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Eversheds comment: US efforts the catalyst for change on banking secrecy in Luxembourg

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    Commenting on news today that Luxembourg is to ease the secrecy surrounding its banking system, Ben Jones, tax expert at global law firm Eversheds, says:

    "The writing has been on the wall for banking secrecy across Europe for several years now. Countries such as Switzerland and Luxembourg that have built their banking sectors on strong secrecy laws have long been resisting European attempts to pierce the secrecy veil and were largely successful until the US began to focus its attention on the issue.

    "The US attack on Swiss banks has given other EU countries such as the UK and Germany the opportunity to strike agreements with Switzerland that to an extent tackle tax evasion through Swiss banks and it seems to be that it is the broader efforts of the US to tackle tax evasion through overseas bank accounts (by way the Foreign Account Tax Compliance Act(FATCA)) that have now caused Luxembourg to change it stance on information exchange and banking secrecy with the rest of the EU.

    "As a reaction to the US FATCA provisions, Luxembourg is shortly to reach an agreement with the US to exchange information on US citizens that hold bank accounts in Luxembourg - as their Prime Minister said, it then becomes very difficult for Luxembourg to take a different stance with other EU member states."

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