“Eine Mischung aus Kirchenhymne und Wetterbericht”

“A mixture of church hymn and weather report.”

Switzerland’s current national anthem, as described by someone from the Verein tasked with judging the ~200 new Swiss national anthems local composers have submitted in response to a Call For Anthems.

(Eye na  MISH oong   ow s   KIRCHH en HIM na   oont   VET ta bear ICHH t.)

Weißgeldstrategie

“White money strategy.”

Under-the-table money is called Schwarzgeld, black money. Before Switzerland got rid of banking secrecy this year by joining the O.E.C.D.’s common standard for automatically sharing account holders’ banking data with the tax authorities in the account holders’ home countries, Switzerland first adopted a so-called “white money strategy” for several months. The Süddeutsche Zeitung said the policy involved trying to only attract and manage legal money. In some cases, under this policy, Swiss banks pressured their clients to make things right with the tax authorities at home, or lose their Swiss bank account.

How Switzerland’s new rules will look remains unclear, said the Süddeutsche. It’s possible that it may be easy to get around them by using letterbox firms or “shell” companies. “The only thing that will help against that is transparent company registers.”

(VICE geld shtraw tegue eee.)

Gotthardbasistunnel

The Gotthard basis tunnel, being built under the famous Gotthard Pass through the Swiss Alps. They’re saying this new double tunnel for trains is the longest in the world, at 57 km. Wonderful ZDF heute journal report on the testing currently underway, showing how Swiss engineers are verifying human/computer interaction to control responses to a variety of simulated emergency situations. It’s not yet known whether the air each train pushes in front of it and pulls behind it will be enough ventilation for all 57 kilometers.

Passenger trains are to travel through the new tunnel at up to 250 km/h. Accelerating inside the tunnel would cost a lot of energy because of the column of air; the F.A.Z. said the trains will “thunder into” the tunnel entrances.

(GOTT haht BOZZ iss TOON ell.)

“Krysha”-Zahlungen

“‘Paving the way’ payments” in Russia. Rapprochement geld, smoothing-the-path-between-us money, also translated as “bribes” according to a Süddeutsche.de article about Germany’s third-largest power company, Energie Baden-Württemberg, saying some German prosecutors have thought for some years now the nuclear power provider used unworkable, improbable “fake contracts” [Scheinverträge] to move money into “shadow accounts” [schwarze Kassen] in Switzerland to form a pool of bribe money doled out to powerful Russian decision-makers, such as politicians or high-ranking military officers, for more access to the Russian nuclear energy and natural gas sectors. At the time, about half of EnBW was government-owned: by an association of county governments from the German state of Baden-Württemberg and by the French “energy giant” EdF, which itself was also “government-dominated.”

EnBW is said to have been aided in these endeavors by Moscow lobbyist Andrej Bykow, transferring ~280 million euros to Mr. Bykow’s Swiss companies over the course of several years.

Süddeutsche.de’s anthropological explanation of krysha said auditors from the accounting firm KPMG found that “questionable contracts with Mr. Bykow and his companies were being used to pay ‘initiation costs'” and that the auditing company’s confidential research had found that depending on the sector such expenses could run to 2% to 5% of the total cost of a project in Russia. That would make Russia one of the least corrupt countries in the world according to the experience of Siemens executives prosecuted for paying international bribes at about the same time: Siemens accountant Reinhard Siekaczek testified for example that, when he managed transfers of approx. $65 million dollars in illegal bribe money through offshore accounts from 2002 to 2006, his unit found that in the most corrupt countries bribes could be ~40% of a project’s budget, while 5% to 6% was about normal. A retired Greek official who was Greece’s defense department’s procurement director from 1992 to 2002 and recently spoke to Athens prosecutors about ~14 million euros found in his secret accounts around the world said from Russian arms deals his kickback was a “very generous” 3%, because 0.5% to 1% was his usual fee.

Germany has some rules against companies’ paying bribes in other countries, even where corruption is supposedly endemic, as can be seen from the billion-euro fines imposed on Siemens for bribery in 2008. Reporting on possible investigations into the corruption is confused by the use of tax investigations to obtain convictions or evidence in non-tax crimes and EnBW is apparently under investigation for a completely different type of tax fraud (the “carousel” sales tax scheme for avoiding value-added tax and/or collecting refunds of advance V.A.T. payments that were never made) now suspected to have become widespread in European electricity trading. Shortly after the utility’s “opaque business deals” with Mr. Bykow became known in 2011, several tax offices told S.Z., they quickly began looking for improprieties.

The passage of years since the start of these investigations, which state, federal and European offices of which types of investigators, and what pieces of this apparently large and sprawling puzzle they were examining, remains unclear to me.

Mannheim prosecutors are said to have been investigating six former EnBW managers and one current EnBW manager since 2012 for tax evasion and “breach of trust” [Untreue] though not for corruption. That could change now that the Karlsruhe tax office has started looking into the questionably documented filling and emptying of the company’s clandestine accounts in Switzerland.

Tax-wise, the power company has already offered to file adjusted German returns for the years 2000 to 2007 and has already transferred an additional 60 million euros to German tax authorities (about what the company saved in taxes by incorrectly labeling some payments to Mr. Bykow as “business expenses,” Mannheim prosecutors said). But new threads to pull keep getting teased out of EnBW’s data.

Süddeutsche.de described a strange nonprofit charity Mr. Bykow founded called “St. Nikolaus the Miracleworker”—whose board members included EnBW managers at times—which made donations to Russian churches, young Russian musicians and Russia’s Air Force, Navy, Border Patrol and “landing troops” [Landungstruppen; amphibious assault?].

“Thus, the Russian Pacific fleet’s submarine squadron Wilutschinsk Kamtschatskij Kraj named a boat after the Nikolaus charity. The charity, in its turn, gave the submarine personnel a minibus and donated a car to their commander, a vice-admiral. For the ‘maintenance of the fighter bomber SU 34, “Holy Nikolaus the Miracleworker,”‘ the foundation donated the construction of a heated airplane hanger. And every year the regiment’s top member received an automobile.”

Though it’s unclear how these arrangements were reached, with Mr. Bykow’s help EnBW ended up receiving military uranium taken e.g. from decommissioned Russian submarines. The utility was said to have used similar methods to increase its access to Siberian gas fields.

(Krysha   TSOLL oong en.)

P.K.W.-Maut

Car toll.

The C.D.U.’s Bavarian state sister party made a strange campaign promise for the Sept. 2013 election that they would levy a toll on foreign drivers entering Bavaria. It seemed this would be illegal in the E.U., in addition to unethical. The C.S.U. said the country of Austria was doing it, so why couldn’t the state of Bavaria? During the sole televised debate between the two biggest parties’ candidates—in Germany’s deliberately foreshortened campaign, kept brief by electoral laws—Angela Merkel quietly said “no” to the foreigner toll. Horst Seehofer (C.S.U.) swore his party wouldn’t sign a new federal coalition agreement with the C.D.U. without it.

The C.S.U. was re-elected in Bavaria and might be able to rule alone there with no coalition partner (they’ve been in charge in Bavaria since 1946).

In a surprise move, after the German elections a decision was announced from the E.U. transport commissioner Siim Kallas (libertarianesque Estonian Reform Party) indicating Brussels might allow such a state tax on foreigners! In the E.U.! Though they backtracked afterward, it still appeared the P.K.W.-Maut might be allowable were Bavaria to make all drivers entering the state pay a toll and then selectively refund it via the annual tax paid by car owners. That method would miss refunds to numerous deserving Bavarians—electric cars and other environmentally friendly cars already get car tax refunds for example—and the C.S.U. was scratching their heads about how to announce that those car owners wouldn’t be taxed like a foreigner. German consumer protection advocates and apparently a study by the country’s equivalent of A.A.A. (A.D.A.C., the General German Automobilclub) said the proposed toll’s stated intended benefit for infrastructure construction was disingenuous because it would create more administration costs than revenue; if this is true it makes the toll appear more racist. The toll would also irritate non-Bavarian Germans, many of whom were already looking askance at the Bavarian conservative politicians’ attempt to stoke up Ausländerfeindlichkeit, hatred of foreigners, and surf it to power.

Thomas Oppermann (S.P.D.) pointed out that, in the grosse Koalition negotiations to form the new government, the C.D.U. had firmly refused the S.P.D.’s campaign promise to inflict new taxes on the rich yet it would allow this new tax on people who aren’t wealthy.

Investigating the issue in more detail, on 07 Nov 2013 ZDF heute journal interviewed a traffic-expert pundit professor who estimated Germany needed ~7 billion euros more per year to fix its road infrastructure, i.e. more than doubling their current expenditures. He particularly used the example of bridges.

Reporting on 07 Nov 2013 seemed to indicate the debate had expanded to include introducing car tolls on all German autobahns, perhaps merely responsible political debating about any potential reforms or perhaps what it might take to weasel in the Bavarian foreigner disincentive under current rules. The numbers are still unclear, with the C.S.U.-led federal transportation ministry estimating much higher revenues from new car tolls than others estimated. ZDF listed approximate annual numbers from countries who’ve already introduced an autobahn car toll:

Austria. Car toll: 390 million euros, truck toll: 1,100 million euros; 800 million euros spent on annual road construction and maintenance. About half the car toll revenues come from foreign drivers. The Austrian car toll is about 80 euros/year, for residents and foreigners alike.

Switzerland. Car toll: 300 million euros, truck toll: 1,250 million euros; 1,250 million euros spent on annual road construction and maintenance. About 1/3 of the car toll revenues come from foreign drivers. The Swiss car toll is about 33 euros/year for residents and foreigners alike.

Germany. Truck toll: 4,600 million euros; ~5,000 million euros spent on annual road construction and maintenance. Estimates for revenues from an autobahn car toll vary between 350 and 700 million annually (the low number is from the A.D.A.C. drivers’ association and the high number is from the C.S.U.-led transportation ministry).

Austria and Switzerland said they spent 7% to 12% of the autobahn car toll revenues on its administrative costs. In Germany administrative costs could be much higher because of the C.S.U.’s plan to return the money to Bavarian drivers by offsetting it from their car tax. The toll might thus merely bring a bad reputation, highly-public permission for anti-foreigner sentiment and at most a few hundred million euros to fix a budget gap of billions.

Update on 11 Nov 2013: The two parties agreed to temporarily stop discussing a new car toll in their grosse Koalition negotiations.

Update on 27 Nov 2013: Austria and Holland threatened to sue Germany before the European Court of Justice if Germany implements the C.S.U.’s car toll on foreign drivers. The negotiated grosse Koalition agreement presented on Wed. 27 Nov 2013 said yes to the toll if it violated no E.U. rules and negatively impacted no German drivers.

Update on 01 Dec 2013: Protesters walked carrying signs on the Bavarian and Austrian sides of the Inntal A12 autobahn, demonstrating against car tolls. Austria had announced it would create a new checkpoint there to verify that drivers had paid its car toll, probably in reaction to Bavarian politicians’ insistence on an anti-foreigner car toll. People living on both sides of the border fear cars will start filling up local roads trying to avoid the highway tolls. Strolling on the autobahn with friends and neighbors looked rather pleasant, and the Bavarian and Austrian mountains there are so beautiful.

(Pair ZOH! nen croft vog EN   m OW! t.)

Beibehaltung

Retention.

April 2013: After it became known the chair of the supervisory board [Aufsichtsrat] of Germany’s richest and most successful soccer team, Bayern Munich, was under investigation for voluntarily reporting himself [Selbstanzeige] as having an insufficiently reported and taxed ~500 million euros in a Swiss bank account, there seem to remain some loose ends in his origin story for where the half billion came from*. Yet on 06 May 2013 Bayern Munich’s supervisory board voted not to accept Uli Hoeneß’s resignation as its head. Members of the supervisory board who supported Mr. Hoeneß at this meeting included: Herbert Hainer, C.E.O. of Adidas. Rupert Stadler, C.E.O. of Audi. Timotheus Höttges, chief of Finances and Controlling at top Bayern sponsor Deutsche Telekom. Martin Winterkorn, C.E.O. of Volkswagen. Edmund Stoiber (C.S.U.), former candidate for German chancellor in the C.D.U./C.S.U. party.

10 May 2013: Mr. Hoeneß is suing the responsible prosecutor’s office for being the source of the press’s discovery of the investigation into the mysterious half billion euros, in April 2013.

30 Jul 2013: Uli Hoeneß has been charged with alleged tax evasion. The Economic Crimes Chamber [Wirtschaftsstrafkammer] of the second Munich Landgericht [Münchener Landgericht II] must now decide whether it will allow the trial to proceed and whether to open the main trial. The decision is expected in late September 2013.

04 Aug 2013: The president of the German Soccer Association [Deutscher Fussballbund e.V., D.F.B.], Wolfgang Niersbach, declared his support for Uli Hoeneß.

07 Aug 2013: Stern.de report that an anonymous informant told the second state prosecutors office in Munich [Münchener Staatsanwaltschaft II] that Mr. Hoeneß’s untaxed millions are not limited to one account at the Swiss Vontobel bank (said by prosecutors to have contained 500 million Swiss francs but said by Mr. Hoeneß in April 2013 never to have exceeded around 15 to 20 million euros, tops). Stern.de reported the informant said Mr. Hoeneß’s Vontobel account had balances consistently [“durchgehend“] exceeding 500 million Swiss francs in years before 2008 and also supplied information about stock dealings and transactions involving numbered accounts at three other Swiss banks: Crédit Suisse, Julius Bär and the Zürcher Kantonalbank.

The whistleblower said Deutsche Telekom stock with which Mr. Hoeneß participated in so-called dividend stripping was also involved.

04 Nov 2013: Mr. Hoeneß will have to “answer before a court” after all, starting ~10 Mar 2014. Landgericht Munich II’s “Economic Chamber” [Wirtschaftskammer] announced it will allow trial of charges against him of tax evasion and providing inaccurate answers. His Selbstanzeige earlier this year “contained errors.”

Frank Bräutigam, ARD tagesschau.de’s excellent legal correspondent, said the trial will evaluate the correctness of the Selbstanzeige (timeliness, completeness and accuracy). If the court determines that the Selbstanzeige was not properly executed, next it must decide how much money was improperly handled and what penalties could be imposed.

The Bayern Munich football club’s supervisory board reconfirmed that they want to retain Mr. Hoeneß as president of the club.

14 Mar 2014: Uli Hoeneß’s trial for 3.5 million euros of tax evasion was this week. In the two weeks before the trial started on Monday, he apparently gave prosecutors 50,000, some said 70,000, pages of Vontobel bank account statements previously withheld. On Monday he surprised reporters by announcing he’d actually not paid 18 million euros tax, but this was the ultimate number, no more revelations. On Tuesday, an auditor testified that the amount was actually 27 million. He was found guilty of 28.5 million euros in tax evasion and sentenced to 3.5 years, which will probably be in an open prison. On Friday, he said he would not appeal. The prosecutors may still decide to appeal. Uli Hoeneß resigned as president of the FC Bayern Munich soccer club and chair of FC Bayern Munich Inc.’s supervisory board.

Mr. Hoeneß’s salary tended to be about 10 million euros per year. The Vontobel account never had more than 150 million euros in it at one time.

(BY beh HALT oong.)

* Mr. Hoeneß said he netted 500 million euros between 2000 and 2012 by compulsively playing the stock market starting with a 10-million-euro combination gift/loan in 2000 from a now-deceased friend, a former C.E.O. of Adidas.

Amtshilfe

Administrative cooperation.

Switzerland said they will provide administrative cooperation to governments seeking evidence about tax cheats even if the governments are using “stolen” data. However, Switzerland said, it does not want to cooperate with governments that “actively” acquired stolen data (such as the German state of Rhineland-Palatinate, der Spiegel suggested) but will now cooperate with governments with which those “actively” acquired data have been shared.

(OMTS hill fah.)

Ölpreis

In 2011 a Goldman Sachs study apparently stated that market speculation had indeed helped drive up the price of oil for consumers. In 2012 U.S. Commodity Futures Trading Commissioner Bart Chilton said, “Using the Goldman Sachs research figure, and multiplying 10 cents times 233.9 million, would mean that theoretically there’s a ‘speculative premium’ of as much as $23.39 a barrel in the price of NYMEX crude oil.” Mr. Chilton has also said that the commodities business is a possible loophole for banks in the U.S.’s new frequently-postponed “Volcker rule” intended to reseparate banking from investment gambling.

Potential oil bottleneck points persist in privately held and/or operated oil infrastructure. Oil traders now own oil refineries. Pipelines are included in the infrastructure large banks have somehow acquired part ownership of. U.S. bank Morgan Stanley invested in the “global oil tanker operator” Heidmar in addition to “fuel chain supply manager” TransMontaigne. An F.A.Z. article described how the world’s three largest oil trading firms, Switzerland-based Gunvor, Vitol and Glencore—”prescient” commodity markets pioneer Marc Rich’s old firm—work today, supposedly on the basis of fast-computer-based price arbitrage rather than speculation. Moving into production, Glencore is now invested in oil wells, coal mines and metals mines, after its late-2012 fusion with Swiss competitor Xstrata.

Apparently a landmark 2003 U.S. Federal Reserve decision allowed U.S. investment banks to start “trading oil cargoes.” In July 2013 the Fed announced it was “reviewing” that decision. Though Fed deregulation may have unleashed the Wall Street side of recent international commodities speculation problems, the Fed probably cannot fix it now without simultaneous coordinated reforms from other regulators around the world.

(ILL prize.)

Fantastillionen

“Lots of money,” an “unimaginable fortune,” but no one knows how much yet. The Münchener Abendzeitung reported reports, firmly denied, of account balances totalling several hundred million euros. Uli Hoeneß, the president of German soccer’s version of the NY Yankees, FC Bayern Munich, submitted a Selbstanzeige in January 2013 for unpaid taxes on funds in one or more Swiss bank accounts and has already paid an initial lump sum of about six million in unpaid taxes. He said he didn’t report himself before January 2013 because he was betting the tax agreement with Switzerland would be ratified that provided amnesty, anonymity and a low tax rate for “tax sinners.” Tagesschau.de reports that it’s still unclear where the untaxed monies came from, whether from his bratwurst factory or from other sources.

ZDF heute journal found footage of Hoeneß on talk shows such as the charming Günther Jauch’s in autumn 2012 recommending low taxes for rich Germans because otherwise, he said, they would move to Austria, Switzerland or “who knows where.”

CSU chair Horst Seehofer confirmed on Saturday, 20 Apr 2013, at a CSU meeting in a Munich Hofbräuhaus cellar, that the district attorney was looking into the matter. The CSU had been going to propose Hoeneß as a political candidate, and he probably would have been confirmed.

The Münchener Abendzeitung commented on 20 Apr 2013:

“The question remains whether Hoeneß can now hope for the same support from the Bavarian state government as Franz Beckenbauer, to whom Bavarian finance minister Ludwig Huber once gave tips about tax flight into Switzerland while Huber was still in office?”

Achtung: Focus Magazin’s publisher is on the board of FC Bayern Munich.

(FAHN tossed ill ee own en.)

Selbstanzeige

“Self reporting,” voluntary submission of an amended German tax return reporting money hidden in e.g. Switzerland. You can still report yourself to the German IRS, pay a low tax rate on the unreported funds, get immunity from prosecution and legally repatriate the money to Germany. The reason we know there are still Germans with Schwarzgeld, under-the-table or “black” capital, in Swiss bank accounts who have not taken advantage of the Selbstanzeige is because the German state governments, acting independently, buy CD’s of data about these accounts and use them to pursue tax sinners for fun and profits. The state of Rhineland-Palatinate recently bought another one, for the 500 million euros they expect to collect with its help and because no capital crimes were committed in the seller’s acquisition of it. ~200 apparently-related tax razzias took place on 16 Apr 2013. The RP finance minister is asking the other German states to show solidarity by contributing toward the purchase price because they too will be benefiting from the content. Lower Saxony has already announced they will contribute. Both states are ruled by SPD and Green Party coalitions.

The Selbstanzeige will soon be irrelevant because international negotiations are moving toward closing the loopholes, especially since publication of the “offshore leaks” financial data trove. Meanwhile, the Süddeutsche Zeitung writes in a wonderful history of bank account data sales to Germany, RP tax officials are “electrified” and say they’ve never had foreign bank account data this good before. “First class.” It sounds like enough years of transfers and other information are included that, after the tax authorities are done with it, the CD could form the basis of some interesting doctoral theses.

The top Rhineland-Palatinate tax agent now says he sees the recently failed tax agreement with Switzerland as disadvantageous, because it provides a partial amnesty and would destroy tax payment morale were it to be ratified now.

(ZELBST on ts eye geh.)

 

Bankgeheimnis

“Banking secrecy.” Luxemburg announced on 07 Apr 2013 that they intend to relax their banking code of silence, “no longer strictly refusing” to automatically share information about international accounts with other countries’ tax authorities, starting in 2015. EU countries have also been in negotiations with Switzerland about similar issues for several years, though individually as separate countries and not with the full power of the EU.

Until now, foreigners banking in Luxemburg have paid an anonymous tax of 35% on interest earned there. This will be changed in Luxemburg e.g so that account holders’ names will be included in the information shared with German tax authorities.

German critics say this is insufficient because other Luxemburg income, such as company profits, remains untaxed for foreigners. Also, Luxemburg isn’t the only European tax oasis. Jürgen Trittin of the Green Party criticized Austria, for example, where names of foreign account holders earning interest in Austrian banks are only shared after initiation of criminal proceedings. Green Party finance guy Gerhard Schick wrote that the G20 summit in 2009 actually agreed to end Bankgeheimnis; certainly some reforms were enacted that year though movement has been slow since, until the recent data leak. The ZDF report concluded by saying that economists have warned that if only some tax oases reform their laws, the ones that don’t will profit from acquiring fleeing customers.

Update on 09 Apr 2013: “In principle, Liechtenstein has separated itself from its tax haven past.” Speaking of Liechtenstein, it looks like they had an interesting idea for a new field for financial services experts in former tax oases to move into: ratings agencies that are independent of the big three on Wall Street. The nonprofit Carlo Foundation (carlofoundation.org), said to be the world’s first independent fund rating agency, was founded in Liechtenstein in July 2012.

Update on 22 May 2013: At their summit in Brussels all 27 EU leaders confirmed in principle their finance ministers’ decision to eliminate Bankgeheimnis for “foreign”-held bank accounts, insurance policies and investments starting in 2015. The leaders of the two last holdouts, Luxemburg and Austria, said they too would agree to the automatic exchange of data after the EU as a whole negotiated banking agreements with relevant third-party countries such as Switzerland, Liechtenstein or Monaco. Luxemburg’s prime minister Jean-Claude Juncker said his country is particularly concerned that the same competition conditions apply in finance centers inside and outside the EU. Negotiations with Liechtenstein, Monaco, Andorra, Switzerland and San Marino about automatic exchange of banking data are underway and expected to be concluded quickly, in “two to three months.” If all goes according to schedule, EU leaders could completely eliminate Bankgeheimnis at their meeting in December 2013.

Update on 20 Mar 2014: The 28 E.U. heads of government agreed to end Bankgeheimnis in the European Union, with comprehensive exchanges of tax data. This will also end banking secrecy for foreigners, though that might mean only for foreigners from other E.U. member states. Five third-party countries, Switzerland, Liechtenstein, San Marino, Monaco and Andorra, also agreed to exchange sufficient information to end banking secrecy de facto with regard to interest income, said Luxemburg’s prime minister, saying this fulfilled Luxemburg’s conditions for also agreeing to the new policy.

The O.E.C.D.’s standard for automatic data exchange will be the orientation point, and the E.U. hopes it will become the standard for tax information exchange regulations worldwide, said E.U. Council President Herman Van Rompuy. But today’s breakthrough E.U. policy agreement goes beyond the requirements of the O.E.C.D. standard:

“In future, the data exchange is supposed to apply not only to private persons but also to certain trusts and foundations. The guideline will also apply for stock profits and certain insurance profits, particularly from life insurance and investment funds. The banks are also to be obligated to collect more information in future about the actual economic owners of companies.”

(BONK geh HIGH mniss.)

Abzockerei

“Ripoffery,” word used in an exciting Swiss voters’ referendum to limit bonuses, and not just in banks! In Switzerland. The election is Sunday, 3 Mar 2013. Proponents of the referendum want performance-based salaries and for executives’ compensation to have to be approved by shareholders, the actual owners of the companies concerned. Pro-referendum posters say things like “Compensation excesses harm pension funds + Swiss old-age and survivors insurance + the people’s economy.”

(Ob TSOCK err eye.)

Steuerabkommen

“Tax agreement.” Germany’s ruling CDU/CSU + FDP coalition negotiated an agreement with Switzerland that untaxed German money in Swiss bank accounts could be subjected to a one-time tax (21% to 41%) and repatriated to Germany with no prosecution for tax evasion. This agreement had to be ratified by German parliament but was not because the SPD and Green Party objected to the low rates, saying tax avoiders would be granted immunity yet pay a lower overall tax rate than people who had obeyed the laws. The matter will now undergo arbitration.

Update on 06 Dec 2012: A tax agreement between Greece and Switzerland is under discussion that it is hoped would return 9 billion euros to Greece. Again, the tax evaders would pay between 21% and 41% and remain anonymous. Negotiations have been ongoing for two years. Süddeutsche Zeitung reported that over 20 billion euros were moved from Greece to Swiss banks between 2009 and 2011.

Gerhard Schick, finance speaker for the Green Party in the Bundestag, said in a position paper quoted in this Süddeutsche Zeitung article about the constitutionally anchored tax-free status of Greek shipping families that the EU should be negotiating these tax agreements with Switzerland, that the Swiss tendency to negotiate separately with each EU country gives Switzerland disproportionately too much power. “Divide et impera.”

Update on 12 Dec 2012: Arbitration was unsuccessful.

(SHTOY err OBB come en.)

Dividendenstripping

Dividend stripping.” A tax avoidance scheme the HypoVereinsBank is accused of, wherein they allegedly transferred customers’ stocks back and forth between German and foreign banks until it was unclear whether the Kapitalertragssteuer had been paid and then claimed more capital gains tax credits than were owed. Reuters and the Süddeutsche Zeitung reported that a single Frankfurt investor working with HVB and other banks was told he owed 124 million euros in tax for 2006–08 after the IRS-equivalent refused to accept his capital gains tax break from the scheme; he has been fighting in court since 2011 to get HVB to pay the tax bill. HVB and this investor split the profits 65% HVB, 35% investor. Wikipedia says dividend stripping lost its tax-law basis in 2000, Spiegel says it hasn’t been accepted by German tax authorities since 2007, and Süddeutsche Zeitung says since 2012.

Weird story about the HypoVereinsBank in Spiegel-Online on 30 Nov 2012: A guy accused his ex-wife and other HVB employees of large-scale tax avoidance schemes that moved money to Switzerland, was declared non compos mentis by the Bavarian justice system and has been locked up in a mental institution ever since (2006). The man probably was violent, but he may have been correct about the tax avoidance. He cited names and numbers when he blew the whistle to the Bavarian tax authority, but a judge who was not involved in that case called the tax office and told them not to investigate the bank because the whistleblower was crazy. The institutionalized whistleblower’s case was re-opened in 2013. He was set free  in the summer of 2013, after seven years of confinement. Laws committing people to mental institutions and keeping them there are going to be reformed as a result of his case. This started with an 05 Sep 2013 decision by the supreme court in Karlsruhe, the Bundesverfassungsgericht, which prioritized a review of the whistleblower’s case and announced failures of the various state courts and criteria that need to be met in future.

The Frankfurt district attorney’s HVB razzia last week found a trail leading to “a Swiss private bank.” Süddeutsche Zeitung says it is thought that Swiss banks will be a very fruitful place to investigate this German tax scandal. Deutsche Bank and UBS are now implicated as well.

Update on 16 Dec 2013: HSH Nordbank has been accused of dividend stripping.

(Dee veed END en shtrrrip pink.)

Unterstützungsanzahlung

“Support  payment,” “support installment payment.” At least two “high animals” at FIFA received bribe payments totalling 11 million euros, part of a bribe of 100 million euros given to FIFA by a media company in the 1990’s. Sepp Blatter knew about it. At the time, this was not illegal in Switzerland, but it is illegal now. The two known officials (a guy and his son-in-law) were prosecuted and found technically innocent. FIFA then made a seven-figure “support payment” “to keep the files in the prosecution’s filing cabinet,” which is why we’re only finding out about this now, thanks to journalist Jean François Tanda’s successful lawsuit to obtain access to the court files.

(Oon ter sh TOOTS oongs on tsoll oong.)

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