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Is Time Running Out for Tax Havens such as Fürstentum Liechtenstein
Photo of Liechtenstein courtesy of the BBC
"Liechtenstein has existed for hundreds of years and weathered many storms" - Prince Max von und zu Liechtenstein
BBC: The bankers in their grey suits and silk shirts looked a bit bemused.

The annual press conference of LGT, the Liechtenstein bank at the centre of the tax evasion controversy, is usually a dull and dry affair.

But it wasn't this year. The room was packed.

And every question was about the scandal in which German intelligence purchased a data disc stolen from the bank, filled with details of Germans who allegedly tried to evade paying tax back home.

Fourteen other countries, including Britain, are conducting inquiries into their own citizens on the disc for tax evasion.

The head of the LGT, His Serene Highness Prince Max von und zu Liechtenstein, is a member of the principality's ruling family.

Speaking afterwards, when I pressed him on the £100m Britain expects to get back from UK taxpayers who used LGT to evade paying tax, he told me Liechtenstein was being treated unfairly - and that Britain, too, was a keen player on offshore finance markets.

"There is tax competition going on on a global basis. The British have positioned themselves very well in a number of areas - not only in their [dependent] territories, but also in the UK," he said.

The British government says it is keen to clamp down on people using other havens to hide their money.

But other critics also say Britain is being inconsistent, with tax havens such as Bermuda or the Cayman Islands operating from British dependent territories.

"Because of the number of places that the UK allows to operate as tax havens, our role in providing the secrecy spaces that these locations provide, which harbour crime, is greater than Liechtenstein's," says Richard Murphy, a campaigner on tax issues.

"We're the biggest tax haven operator in the world. They've been seen as useful. They've brought money into London, Switzerland and other financial centres, and for that reason, London has tolerated them." Is Time Running Out for Tax Havens? >>> By Ray Furlong, Vaduz

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