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News : EU Economy Last Updated: Apr 24, 2009 - 5:31:05 PM


Germany paid up to €5m for DVD listing 750 tax evaders that was provided by ex-employee of tax haven Liechtenstein’s biggest bank
By Finfacts Team
Feb 18, 2008 - 4:02:39 AM

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St. Nicholas' Parish Church and Gutenberg Castle, Liechtenstein.

The Financial Times reports today that Germany paid at least €4m for information that led to the arrest of Klaus Zumwinkel, Deutsche Post chief executive, before he resigned last week. The data could claim hundreds more victims in the biggest tax evasion crackdown in the country’s recent history. Zumwinkel is reported to have evaded about €1 million. 

A finance ministry spokesman told the Financial Times that the ministry and the chancellery had authorised the BND intelligence service to pay a former employee of LGT, Liechtenstein’s biggest bank, for a DVD containing a list of German tax evaders.

The news of the payment, disclosed by the Der Spiegel (English report) weekly, underlines the value of the data to the German government, which has with limited success sought to recover billions in unpaid taxes through a series of amnesties.

Interior Minister Wolfgang Schäuble, from Chancellor Angela Merkel's Christian Democrats, told Spiegel:  "I have zero understanding for this kind of greed. Uncontrolled capitalism, greed and massive losses on speculative investments -- that is a combination that makes people furious." Peer Steinbrück, the Social Democratic Finance Minister, told the online version of the weekly Die Zeit: "It is the elites who are threatening to cause the system to collapse."

The list is understood to include account details of about 750 German nationals who circumvented taxes by parking money in trusts managed by LGT. After the raid on Mr Zumwinkel’s house on Thursday, tax investigators and prosecutors are expected to launch up to 150 investigations this week.


One person familiar with the case said it was “in the order” of €4m to €5m ($7.3m, £3.7m).

Switzerland has been the favoured tax evasion location for wealthy French nationals for generations and to a lesser extent Monaco while the tiny Alpine principality of Liechtenstein has served the same purpose for Germans.

“The political implications of this are going to be great,” John C. Kornblum said to the New York Times. The former American ambassador to Germany who is a banker in Germany said: "In the US, we send people off to prison and say ‘good riddance,’ but it doesn’t actually shake people’s belief in the system. Here, it does.”

The German Tax Union, an advocacy group, estimates that Germany loses €30 billion a year to tax evasion. The had a 15-month tax amnesty programme that ended in mid-2005. But it brought in only recouped €5 billion.

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