Swiss spy ‘ran mole’ in German tax office: report

A Swiss spy allegedly monitoring German finance officials who hunt cross-border tax cheats also ran a mole in a state finance ministry office, media reports said on Thursday.

Swiss spy 'ran mole' in German tax office: report
File photo: DPA.

If confirmed, “the scandal has reached a new dimension”, charged Norbert Walter-Borjans, finance minister of the affected state of North Rhine-Westphalia, Germany's most populous.

“It's hard to believe that a spy thriller like this happened not in the movies but on our doorstep,” he fumed in comments to the Kölner Stadt-Anzeiger daily.

German prosecutors said last Friday that police had arrested a Swiss man identified only as Daniel M., 54, in a Frankfurt hotel room, accused of carrying out espionage activities since 2012.

Die Welt daily reported the man's alleged mission was to identify German tax investigators involved in the purchase of “tax cheat” data CDs, which have upset German-Swiss relations in the past.

Berlin on Tuesday asked the Swiss ambassador, Christine Schraner Burgener, to clarify the case.

Bild newspaper reported the same day that the alleged spy was a former police officer and a double agent, who at one stage had spied for Germany on Switzerland.

Now a joint report by the Süddeutsche Zeitung daily and public broadcasters NDR and WDR said the Swiss spy had run a paid informant inside the NRW finance ministry.

The mission was to find out how, and which, German finance officials had got their hands on the CDs with lists of bank account holders in foreign tax havens.

The information provided reportedly helped Swiss authorities file charges of breaching Swiss banking laws and economic espionage against three German tax investigators.

Several German states have over recent years paid millions to unknown sources for the CDs, which have listed German citizens' account information with several Swiss and Liechtenstein banks.

Many of Germany's rich, powerful and famous have as a result had to issue public apologies for stashing away their wealth abroad and paid back-taxes and fines.

The threat of dawn raids compelled thousands more German tax cheats to come forward and report their accounts abroad, and pay back taxes on the interest earned plus fines.

North Rhine-Westphalia alone has bought 11 CDs, which it says have led 120,000 German citizens to self-report Swiss bank accounts.

They have paid back billions of euros in taxes they owed, finance authorities have said.

In May 2015, the EU and Switzerland signed an agreement on the exchange of bank data from 2018, which will effectively end the Swiss tradition of bank secrecy for members of the bloc.

For members


Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site 

Holders of other, temporary or conditional permits are not accepted.

READ MORE: ‘A feeling of belonging’: What it’s like to become Swiss

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.