Typically, major countries issue ringing denunciations when privacy guarantees are breached and secret information is disclosed, particularly when such disclosures concern those nations’ wealthiest individuals. But the leak this week of information on tens of thousands of offshore accounts, many set up by German banks, was received with glee by German officials.

“I am pleased about these reports,” said Finance Minister Wolfgang Schauble on German radio.


Berlin is hoping the disclosures will provide some leverage in its efforts to drum up support for its long-running fight against international financial systems that make it easy for the wealthy to hide their money.

Germany has lobbied for years within international organisations, including the Group of 20 and the Organisation for Economic Cooperation and Development (OECD), to clearly define tax havens to pressure such jurisdictions to fight tax avoidance and comply with money-laundering statutes and other measures aimed at dirty money. But the efforts have been hampered by reluctance among some of its international partners, including some within the European Union (EU), that do not share the German sense of outrage.

“I think that such things as have been made known will increase the pressure internationally, and we will be able to increase the cooperation with those who have been more reticent,” said Mr. Schauble in an interview with Deutschlandfunk radio.

He was among those who made sure that Cyprus, the tax haven that received a bailout last month, would impose levies on its largest depositors in exchange for the EU’s support. “We don’t like this business model, and we hope it is not successful,” said Mr. Schauble. “And when it becomes insolvent, as in Cyprus, they can’t expect it to keep being financed.”

But the information that has trickled out has also tarnished German banks, and clearly the German authorities hoped to use the leak to gain ground in their own struggle to bring tax evaders to justice.

Many Germans are listed among the wealthy in the data dump that was obtained by the International Consortium of Investigative Journalists, based in Washington, and shared with select news media outlets around the globe, including two in Germany.

Hot topic

Economic justice has been a hot topic in Germany. The nation’s sense of social justice is strong, and the government has gone to great lengths to obtain information about its wealthiest residents who sneak money into Switzerland or Liechtenstein to avoid the hefty income tax, which can be as high as 45 per cent.

German banks, too, may feel the pressure from the release of the information, which states that international financial institutions have “aggressively worked” to help wealthy clients use offshore banking facilities in places like the British Virgin Islands.

Deutsche Bank, Germany’s largest lender, vigorously defended the legality of its management services and insisted that clients were advised to properly report all of their taxes.

Mr. Schauble conceded that the information in the report was not necessarily evidence of wrongdoing. He nevertheless called for the German news outlets with access to the information to make it available to the authorities.

The leaked records reported on Thursday include data mainly from the British Virgin Islands, the Cook Islands and Singapore. Not all of those named necessarily have secret bank accounts. Some only conducted business through companies they control that are registered offshore. — New York Times News Service


The rich who stash away cash offshore April 5, 2013

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