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Austria loosening bank secrecy

April 27, 2013

Chancellor Werner Faymann has said he's aiming for Austria to agree to loosen its banking secrecy laws before an EU summit next month. The May 22 meeting will take on the fight against tax evasion in the bloc.


Faymann told broadcaster ORF on Saturday that on the issue of banking secrecy he wants Austria "to achieve a result for an exchange of data in the interest of fighting fraud in Europe."

The EU has said it wants to curb tax dodging, which is estimated to cost the bloc around 1 trillion euros ($1.30 trillion) each year in lost income. Austria became the EU's last holdout on banking secrecy after Luxembourg changed its position on the issue last month.

But on Friday Faymann, of the center-left Social Democrats, and his Vice Chancellor Michael Spindelegger, of center-right coalition partners the People's Party, announced that they were open to negotiations over the automatic exchange of foreigners' banking data in the EU.

"The biggest economic damage would be if we got the reputation of protecting frauds," said Faymann. "Austrians don't find this necessary and I have spoken with bank managers who also don't find it necessary."

Even Finance Minister Maria Fekter, who has been Austrian banking secrecy's most ardent defender, said she supported the joint action, which entails three points of "decisive relevance."

Those points require an exchange of bank account data at least in line with Organisation for Economic Cooperation and Development standards, revealing owners of trusts and mailbox companies and taking into account bilateral tax deals already in place with Switzerland and Liechtenstein.

Faymann assured Austrians that despite the shift in stance, banking secrecy for citizens would be preserved.

"Our own banking secrecy is not affected," he said. "We ourselves want the exchange of data to make it easier to fight fraud."

dr/jm (Reuters, AFP)

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