InfoWatch analytic lab reports, Britain has approached Germany to buy data stolen from a Swiss bank in an effort to discover details of accounts hidden in the country by potential UK tax evaders. Germany received approval on Thursday from government lawyers to purchase a disc from a Swiss informant containing up to 1,500 names of Swiss account holders, on the grounds that the evidence could be used to pursue tax evaders.
Revenue & Customs is intent on moving quickly to capitalize on the German move to obtain details of accounts of British citizens included in the stash of stolen data.
The Revenue believes that after the Channel Islands, Switzerland is the pre-eminent jurisdiction for undeclared offshore accounts, accounting for several hundred million pounds of lost revenues each year.
Obtaining Swiss bank details would also provide a boost for Revenue & Custom’s broader crackdown on tax evasion by further undermining the perception that Switzerland remains a haven for evaders.
A number of German politicians, as well as the Swiss government, have criticized Berlin’s decision to purchase the stolen data.
Although the same criticism is likely to be leveled at the Revenue, the UK tax authorities are allowed to pay a reward for information in return for extra taxes collected.
The Dutch, Belgian and Austrian governments have also signaled they wish to buy data from the same disc relating to their citizens.
The Revenue’s bid to buy the disc mirrors a similar move two years ago in which it paid a former employee of LGT, Liechtenstein’s biggest bank, for what was described as a “gold mine” of data.
The affair led to a ground-breaking deal last year under which Liechtenstein agreed to co-operate with the UK in a crackdown on tax evasion in return for lenient terms for affected clients.
The publicity surrounding the latest theft of data may prompt some Swiss account holders to divert money into Liechtenstein to take advantage of the relatively light penalties on offer. Switzerland’s reputation for shielding its clients was dented last year when it bowed to international pressure to end its long-standing tradition of bank secrecy, but many account holders still expected to stay below the radar.
“These are by far not the first incidences that led to intense discussions within affected countries and across country borders, sometimes even worsening bi-lateral relations. Looking at all the other cases that became public knowledge over the last couple of years, it appears to be an absolute must that companies of all sizes and in all economical sectors take a closer look at their data security measurements,” comments Michael Struss, Sales Director at InfoWatch Central Europe, a company specializing on the protection of confidential data. “Independent of the question if governments who purchase this type of ‘available’ data are conforming to the laws or not, it will lead to an increase in data leakage activities and will not restrict itself to large corporations or banks.”
