Financial Secrecy Still Reigns Strong

October 4, 2011 International Tax Cooperation

Financial SecrecyLONDON – Financial secrecy across the world is not seeing any noticeable declines, and Switzerland is currently leading the pack as the least transparent country in the world.

According to a new study published on October 4th banking secrecy remains to be an internationally prolific and present issue. The study, which was published by the nonpartisan Tax Justice Network, contained a newly compiled global Financial Secrecy Index which ranks countries around the world based on the severity of their current financial secrecy rules and the prominence of the jurisdictions as financial centers.

According to the report, Switzerland is currently the most prominent secrecy jurisdiction in the world, and its current set of signed information sharing agreements do not increase financial transparency. The study attributed Switzerland’s high opacity ranking to the widespread involvement of local financial institutions in the administration of international trusts and offshore companies for the purposes of hiding assets and capitals.

The authors of the report acknowledged that governments around the world are signing an increasing number of international information exchange agreements for the sole purpose of being placed on the OECD “white list”. However, according to the Tax Justice Network, the agreements were regarded as inadequate at providing fiscal transparency, and further means must be instated.

The Financial Secrecy Index, which was compiled by the Tax Justice Network, evaluated 71 countries regarded as offshore financial centers. Amongst the inspected countries Switzerland, the Cayman Islands and Luxembourg were ranked as the least transparent. Amongst developed nations the USA was ranked as the 5th most opaque country, with the UK, Canada and the Netherlands ranking 13th, 24th and 39th respectively.

Photo by JasonBechtel