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Luxembourg report Luxembourg report
by Euro Reporter
2011-11-08 07:04:04
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Commission takes Luxembourg back to court over waste water treatment

The European Commission is referring Luxembourg back to the European Court of Justice for poor treatment of urban waste water. The Court previously ruled in November 2006 that Luxembourg was failing in its obligation to treat and dispose of urban waste water in an adequate manner. Nearly five years after the Court’s ruling, four agglomerations in Luxembourg do not yet comply with EU legislation, including the capital. On the recommendation of Environment Commissioner Janez Potoinik, the Commission is asking the Court to impose fines, suggesting a lump sum of 11 340 € and a daily penalty payment of 1 248 € until the obligations are fulfilled.

Commissioner Janez Potoinik said: “Bringing a Member State back to Court for a second time is not an action the Commission takes lightly. However, untreated urban waste water is detrimental to the quality of Europe’s rivers, lakes and coastal waters and a threat to public health. Delays in providing citizens with the necessary levels of protection are unacceptable”. The European Court of Justice ruled against Luxembourg in November 2006 for bad application of the 1991 Urban Wastewater Treatment Directive regarding discharges into sensitive water bodies.

Luxembourg has designated its whole territory as a “sensitive area” and initially chose to comply with its obligations by aiming for an overall reduction of 75% of nitrogen and phosphorous from all treatment plants (an alternative compliance route proposed by the Directive). Following the Court ruling, Luxembourg opted to comply with the Directive by imposing the more stringent treatment required for agglomerations of more than 10,000 people. Luxembourg contains 12 such agglomerations, four of which are still not compliant. While some works have been planned and are expected to finish by the end of 2011, works on two urban waste water treatment plants have been seriously delayed. These concern the extension of the Bleesbrück plant in the town of Diekirch and the connection of the Bonnevoie plant to the Beggen treatment plant, in the city of Luxembourg.

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Settlement competition


Luxembourg’s central bank and Clearstream have unveiled a new central securities depositary, as competition heats up in the post-trade business ahead of new clearing regulations. The new entity, LuxCSD, is a 50/50 joint venture between the Banque Central du Luxembourg and Clearstream International, Deutsche Börse's clearing and custody unit. A central securities depositary settles trades, earning money on the collateral it holds. The new CSD will settle securities with central bank money and provide custody services for a range of securities.

Opportunities for CSDs are increasing because of the European Market Infrastructure Regulation and the US Dodd-Frank act, which will push the majority of over-the-counter derivatives onto a central counterparty for clearing. This will require high levels of collateral to be logged against trades and create opportunities for CSDs and for new entrants to the market. The new CSD will connect directly to the European Central Bank’s planned Target2-Securities platform. T2S aims to harmonise the settlements system across Europe, settling exclusively in central bank money and giving CSD members the option of settling cross-border securities transactions on just one platform. Currently, there are 41 CSDs operating in Europe.

T2S will also lower the costs of cross-border settlements. The ECB estimates that costs in Europe can be up to 10 times higher than in the US, where securities are settled in one place at the Depository Trust & Clearing Corporation. T2S will bring costs down to 15 euro cents per transaction. Established as an initiative in 2008, T2S hit the headlines again in September when the ECB announced that it had been hit by a second delay. The platform, which was set for implementation in 2014, is now due in 2015.

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Germany sniffs out Luxembourg tax evaders


Switzerland and Liechtenstein are no longer the tax havens they used to be for wealthy Germans. Now German authorities are tracking down untaxed funds in the tiny country of Luxembourg, too. German authorities expect to see up to 900 million Euros ($1.2 billion) in recovered taxes after the purchase of a disk containing banking details of thousands of potential tax evaders. The finance ministry in the western state of North Rhine-Westphalia confirmed Friday that it had obtained information on German-held bank accounts at a Luxembourg subsidiary of HSBC.
 
The German Tax Union, whose members are German tax employees, welcomed the news, saying the purchase of bank data from neighbouring countries was the most efficient way to track down unpaid taxes. "What's new is that it's Luxembourg," the union's chairman Thomas Eigenthaler said in an interview. "We thought that they were trustworthy there, but we must consider Luxembourg a de facto tax haven - and assume that this is just the tip of the iceberg," he added.
 
Eigenthaler estimated that some 50 billion Euros in untaxed German funds were hidden in Luxembourg. He said the investigation in Luxembourg had gone too far to allow tax cheaters to pay up and got off scot-free, as has been the case in similar incidents in Germany. In September, Swiss bank Credit Suisse agreed to pay Germany 150 million Euros to save its staff from prosecution for allegedly helping wealthy German tax dodgers.




    
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