Europe Tax Evasion Probe Going Global


Authorities worldwide were looking today to see if their citizens were dodging tax through Liechtenstein as attention in Germany, where the scandal started, turned to Monaco.

Vaduz Castle in Liechtenstein

Two weeks ago it emerged that Germany had bought a list of people believed to be hiding money in the principality from a former employee of a Liechtenstein bank.

Liechtenstein, which along with Andorra and Monaco was singled out earlier this month by the Organization for Economic Cooperation and Development (OECD) for being "un-cooperative tax havens", has reacted angrily to the leak.

Its prosecutors office said on Wednesday that it had launched a criminal investigation into the whistleblower and others over the alleged theft of client data.

Attention in Germany turned to Monaco on Wednesday with a visit to Berlin by Monaco head of state Prince Albert.

German Chancellor Angela Merkel was to use the visit to press the principality to comply with OECD norms on sharing information with other countries to prevent tax evasion, government spokesman Thomas Steg said.

The tiny principality on the Mediterranean near the French-Italian border -- dubbed a "sunny place for shady people" by author Somerset Maugham -- is prepared to work with the OECD, Monaco's finance minister Gilles Tonelli said.

"Monaco does not intend to distance itself from a general movement of information exchange as long as it is really applied by everyone," Tonelli told a news conference.

The Liechtenstein employee sold a disc to Germany's foreign intelligence agency allegedly containing the names of about 1,400 suspected tax dodgers, of whom about 600 are said to be Germans.

Germany paid more than 4 million euros to the whistleblower and has said it will cooperate, without charge, with requests from other countries for information.

The scandal has since snowballed, amid massive media interest, as tax authorities around the world have revealed close interest in the possibility that their citizens may also be hiding money illegally.

Investigators in the US, Britain, Australia, Italy, France, Sweden, Canada, New Zealand, Spain and the Czech Republic are among the countries hunting for taxpayers hiding their money in Liechtenstein.

IRS, Others Enter Fray

The US Internal Revenue Service (IRS) said on Tuesday it was investigating more than 100 US taxpayers, while Australian tax authorities said they were looking into 20 cases.

The French budget ministry said on Wednesday that it had a list of 200 names which it had received from British authorities. Britain received information from the same whistleblower who sold information to Berlin.

Italy has said it has obtained a list of dubious accounts in Liechtenstein, and press reports there say about 100 names are on it.

Liechtenstein has vowed to uphold its banking privacy and tax-haven status which provides the small principality with a lucrative income.

Liechtenstein's LGT Bank has alleged that the former employee who allegedly stole and sold the information was Liechtenstein citizen Heinrich Kieber, who worked for the bank between 1999 and late 2002.

It alleged Kieber was the subject of an international arrest warrant issued in 1997 by Spanish authorities over a real estate fraud case and was fined 600,000 Swiss Francs in Liechtenstein in October 2001.

His current whereabouts are unknown.