In its February newsletter, Servissim revealed that:

'Andorra has consistently said that it would not do away with bank secrecy, but if everyone else applied the tax it would do so too, although it has yet to decide at which levels and how the tax might be enforced.'

The newsletter then went on to outline the potential advantages of the deal for the jurisdiction, observing that:

'Andorra is almost bound to sign up to the agreement and would find it very hard to justify lower rates. There is no political backwoods pressure for a lower rate and the Government itself has an interest in gaining some extra income.'

'25% of the new tax remains in the country where the deposit is held and a quick computation of the annual declarations made by the local banks as to assets under management would conservatively indicate a windfall for the government of around 2 million euros per year, if deposits remained stable.'

However, the Andorra-based company ended by concluding that the agreement is ultimately a fudge which has left many tax loopholes untouched:

'No mention is publicly made of taxing capital gains and income or profits from other investments such as property. In fact the whole tax edifice looks to be shot through with holes,' Servissim suggested, continuing:

'If investors in general were to turn to capital growth strategies such as investment in zero-coupon bonds or fixed property and take their profits as income, no one appears to have begun to think of what the consequences might be.'