Tag Archives: Safe Deposit

Safe Deposit Box for Wealth Storage ?

In late June 2015 the Deputy Finance Minister of Greece Nadia Valavani revealed to Greek television that the government and banks had agreed that people would not be allowed to withdraw cash from safe deposit boxes for as long as the capital controls were in place.

Bank Safe Deposit Boxes

Earlier this year, on 1 April 2015, Chase bank in the US advised clients who rent safe deposit boxes from them that there would be some changes in their policies, by giving them this message,

Notice the the following condition:  “Contents of box: You agree not to store any cash or coins other than those found to have a collectible value.

Picture Courtesy “Safe 01” by Корзун Андрей, Wikimedia Commons.

The banks are convincing people to put their wealth into cash, and their cash into banks in the form of deposits. They’re being assisted by many of the world’s governments, which are increasing the level of legislation that controls what individuals are allowed to do with their own wealth.

After this is completed, the bank customers are “sitting ducks’ for confiscations of their cash holdings. These will of course be implemented by the banks, and in order to maximize the amount that will be taken, it will be necessary to force people out of other forms of wealth storage and into bank deposits.

And even in a confiscation situation, banks would be reluctant to raid safe deposit boxes, as they would a) have to force them open, and b) have to deal in some way with the non-monetary contents of the boxes, such as documentation and fine art. To do so would glaringly expose the banks as plunderers (assuming the theft of deposits had not already achieved that end).

In the future, we can expect to see more steps taken by banks and governments to squeeze people out of other forms of wealth storage like precious metal, fine art, jewelry, etc. and to deposit the wealth as cash in the banks.

The EU, US, Canada, and several other jurisdictions have passed bail-in legislation the last few years, opening the possibility for confiscating the cash deposits of bank customers, if they deem this necessary.

Believe it or not, you just wake up one morning, and your cash deposits have been raided.


Luxembourg set to internationalize Renminbi

Underlining the increasing role of the Luxembourg financial center in the internationalization of the Chinese Renminbi (RMB), Luxembourg’s Finance Minister Luc Frieden announced the launch of a new web portal dedicated to the development of activities linked to the currency in Luxembourg.

Grand Ducal Palace, Luxembourg

The new web portal forms part of ongoing efforts over the past few years to promote and to further diversify the Grand Duchy’s financial market and to secure the future of the financial center. The Government’s strategy for developing the Luxembourg financial center is based on four axes, namely strengthening existing pillars, creating new products and services, promoting the financial center abroad, and diversifying the financial center geographically.

The Grand Ducal Palace, Luxembourg. Picture courtesy of Ernmuhl.

Underlining the importance of positioning Luxembourg more internationally in a global financial market, Frieden explained that, given its rapid economic growth, China constitutes “an ideal partner.” Similarly, China is committed to internationalizing the RMB and is currently looking for access to global financial markets, the Minister pointed out, alluding to the fact that the Bank of China and the Industrial and Commercial Bank of China both now have their European headquarters in Luxembourg.

Luxembourg already plays a significant role in the international trade of the RMB, Frieden continued, citing the fact that RMB40bn (USD6.5bn) in deposits are held in the Grand Duchy and that RMB62bn in loans have been issued, and noting that 40 RMB-denominated bonds are listed on the Luxembourg Stock Exchange. Trade in the RMB and access to the RMB are vitally important for the Luxembourg financial center, in particular for the funds industry, Frieden ended.

The Luxembourg Government is not only reflecting constantly on the financial center’s future, but also on Luxembourg’s future economy and taxation, to ensure that its tax regime remains competitive and attractive for investors. At the same time, Luxembourg aims to guarantee legal certainty for investors, by ensuring that it is tax compliant, adopting the latest international regulations and standards in tax matters.

Tax & Money Havens

Austria – Introduce new taxes on banks

Following the recent banking summit, and Despite bitter opposition from its banks, the Austrian government has announced its decision to enter a bank tax in Austria. According to Finance Minister Josef Pröll, it is Merely a “question of justice”.

Austria’s Chancellor Werner Faymann has confirmed that the introduction of a bank levy is now inevitable, with or without backing from the European Union regarding a Europe-wide tax.

Although the precise details of the tax have yet to be determined, Faymann has made known that the new levy could be introduced from as early as 2011. Determined to consolidate the country’s budget, Pröll is eager to Implement the new levy as quickly as possible.

Proposals put forward by Chancellor Faymann include imposing a levy of between 0.07% and 0.1% on the taxable base. Other details, such as who is to pay the tax, and what the basis for calculating the tax will be, as well as the exact tax rate, have yet to be decided. As a benchmark, has proposed Faymann generating a volume of around EUR 500m annually.

A working group consisting of Representatives from the Chancellery, the finance ministry, issuing banks and other banks, will be set up in order to put forward proposals and to firm up details for the new tax. Nevertheless, Chancellor Faymann has underlined the fact that ultimate responsibility rests with both the government and parliament.

Having agreed in principal to the tax, Josef Pröll once again warned of the dangers of imposing too great a burden on the country’s financial institutions, and reiterates that the burden must not be borne by either borrowers or savers. According to Pröll, the greater the pressure imposed on the banks, the greater the pressure to pass that burden on.


OECD removed Austria from the grey list

Austria has now officially been removed from the Organization for Economic Cooperation and Development’s (OECD) “gray list” of countries Deemed uncooperative in international tax matters.

Indeed, Austria now appears on the OECD’s much-coveted “white list” of countries that have fulfilled the organization’s 12 official requirement to conclude double tax or tax information exchange agreements, Providing for administrative assistance in tax matters under Article 26 of the OECD Model Convention .

According to the Austrian Finance Ministry, Austria has in fact exceeded expectations, having signed 15 bilateral agreements In accordance with the OECD on tax information exchange standard.

Austria gave the go-ahead for the creation of legislation to relax its traditional banking secrecy laws and conform with OECD standards on tax information exchange at the beginning of the month, and has, since then, been busily Negotiating bilateral agreements ahead of the G20 summit meeting. However, it has made clear that its traditional bank secrecy laws will only be lifted for those accounts held by non-residents who are not subject to Austrian tax.