“False quarrel coupled with vast hypocrisy.” This is how financial experts and bankers describe the apparent divergence between the United States and Europe concerning bank secrecy. Usually, the short term obscures less immediate goals.
Until the crisis, indeed, no one found fault with the existence of tax havens. But the upheavals caused by this latter justified some “readjustments”. Firstly, combating bank secrecy helps to restore the tarnished image of banks, severely damaged by reckless managements involving several billion dollars. This vendetta, as sudden as it is resolute against tax havens, additionally provides visibility to political leaders lacking in demonstrable action while the world gropes in economic fog. Ultimately, the United States and Europe find themselves agreeing on the necessity to reinject a portion of the 10 trillion dollars sheltered in these extraordinary territories into the global financial mechanism. The former through new stimulus plans. More indirectly, the latter accuses tax havens of capturing and managing an excess of liquidity in an unprofessional manner, which is not subject to rigorous monitoring and control by their holders, with the protection of secrecy being more important than the quality of the management. According to them, the extent of this tax evasion impacts the deficit of states and thus their debt, whose level limits the maneuverability of future generations. The exponential growth of public debt is also a factor of financial fragility and volatility that affects the growth rate of the economy. Consider this: for example, Indian assets in Switzerland alone are estimated at 1200 billion dollars: an amount multiple times that of India’s foreign exchange reserves.
The climate of corruption maintained by these tax havens remains obviously one of the main arguments for this blacklisting: ethically attractive, it is in reality more difficult to accept. Not that it is unfounded. But as indicated by a survey from the magazine “Alternatives économiques”, 100% of French multinational companies in the CAC 40, like their foreign counterparts, have subsidiaries in tax and judicial havens. These tools are used to shelter profits from taxes – the “off-balance sheets” of industrial companies – but also sometimes to pay in cash individuals who facilitate securing a contract – the so-called “cost of development” – despite prohibitions issued by the OECD and adopted by states. But what to do when it deals with a “contract of the century” that opens an as yet unexplored market and conditions, especially in times of crisis, thousands of jobs?
As for the countries that favor bank secrecy, it would be illusory to think that they would deprive themselves of an instrument of sovereignty as powerful as their raison d’être: “When you’re chased by a pack,” a former senior Luxembourg official well informed about the matter recently explained to the author of these lines, “you have to drop something.” Even if they express their willingness to “cooperate”, Switzerland, Austria, or Luxembourg have clearly indicated that their banks would act “on a case-by-case basis” and depending on the “justified and argued suspicions” contained in the files submitted. This is apparently the policy followed by Monaco: a Monegasque financial expert recently established in private a distinction between money laundering and simple tax evasion, the “latter not necessarily implying the former”: a difference which, in his view, justifies an independent assessment by banks of the Principality on a third country’s request. A distinction that the next G20 in London will no doubt have to assess the relevance of.
