July 14, 2012 / 11:19 AM / 5 years ago

German state buys Swiss data to track tax frauds-reports

BERLIN (Reuters) - Authorities in the German state of North Rhine-Westphalia have bought a CD from Switzerland containing wealthy Germans’ bank details as part of a drive to identify tax evaders and are considering buying another two, media reports said on Saturday.

The CD the state has already bought contains the names and bank details of some 1,000 wealthy Germans who are customers of the Zurich branch of Coutts, the private banking arm of Britain’s Royal Bank of Scotland (RBS.L) best known as banker to Britain’s Queen Elizabeth, the Financial Times Deutschland said in its online edition on Saturday, citing inside information.

It can be assumed that these customers avoided paying large amounts of tax, the paper said.

Investigators said the clients whose data was stored on the CD had fortunes in the double and triple-digit million area, according to a separate article on Der Spiegel’s website, which also said North Rhine-Westphalia had examined 10 percent of the data on the first CD before buying it.

“We are aware of the continued media speculation regarding a potential breach of client data secrecy at Coutts,” a spokeswoman for Coutts said.

“Following thorough investigation, we have no evidence to suggest any such breach has taken place,” she added.

The state finance ministry neither confirmed nor denied that it had purchased the CD.

“We have no indication that this is correct,” said Mario Tuor, spokesman for the Swiss governmental unit tasked with negotiating the tax dispute.

The origin of the CD was not clear but in 2010 several German states including North Rhine-Westphalia said they had bought CDs containing Swiss banking data from whistleblowers to help identify German tax evaders. This led thousands of Germans to declare their financial holdings to avoid risking jail sentences.

North Rhine-Westphalia paid 3.5 million euros for the CD, according to the FTD, in a move which threatens to further sour already strained relations between the two countries on tax issues.

The west German state is considering buying another two CDs containing tax data, Der Spiegel said, without citing sources or giving further details. North Rhine-Westphalia’s finance ministry was not immediately available to comment on this report.

Germany reached an agreement with Switzerland last September to levy taxes on German assets in Swiss bank accounts that is due to come into effect next year pending German parliament approval. As part of the deal Germany will no longer be allowed to buy CDs containing tax data.

“We cannot agree to the planned tax agreement with Switzerland as it stands and without the approval of states ruled by the Social Democrats and Greens, it cannot come into effect,” said Norbert Walter-Borjans, finance minister of the North Rhine-Westphalia, which is run by Social Democrats.

“It is therefore only logical that we don’t need to act as if the agreement already applied,” he told Reuters.

German tax authorities raided Credit Suisse CSGN.VX clients and French officials searched the homes of UBS UBSN.VX employees this week, deepening the crackdown on foreigners hiding money in Swiss offshore accounts to dodge taxes.

Walter-Borjans said the raids showed it was necessary to obtain information by purchasing CDs in order to uncover tax evasion.

Reporting by Michelle Martin in Berlin, Catherine Bosley in Zuerich and Tom Kaeckenhoff in Duesseldorf; writing by Michelle Martin; editing by Keiron Henderson

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