Tough German Stance on Tax Evasion Brings Tensions with Switzerland, Other Neighbors

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Of all the European Union member states, Germany has taken the toughest stance against tax evaders.

German officials have called on the bloc to adopt a strict policy

that would pressure Switzerland, Luxembourg and Liechtenstein to give up their banking secrecy systems.

Berlin’s position led to serious tensions with Switzerland earlier this year.

The Swiss authorities were furious after Wolfgang Schäuble, the German finance minister, agreed in February to pay a Swiss bank employee 2.5 million euros ($3.2 million)

for a CD that was said to contain the names of 1,500 Germans with Swiss bank accounts who might have evaded taxes in their own country.

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The German authorities also bought a disc containing information on thousands of clients of UBS and Credit Suisse that was offered to the state of Baden-Württemberg in February.

A former finance minister, Peer Steinbrück, also had no qualms about paying for information on German taxpayers with accounts in Liechtenstein, Switzerland and Luxembourg.

In this context, Credit Suisse’s offices in Germany were searched this month as part of an investigation into

accusations that its employees might have helped clients evade taxes, prosecutors in Düsseldorf said.

About 150 police officers, prosecutors and tax inspectors searched all 13 Credit Suisse offices and branches in Germany,

said Johannes Mocken, a spokesman for the prosecutor’s office.

Mr. Mocken said it would take weeks to sift through the files that were seized.

The searches were prompted by data contained on a compact disc the authorities recently purchased from an informant, Mr. Mocken said.

He said the authorities were looking into the accounts of 1,100 customers of Credit Suisse.

UBS, the largest Swiss bank, avoided prosecution in the United States last year after admitting that it had helped clients evade taxes from 2000 to 2007.

It paid a $780 million fine and agreed to disclose the account details of more than 4,700 clients. 

In 2008, Germany purchased data on potential tax evaders from a banker in Liechtenstein.

That caused a diplomatic furor with the Liechtenstein authorities over the stolen data.

One tax evader uncovered by the German investigations was Klaus Zumwinkel,

who was forced to resign as chairman of Deutsche Post as a result.

He was given a suspended sentence and fined 1 million euros for evading that amount of taxes by using a trust in Liechtenstein.

Some German politicians have challenged the way the government has obtained the information.

The Free Democrats, partners in Chancellor Angela Merkel’s coalition government, have said they are uneasy about buying stolen data.

By buying the information, party officials say, the government benefits from a crime, and may encourage more people to steal information.

Last January, a German real estate broker, Elmar Bernhard Schulte, was awarded 7.3 million euros in damages by a Liechtenstein court, according to this article in the New York Times.

Mr. Schulte’s account details were on a disc of data stolen by an employee of a Liechtenstein bank and sold to the German finance ministry in 2008.

Mr. Schulte argued that the bank should have warned him that his account information had been stolen, so he could have settled with the German authorities.

Instead, a German court found Mr. Schulte guilty of tax evasion and fined him 7.5 million euros.

“Credit Suisse is working in close cooperation with the relevant local authorities,” said Marc Dosch, a spokesman for Credit Suisse in Zurich.

“As this concerns an ongoing investigation, we can provide no other comment.”