HMRC join in the act

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It's now clear that HMRC have bought data on those using Liechtenstein from the same source as the German security service. They may, indeed, have paid the German security service for that data.

I have given more interviews on this today. The focus seems threefold. First, is it legal? Answer, yes it is, HMRC can do this. Second is it ethical? I've already given my answer to that, here. The greater good justifies this action. Third, what will happen next?

That's the really interesting question. As I told the BBC, your viewpoint defines this. If you have a Liechtenstein trust then I'd suggest what you do next is plan a full confession, very fast. You might save yourself some serious penalties. But if you're amongst the majority who neither have such a thing, and what is more, never want one a broader horizon can be considered.

First of all, we can assume that a boundary has been crossed: the principle of buying data of proven quality to break down both systemic and systematic tax abuse might now be more commonplace. I suspect more data will be made available on this basis. The purpose is to make sure that the confidence that banking secrecy is absolute can be shattered forever. Relatively small disclosures on a sufficiently frequent basis from different locations who are habitually non-cooperative will be enough to ensure that this is the case.

Second, increased pressure on financial services providers is going to become a fact of life. As we know from Jersey, where no suspected criminal money laundering (which is what tax evasion is) was reported to the authorities by the whole financial services community in 2006, there is a willingness within these communities to believe that just because non payment of tax using the structures they create is legal within their own domain that the structure does not involve money laundering in the form of tax evasion elsewhere. As a matter of fact, it very often does. They're not, as Prince Alois has claimed, going to be able to ignore this any more.

As a first step I suggest all those banks throughout Europe who have customers who are refusing to exchange information with their home tax authorities under the EU Savings Tax Directive should now be providing that information to their money laundering authorities. It is now apparent that they both need to exchange this information, and to ensure that it is received by those people's home jurisdictions. Secrecy can no longer defend these banks (many of which, in the Channel Islands and the Isle of Man have names with which we in the UK are all terribly familiar) from making such disclosure when it is obvious that the only likely reason for non-disclosure is tax evasion. When the EU Savings Tax Directive is extended to trusts and companies expect banking secrecy in Europe and the EU Crown Protectorates and Dependencies to be pretty much a thing of the past.

Third, the time has come for the OECD to return to this fray with full force: we want all economic activity 'on the record'. That's the way to create a real level playing field. And let's be clear: Switzerland can no longer be allwoed to stop this.


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