Liechtenstein: putting on the screws

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AFP has reported:

The German finance ministry threatened on Friday to tax all financial transfers to Liechtenstein unless the Alpine principality relaxed its banking secrecy codes and helped trace tax evaders.

"We are thinking of taking additional steps on a bilateral level and taxing all transfers at the source is an option," finance ministry spokesman Thorsten Albig told reporters.

He was confirming a threat voiced by Finance Minister Peer Steinbrueck, who told German television: "We have to put on the screws."

There is no doubt that this is the way to go.

And the same has to be done to all countries that are EU members or affiliates that are not cooperating by requiring automatic information exchang under the EU Savings Tax Directive, places that operate strict secrecy like Singapore, and places where it cannot be determined that effective money laundering controls are in operation. According to the recent NAO report on British Crown Protectorates that is most of them.

As Raymond Baker, author of Capitalism's Achilles Heel has always said, shutting down tax havens does not involve rocket science: it just requires political will.

I think that's now on the horizon.