Parliamentary questions
WRITTEN QUESTION E-2425/03
by Maurizio Turco (NI) to the Council
(10 July 2003)

Subject: Harmonisation of tax on the income from the savings of non-resident Union citizens and abolition of banking secrecy

At the Feira summit on 19/20 June 2000 the EU finance ministers decided that as of 2011 the automatic exchange of information would be introduced for all Union countries in the interests of harmonising, at Community level, the tax on income from the savings of Union citizens. On 21 January 2003 the EU finance ministers initialled a policy agreement, which is subject to acceptance of equivalent measures by other third countries and stipulates that:

as of 1 January 2004 twelve Member States will initiate the automatic exchange of information;

Luxembourg, Austria and Belgium will initiate the automatic exchange of information "if and when" the Council unanimously agrees that Switzerland, the United States, Liechtenstein, Andorra, San Marino and Monaco accept the exchange of information on the basis of OECD's 2002 parameters, which define criminal and civil offences in the areas of taxation and fraud.

On 3 June 2003 the EU finance ministers approved an arrangement negotiated with Switzerland.

Can the Council answer the following questions:

Why do the third countries do not include the Vatican State, despite the fact that:

the central bank, the Istituto Opere di Religione (IOR) does not belong to any international monitoring body;

the IOR takes part indirectly in the payment systems of the euro zone - with dual access via two major banks, one of them German, the other Italian, which are themselves linked to the system - thereby evading surveillance by the banking authorities to which only direct participants are subjected;

it has no legislation to combat money-laundering;

it has not accepted the exchange of information on the basis of the 2002 OECD parameters, which define criminal and civil offences in the areas of taxation and fraud;

it has on several occasions been involved in financial transactions with serious implications, which have never been the subject of legal proceedings because of the concordat with the Italian Republic guaranteeing the Catholic hierarchy absolute impunity?

What arrangements will apply in overseas territories, in particular British ones, and, apart from Switzerland, which has signed a negotiated solution, what are the current positions of the United States, Liechtenstein, Andorra, San Marino and Monaco on the exchange of information on the basis of the 2002 OECD parameters?

3. Can the Council give an assurance that in Luxembourg, Austria and Belgium banking secrecy will be maintained at least until 2011, and say under what conditions it might remain in force even after that date?

E-2425/03
Reply
(8 December 2003)

1 - The European Council meeting in Santa Maria da Feira on 19 and 20 June 2000 decided that, as soon as agreement has been reached by the Council on the substantial content of the Directive and before its adoption, the Presidency and the Commission will enter into discussions immediately with the US and key third countries (Switzerland, Liechtenstein, Monaco, Andorra, San Marino) to promote the adoption of measures in those countries equivalent to those to be applied within the EU.

Moreover, at its meeting on 21 January 2003, the Council asked the Commission to enter into discussions with other important financial centres, so that they will adopt measures equivalent to those to be applied within the EU.

2 - With regard to arrangements in dependent or associated territories, at the Council meeting on 3 June 2003 the Council and the representatives of the governments of the Member States, meeting within the Council, stated in their resolution on taxation of savings income in the form of interest payments that "the United Kingdom and the Netherlands will do their utmost, within the framework of their constitutional arrangements, to ensure that appropriate measures in respect of the relevant dependent or associated territories (the Channel Islands, the Isle of Man and the dependent or associated territories in the Caribbean) are in place in sufficient time to enable the provisions of Directive 2003/..../EC to be applied from 1 January 2005 in accordance with Article 17 thereof, and for the application of automatic exchange of information (or, during the transitional period defined in Article 10, the application of a withholding tax) not later than 1 January 2005."

The Council is not in a position to inform the Honourable Member about the positions of Liechtenstein, Andorra, San Marino and Monaco concerning exchange of information on the basis of the OECD's 2002 parameters as the Commission is conducting negotiations with those countries on the subject.
With regard to the United States of America, the Council would remind the Honourable Member that, at its meeting on 21 January 2003, it considered on the basis of a Commission report submitted to the ECOFIN Council on 3 December 2002 that sufficient assurances had been obtained from the United States concerning the application of "equivalent measures" to those provided for in the draft Directive.

3 - Articles 10 and 17 of Council Directive 2003/48/EC on taxation of savings income in the form of interest payments lay down the transitional periods for the Member States mentioned by the Honourable Member and the conditions for implementing the provisions of the Directive.