Tax Evasion Off The Agenda As Liechtenstein And US Sign Treaty

by Ulrika Lomas, Tax-News.com, Brussels

11 July 2002

It was announced this week that the United States and the Principality of Liechtenstien have signed a mutual legal assistance treaty designed to combat money laundering and terrorist financing.

The agreement, which has yet to be approved by the US Senate and the Alpine jurisdiction's parliament, will facilitate foreign investigations into tax fraud, money laundering, and other financial crimes.

However, according to reports, simple tax evasion does not fall under the remit of the agreement, as the result of a Liechtenstein law which states that the non-payment of taxes is an administrative matter into which foreign investigators may not probe.

Speaking following the signing of the treaty on Monday, Prime Minister Otmar Hasler expressed pleasure at the way that the talks had gone. 'This is a big step in bilateral ties with the United States,' he told reporters.

In the wake of the September 11 attacks, the United States has stepped up its campaign to cement legal assistance treaties with all of the world's major financial centres. However, the US efforts have come under fire from multilateral organisations such as the OECD, which have argued that the US's 'piecemeal' approach makes countries less likely to cooperate with international initiatives.

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