Luxembourg is the ‘Death Star’ of tax havens

Oct 4, 2011

Business digest: But the UK and its territories 'are among the worst offenders' in a new tax haven blacklist

EFFORTS to tackle the global tax haven system over the last few years have been almost completely ineffective, according to a new financial secrecy index compiled by the Tax Justice Network which describes Luxembourg as tax haven 'death star' and accuses the UK of being one of the worst offenders.

Luxembourg comes third - but is described as the "Death Star" of financial secrecy in Europe "because of its leading role, in close political partnership with Switzerland and Austria, in fighting against information-sharing schemes in Europe".

As for the UK, the campaign group said that although the City of London only comes 13th on the list, if it were combined with Britain's overseas territories and dependencies - such as Jersey, Bermuda and the Cayman Islands - it would be number one.

By country, Switzerland is ranked first because "it remains a major, active impediment to global financial transparency", says the report. The Cayman Islands come second.

The TNJ criticised existing tax haven agreements for being too weak, and argued that they were a "catalyst for financial crises by attracting huge sums of destabilising capital into offshore markets".

Read a full report at the Guardian.

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