Banking confidentiality is still important
Austria shows the way.
In a world where financial privacy is becoming increasingly difficult to obtain, it’s heartening to hear that Austria is toughing it out alone and refusing to relinquish its constitutionally protected banking confidentiality.
It is now the only EU country to take this stance, after Luxembourg, another historic centre of financial discretion, this week agreed to disclose its foreign residents’ financial details with the governments in their home countries. HNWs who originally chose Luxembourg for its banking confidentiality must be encouraged to hear that, at least for the time being, there is one other European country that does not seem intent on blabbing about its citizens’ private matters in the interests of fighting tax evasion.
When European finance ministers meet this weekend in Dublin, Maria Fekter, Austria’s finance minister, will make the important point that fighting tax evasion is not mutually incompatible with preserving financial confidentiality. She has said today that Austria will "stick to bank secrecy", at the same time as doing everything it can to prevent tax evaders and money launders storing their money there. How long Austria can hold out, however, is uncertain, as she will no doubt come under heavy fire from her European counterparts.
As I wrote last week when the Guardian unveiled its investigation into offshore banking on the British Virgin Islands, not everyone who chooses to place their money in a jurisdiction other than that in which they live or do business is involved in nefarious goings-on. Clients have a right to expect privacy in their financial matters when they are doing nothing wrong.
But this distinction — between criminality and legitimate, private, offshore banking — is increasingly being blurred by the media and governments. Austria’s commitment to retaining banking confidentiality proves its commitment to the latter, rather than constituting an invitation to those who have something to hide.
This piece first appeared in Spear's magazine