Liechtenstein's agreement to help Britain recover taxes on wealth hidden away in the tiny Alpine principality by UK taxpayers is only the latest sign that traditional tax havens are yielding to governments hungry for extra revenue during the economic crisis.
Still, experts say such country-to-country deals may not be enough to deter tax evaders.
The deal goes beyond similar accords signed with the United States and Germany. For the first time Liechtenstein has committed itself to ensuring British clients are tax compliant at home.
"The agreement signed [Tuesday] is a very significant development," said Jeffrey Owens, tax policy director at the Organization for Economic Cooperation and Development. "It shows that the days of bank secrecy as a shield behind which evaders can hide is rapidly disappearing."
The Paris-based watchdog group of rich industrialized nations has been at the forefront of efforts to pressure tax havens into ending their traditional silence on tax evasion.
The OECD will hold a meeting September 1-2 in Mexico to take stock of how well tax havens are cooperating since it first published a list of the worst offending countries in April. But according to Owens, it already considers that "we've made more progress in the last 10 months than in the last 10 years."
Switzerland, Luxembourg and Singapore - like Liechtenstein - are rushing to forge the requisite 12 bilateral accords the OECD has set as the standard for compliance. Failure to reach that number could lead to economic sanctions, France and Germany have warned.
Yet some experts see a flaw in most of the deals signed so far.
"The standard of proof that the inquiring country has to reach before it can submit an information request to a tax haven is so high, that they basically have to know all the information about which they're asking," said Richard Murphy, director of British-based policy consultants Tax Research LLP.
Moreover, tax evaders, who by some estimates have hidden more than $7 trillion in 35 offshore-banking centers around the world, often funnel money through several accounts in different jurisdictions, rendering bilateral accords useless.
"It is almost impossible for tax inspectors to create an audit trail connecting me to that bank account, unless I've been stupid or they strike very lucky," Murphy said.
Still, the accord between Liechtenstein and Britain breaks new ground.
The principality has agreed to compel its banks and brokers to seek assurances from British customers that they have disclosed their Liechtenstein assets to London. Clients who fail to do so by 2015 will have their accounts closed. Unlike previous agreements, this means that Liechtenstein's financial industry will face pressure from its own government to ensure its customers are tax compliant at home.
"The agreement is specific to the British tax system and can't be used as a blueprint, but it could show the way for future accords of this kind," said Max Hohenberg, spokesman for the Liechtenstein government.
Murphy, who campaigns for greater tax transparency, isn't convinced the Liechtenstein deal is enough.
"We are making progress, but we're a long way from seeing a solution yet," he said.
Revenue services in several countries are already wising up to the fact that without some sort of active disclosure on the part of tax havens - such as by automatically reporting the real owners of accounts and companies to their governments - investigations will fail at the first hurdle, Murphy said.
"They know that behind the PR schmoozing there is a problem with this process," he said.
Murphy said some way has to be found to make available "smoking gun" evidence tying an individual to an offshore account.
Getting tax havens to agree to actively give up the names of their foreign clients is a step too far, even for Liechtenstein.
"At no point will we automatically provide information to other countries," Hohenberg said. "We're trying to reach agreements that will block any moves toward automatic disclosure."