Tax Justice Luxembourg responds to #OpenLux

Our good friends at the Collectif Tax Justice Lëtzebuerg (Luxembourg), which launched in 2016, have responded to the #OpenLux revelations. Here is their English translation of the original French press release, #OpenLux : Lumière sur la face cachée du Luxembourg.

Press release from the Collectif Tax Justice Lëtzebuerg (CTJL)

#OpenLux: Casting Light on Luxembourg’s Dark Side

The Collectif Tax Justice Lëtzebuerg (CTJL) has taken note of the #OpenLux investigation, published on this day by many national and international media outlets. These revelations are the result of a collaborative investigation carried out by Le Monde, with the participation of many journalists and investigative media, including WOXX, over the past year.

Despite some real and concrete advances in terms of transparency and openness in Luxembourg in recent years, such as the establishment of a Registry of Beneficial Ownership (RBE), which also made this investigation possible in the first place, these efforts remain insufficient. We regret that the country and its leaders have not managed to break with its past as a secrecy jurisdiction (or “tax haven”, even if this term is not precise enough), despite the assurances offered by the Prime Minister during his last address on the State of the Nation. The continued existence of many companies without any real economic substance bolsters fears that the financialisation of the Luxembourg economy will continue, at the risk of the country’s productive and creative economies.

The global COVID-19 pandemic underlines in several ways how interdependent humanity is and how much collective solutions are needed to overcome not only the disease but also the deep socio-economic injustices and inequalities that have facilitated the spread of COVID-19 in the first place. The adverse ecological impact of Luxembourg’s financial centre because of investments into polluting industry by investment funds is also worrying, as highlighted in a recent report by Greenpeace Luxembourg.

The Luxembourg government, which reacted quickly to the survey by setting up an information page (www.openlux.lu), needs to show real political will to combat tax evasion by multinationals and high net-worth individuals. It is not enough to hide behind excuses such as the application of the – alas insufficient – standards of the OECD or the European Union (as highlighted in particular by the adoption of the European Parliament Resolution of 21 January 2021 on the reform of the European Union’s list of tax havens). Advertising campaigns such as “Luxembourg – Let’s Make It Happen” cannot replace building a real culture of openness and good governance in the public interest.

In order to seize the opportunity offered by these latest publications, the CTJL believes that the Luxembourg authorities should:

• Strengthen the capacities of the CSSF, the Ministry of Finance, the Luxembourg Business Registers, and the Financial Intelligence Unit, in order to establish a balance with the vast private tax avoidance industry, notably the Big Four;
• Conduct an in-depth public debate on the risks of the financialisation of the Luxembourg economy and its impact on climate change;
• Renew Luxembourg’s international solidarity with its neighbours and other countries of the international community by fighting against tax evasion by multinational companies and wealthy individuals in order to avoid extracting the revenues needed to fight the COVID-19 pandemic, the climate crisis, and inequalities;
• Legislate on due diligence for private companies, including in the financial sector ;
• Support investigative journalism and develop an action plan to protect journalists and media workers in Luxembourg and internationally;
• Undertake in-depth reforms and adopt ambitious and comprehensive legislation on whistleblower protection;
• Investigate diligently the cases of fraud, money laundering or organised crime reported in this investigation as well as in previous and future revelations in order to protect the rule of law and to strengthen national and international confidence in Luxembourg.

Press release by the Collectif Tax Justice Lëtzebuerg (CTJL), 8 February 2021