Development (OECD) in Paris, Finance Minister Josef Proell said on Friday.

"Our laws are in line with OECD guidelines," Proell told a news conference in Vienna after returning from Paris on Thursday where he had held talks with the OECD on Austria's banking secrecy laws.

"The OECD criteria [on banking secrecy] must be global criteria and they must provide the framework for the European Union and the G20," Proell said.

Austria, along with countries such as Andorra, Liechtenstein, Luxembourg and Switzerland, are all coming under increasing international pressure over their banking secrecy regimes ahead of a Group of 20 summit in London on April 2.

On Thursday, Andorra and Liechtenstein, which are on the OECD's list of "uncooperative tax havens", as well as Belgium, all announced they would ease strict banking secrecy rules and cooperate with foreign tax authorities.

The three countries announced separately that they would swap information with foreign governments to combat tax fraud and evasion, shedding light on the secret offshore accounts of non-residents.

Austria is not on the OECD blacklist but it has also come under fire because its banks are only obliged to supply client information if a court orders them to do so and targeted individuals can appeal such a move.

On Thursday, Austria central bank chief Ewald Nowotny said that Vienna was considering possible changes to banking secrecy laws, even if it was not ready to lift them completely yet.

"Realistically speaking, I believe there will be changes," Nowotny told the late night news programme of ORF public television.

The government has drawn up proposals in its talks with the OECD "but I don't believe Austria will lift banking secrecy altogether", he said.

According to a finance ministry spokesperson, Austria has no plans at present to rethink its banking secrecy laws, even though it took note of the decisions by Andorra and Liechtenstein to ease their rules.

"These are certainly moves that will move the international debate forward but they don't by themselves justify us changing our position," ministry spokesperson Harald Waiglein told AFP.

"We're in favour of equality in the face of competition and there are many countries which aren't transparent" in banking matters, he said.

Waiglein said Vienna would only alter its rules if all countries did likewise. The regime of "trusts" on the Channel Islands, but also rules in some US states such as Delaware, Montana or Nevada, should also be examined, he said.

"Unilaterally lifting banking secrecy will not contribute to transparency but will only divert financial flows and prejudice the Austrian economy," he said. -- AFP

Source: Mail & Guardian Online
Full text in: http://www.mg.co.za/article/2009-03-13-austria-to-keep-banking-secrecy

See also Austria banks and Panama foundation enhance confidentiality

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