Tax havens may cave in under global pressure

VADUZ, LIECHTENSTEIN: ���Who pays?��� asks a neon artwork in wealthy Liechtenstein���s elegant black granite cube of a museum. That question is of more than artistic interest to the family that rules the tiny principality and their 35,000 subjects.

Prince Alois agreed earlier this month to start following the rules set down by the Organization for Economic Cooperation and Development (OECD) in Europe aimed at curbing tax havens like his scenic patch of mountain valley between Switzerland and Austria, which owes much of its prosperity to its role as a place to put money. Liechtenstein is hardly alone.

With governments around the world straining to pay for bailouts and fiscal stimulus, some 35 or so offshore tax havens from Britain���s Channel Islands Jersey and Guernsey to the Cayman Islands in the Caribbean are under increasing pressure to let in more light.

One by one, they���re caving in. ���We���re in the middle of a power struggle, and the big countries can do what they like,��� said Michael Lauber, chief executive of the Liechtenstein Bankers Association.

A study by the Boston Consulting Group estimated that $7.3 trillion is stashed in offshore banking centres by people either taking advantage of low taxes or simply evading notice of tax authorities back home. Curbing havens is one of the issues facing the Group of 20 summit on the world economic crisis, which gathers rich and leading developing countries in London on April 2.