Downtrodden dentists and banker heroes in Luxembourg
Anyone familiar with the world of secrecy jurisdictions will know what to expect from bankers. Predictably discussions open with denial, though with an unfamiliar twist:
“Luxembourg is in no way a normal secrecy jurisdiction or tax haven. It does not detax things that are systematically taxed elsewhere. Banking secrecy in Luxembourg is the same as in other countries, and is fundamentally an issue of data protection.”
Data protection? Well that’s novel. The banking secrecy law remains intact, I’m told, but is now “more swiss cheese than swiss banking secrecy” so customers are reassured by banks that their tax evasion is protected by data protection laws. Should someone alert the OECD?
Next comes the rationalising of aiding and abetting crime:
“Banking secrecy might attract customers using Luxembourg for tax evasion – but these are largely middle income customers like Belgian dentists who are using accounts outside their country to escape from illegitimate impositions by their government.”
Right. That’s OK then. Why didn’t you tell us it was only Belgian dentists in the first place. And middle income too. Bless.
But there’s more:
"Why did the Belgian dentists bring their money here in the first place? It came because Belgian citizens stopped trusting their own governments and took their money across the border.”
When did things get so bad in Brussels? If the idea of empathising with downtrodden dentists fleeing tyranny is a tad hard to swallow, it’s a whole lot easier than digesting the thought of bankers cast as human rights activists.
"Banks have come under an imposition to denounce any suspicion of crime by a client . . we are now monitoring every major movement of funds. We are putting in place the means of a dictatorship. It goes very, very far.”
Enough of tax-oppressed dentists and heroic bankers, what about life for ordinary Luxembourgeois? Well the first thing I learn is that the price of housing is so high that many people commute daily from France and Germany. And employment opportunities are largely restricted to financial services or state bureaucracy. So far so familiar, as is the talk about the insularity of the local media and the general stifling of dissent. Very few people dare to speak up.
My Swiss colleague Peter Niggli is indignant: don’t people in Luxembourg feel strongly about their democratic right to speak up, he asks. Well yes, but the furious attack on the report of Rainer Falk illustrates why civil society is treading on eggs when it engages in public discussions on tax justice issues.
The wounds from the mugging of the Falk report run deep: discussion of the report’s substance has been drowned out by petty quibbling over spelling mistakes and accusations about ‘unprovable’ data. This is familiar territory for Tax Justice Network, so I trot out the line about better to be broadly right than precisely wrong, and everyone agrees that economics has trapped itself in a cul de sac of mathematical modeling which obscures rather than illuminates.
There’s a hint of the Mr Nasty attitude during the Q&A session after the screening of Let’s Make Money. A retired banker in the audience is indignant about suggestions that Luxembourg is a secrecy jurisdiction. “Who are you?” he demands, “and what is this organization you represent?” A strange question given that I featured for around 12 minutes of the film he had just watched, and Tax Justice Network has been fairly prominent in the international media for quite a long time.
I could have been rude, but instead I point out that TJN is the world leader in the struggle to combat secrecy jurisdictions, and anyone with even a passing interest in this issue should have been aware of that fact. “Wake up” I said, “read the international press. The world of tax havens is changing, and that applies to Luxembourg as well.”