Luxembourg to Abandon Bank Secrecy Rules from 2017

Luxembourg Finance Minister Pierre Gramegna (L) chats with French Finance Minister Michel Sapin (R) prior to the Luxembourg EU Eurogroup Finance Ministers Meeting at EU headquarters in Luxembourg, 13 October 2014. Photo EPA/BGNES

Luxembourg said on Tuesday it will drop its bank secrecy rules from 2017 in a move that marks a breakthrough in global efforts to reduce tax evasion.

At a meeting of EU finance ministers in Luxembourg, the country’s finance minister Pierre Gramegna said it would sign up to an international standard aimed at fighting tax dodging and money laundering.

The Organisation for Economic Cooperation and Development last year published a document that foresaw an annual exchange of bank information between governments starting in 2017.

Helped by its bank secrecy rules, the Grand Duchy nestled between Germany and France has become one of Europe's biggest financial centres, making its citizens the EU's wealthiest in terms of per-capita income.

“Bank secrecy is dead and automatic exchange of information will be applied in its widest form," the EU's taxation commissioner Algirdas Semeta said at a news conference after the meeting.

Luxembourg's decision will leave Austria as the only EU country allowing an EU citizen to open a bank account in another EU member state without tax authorities in the person's country of origin being informed. Austria said at Tuesday’s meeting it could not agree to drop its bank secrecy rules by 2017 but indicated it may be willing to do so the following year.

Major developed countries led by Germany and the US have spent years trying to convince Luxembourg and Austria to drop their bank secrecy rules.

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