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Close your own tax havens, Luxembourg tells US

BRUSSELS (AP) — Luxembourg's prime minister, who is under pressure to open his country's banks to outside scrutiny, told President Barack Obama yesterday to clamp down on tax havens at home before attacking those in Europe.

Jean-Claude Juncker said US authorities had to end schemes set up in US states including Wyoming, Nevada, Delaware and Florida if they wanted to tackle the global problem seriously.

Luxembourg, Switzerland and Austria are under pressure to drop bank secrecy rules at a Group of 20 leaders meeting of the world's major economic powers in London today.

Hoping to avoid being blacklisted as uncooperative tax havens, the three nations agreed earlier this month to cooperate with international tax investigations, breaking with a long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars.

"We know that right across the planet there are those who do not cooperate," said Juncker, who also leads regular economic talks between euro-zone nations.

He said British Prime Minister Gordon Brown, who will host the G-20 talks, "should ask Mr. Obama to put an end to the tax havens on his territory".

Juncker said it was unfair EU leaders and Obama had failed to address American havens earlier. The US states have become a magnet for foreign capital thanks to their flexible incorporation laws and minimal reporting requirements.

"By April 3, we will know whether all of this is being said just for purposes of the public gallery or whether they really want to find a proper solution for a serious problem that exists in the United States as well," Juncker said.

New rules to scrap banking secrecy in the EU by 2014 won the backing of the European Parliament's economic and monetary committee Tuesday. EU lawmakers say this helps hide some 200 billion euros ($266 billion) of tax revenue every year.

Britain, France, Germany and the United States have led the charge to impose economic sanctions against uncooperative tax havens when the G-20 leaders meet. Tax havens around the world are estimated to cost the United States $100 billion in lost tax revenue each year.