Banking secrecy effectively ended when the automatic exchange of information between European tax administrations on bank accounts held by non-resident taxpayers was imposed.

Adopted in 2013, the principle came into force in 2016. But what Luxembourg granted to others, it did not grant to its own tax administration. A banker could invoke bank secrecy--renamed professional secrecy--to refuse to provide information to the authorities on request, subject to investigations duly authorised by judicial authorities.

The latest directive on administrative cooperation in the field of taxation (DAC7) provides for access to the register of bank accounts (itself the result of the fifth anti-money laundering directive) to be given to tax authorities. It is in application of this text that Belgian tax authorities will have access to the balances of their clients’ assets.

In Luxembourg, DAC7 will be transposed by 1 January 2023, the finance ministry told Paperjam. “The modalities relating to access to the Luxembourg bank account register and the processing of data by the Luxembourg tax authorities in this context have yet to be defined,” a spokesperson said.

Even before 2016, the famous secrecy had been eroded as the provisions on knowing your customer (KYC) became more precise in the name of the fight against money laundering and the financing of terrorism. This had led to “non-compliant” customers being banned.

Answering questions relating to the identity of the client, their origin, domicile, as well as the origin of the funds deposited in Luxembourg has become the norm. And the questions have become more precise over time.

This story was first published in French in . It has been translated and edited for Delano.