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Liechtenstein fires the gun on reduced bank secrecy

The Liechtenstein government has bowed to international pressure and accepted OECD standards on transparency and information exchange in tax matters. In a declaration, it also confirmed it will support international measures against non-compliance with tax laws.

The tiny European country, which has a total population of just over 35,000, is run by the Princely House of Liechtenstein, one of the continent's oldest noble families.

"We are currently experiencing a fundamental and rapid change at the global level in the direction of stronger cross-border cooperation and international regulation," said Hereditary Prince Alois von und zu Liechtenstein (pictured), who took over Head of State duties from his father in 2004.

"With today's declaration, the Liechtenstein government is sending a signal that it is participating actively in the regulatory dialogue of financial centres without giving up Liechtenstein's identity or the advantages of a reliable and well-regulated small State. I am convinced that this will help us strengthen the trust of our clients in our financial centre."

Liechtenstein will negotiate bilateral agreements for cooperation in cases of tax fraud and tax evasion with other countries. On the thorny issues of privacy and client confidentiality, the government claims these will be protected.

"Our bank secrecy has always served to ensure the legitimate protection of the privacy of the citizen, which we will continue to retain. However, we want to make clear that bank client confidentiality in future cannot be misused to facilitate tax crime," said Prime Minister Otmar Hasler.

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