May 22 (Bloomberg) -- Luxembourg and Liechtenstein, criticized for failing to implement international tax standards, entered into talks on a bilateral treaty in an effort to show their willingness to cooperate.

The double-taxation treaty would conform to standards set by the Organization for Economic Cooperation and Development. Luxembourg Treasury Minister Luc Frieden said the agreement should be completed later this year.

“I’m convinced that our goal to conclude 15 double-tax treaties in line with OECD standards by the end of the year is absolutely realistic,” Frieden told reporters in Luxembourg.

Leaders of the Group of 20 nations have clamped down on countries that don’t comply with tax global standards as part of efforts to battle the global economic crisis. At the behest of the G-20, the OECD published a “gray list,” which identified Luxembourg and Liechtenstein as countries that haven’t yet implemented internationally agree-upon tax standards.

Frieden said his country began talks with the U.K. on a double-taxation treaty this week and that another agreement with France is “almost ripe” for signing by the end of the month. Talks with Germany have been “burdened by recent events,” a reference to heightened tensions with Europe’s largest economy.

Luxembourg and Liechtenstein were among those that fended off an accusation by German Finance Minister Peer Steinbrueck earlier this month, in which Steinbrueck compared their tax practices with one of Africa’s poorest nations, Burkina Faso.

Berlin

“Of course I will invite them to the follow-up conference in June in Berlin: Luxembourg, Liechtenstein, Switzerland, Austria, Ouagadougou,” Steinbrueck said May 5, making reference to a conference and to the African country’s capital.

Liechtenstein, wedged in the Alps between Switzerland and Austria, announced in March it will comply with OECD transparency standards. Prime Minister Klaus Tschuetscher, speaking alongside Frieden, said the double-taxation treaty with Luxembourg would be the first of its kind under OECD rules.

Liechtenstein is also in talks with the U.K. on a tax- information sharing agreement that would entice British investors in the principality to declare their holdings. The government in Vaduz said on April 2 it expected a “swift” agreement with Britain. Tschuetscher said today that those negotiations, as well as those with the U.K. weren’t delayed.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net; Patrick Donahue in Berlin at at pdonahue1@bloomberg.net.

Last Updated: May 22, 2009 06:14 EDT