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The German & Liechtenstein Tax Scandal

Introduction - There has been a lot of press on the tax havens and the OECD with talk of black lists etc. This is all nonsense and noise in the G20 police state controlled media. We will take a harder look at this to show you it is just a distraction to try to throw blame on the tax havens for the stupid financial practices of the G20 and their fiat money. The tax havens are responsible for maybe 1% of their problems at most, probably much less than that.

---FROM THE ARTICLE "MASSIVE TAX EVASION SCANDAL IN GERMANY", PUBLISHED IN THE INTERNATIONAL VERSION OF THE GERMAN NEWSPAPER "SPIEGEL", 16 FEBRUARY 2008.

The Liechtenstein Connection

With one bigwig already toppled for tax evasion and hundreds more likely waiting their turn, all roads lead to the tiny principality of Liechtenstein. According to SPIEGEL sources, Germany's largest post-war economic scandal started with a single intelligence source.

It is rapidly becoming one of the largest economic scandals ever in Germany's post-World War II history. As many as 900 wealthy Germans -- many of them well-known -- might be involved. Berlin may have been shorted up to 4 billion euros in taxes. And the accusatory finger is pointing increasingly at what many feel is rampant greed among of many of Germany's top earners -- and at a handful of banks and foundations in the tiny principality of Liechtenstein that help the affluent hide their assets.

German investigators have their hands on LGT Bank data that may implicate hundreds of wealthy Germans of being involved in tax evasion.

The first to fall was Deutsche Post CEO Klaus Zumwinkel. He resigned on Friday after raids on his home and office by officials looking for evidence of massive tax invasion. But with officials planning to launch up to 125 additional tax evasion investigations next week, it is likely that Zumwinkel will soon have to share headline space.
The growing investigation has its roots in information handed to tax investigators by Germany's foreign intelligence agency, the Bundesnachrichtendienst (BND). Last week, the BND insisted it had been little more than a messenger, but according to SPIEGEL sources, its involvement is more reminiscent of a Tom Clancy novel than of a run-of-the-mill operation.

In 2006, a man approached the BND offering agents a DVD full of information detailing foreign investments and following capital flows from Germany into those investments. In addition, the source claimed to have particulars pertaining to a number of accounts held by the LGT Group, a bank managed by the principality of Liechtenstein. But he was charging a hefty price for the DVD.

BND agents moved slowly. Their source, whose identity has not been made public, offered up samples from his data for German officials to test. And they were satisfied with the information's trustworthiness. In the end, the source was wired 5 million euros for the data disk, and he also requested personal protection out of fear for his life. The payment was made with the knowledge of German Finance Minister Peer Steinbrück.

While hundreds of its customers may be compromised by the information now in the hands of eager German investigators, the bank is doing its best to assure its clients that the DVD contained details stolen from LGT Trust Ltd, a part of the LTD Group located in Vaduz, Liechtenstein six years ago. That case was closed in 2003 after the perpetrator was convicted. The data, the bank says, was "illegally passed on." The bank claims that "there is no indication that customer information has been stolen since 2002."

But according to SPIEGEL sources, German investigators are in possession of bank data on Liechtenstein-based tax evasion that goes all the way through the end of 2005. They also have account information from the Liechtensteinische Landesbank (LLB) which may reveal tax evasion. The LLB announced at the beginning of the week that it too had been the victim of a major data theft. According to SPIEGEL sources, that data too is still in circulation.
On Monday, the SPD plans to pass a resolution looking at whether prison sentences for tax evasion should be lengthened. The party accuses elites in Germany of ignoring the responsibility they have for the common good. "The money that perpetrators keep from the community short-changes education, security and infrastructure," the draft document reads.

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First of all we would like to point out a few things.

Many newspapers and politicians point out tax havens like Liechtenstein as a paradise for money laundering, narcotics & terrorism money. Nothing could be further from the truth. Yes it's true that in the old days "the mob" laundered money in Switzerland, and that "King Pins" from Colombian drug cartels hid money in Panama etc. But things have changed. The world has its eyes on the tax havens. The tax havens have the strongest money laundering regulations in the world. If you want to launder money you don't do it where there are lot of eyes, you do it where they least expect it, you do it where there are a lot of capital and transactions back and fourth. You do it in USA, UK, Germany etc.

Germany wants Liechtenstein to co-operate against tax evasion. But Liechtenstein, like many other tax havens, doesn't consider tax evasion to be a crime. Well, we think they're right. Instead we think what EU any many other countries do, when they charge 50% or more of the BNP in tax, is stealing. Most of the money isn't even spent on well-care, it's spent on representation for the politicians and bureaucracy. Instead of thinking if there's something wrong with their tax politics and what they can do about it, they attack the tax and privacy laws of small nations like Liechtenstein. Actually it's not just about tax. It's about people's rights to privacy, security and safety. Do you know why the Swiss implemented their strict bank secrecy laws in 1934? So that Jews and other refugees had a safe place to put their savings. Now several decades later they have revealed that some of the Swiss bankers after the War stole money that hadn't been claimed (they stole money from people who had died in the concentration camps). But the bank secrecy act from 1934 was a good thought. Just because countries in the EU, tax their citizens with 50% or more don't give them rights to go into other independent nations' bank records and violate their privacy laws. What if the Nazis would have had that opportunity? We know that it's a tough comparison. It's just important to point out that, just because a government has been democratic elected, doesn't make everything they do right. The most clear example is today's Russia. But more about that another time.

What will happend to Liechtenstein as tax/privacy haven?

This is one of the biggest image losses ever in the offshore/tax industry. We think that Liechtenstein will continue to enforce strict bank & corporate secrecy laws for years to come, but much of the capital will disappear to other offshore countries, especially Panama which can offer similar foundation structures as Liechtenstein.

How will this scandal effect other tax/privacy havens?

Offshore countries like Panama, Hong Kong etc. will probably see a positive effect. More capital will be moved far away from Europe's borders. European politicians are talking about embargos against tax haven countries if they don't abolish or change their privacy and tax laws. We find it hard to beleive that they will follow through with those ideas, how will they impose embargos against the two largest free trade-zones in the world, against countries where some of the biggest companies' head quarters are located, against countries which are the homes to some of the wealthiest and most powerful people in the world? It's also important to remember that many of the most powerful governments (ex. US government) in the world are dependent on these tax havens and their privacy/bank secrecy laws to carry out and finance secret operations (ex. US financed several operations in South America during the 1980's through secret Panama bank accounts).

Conclusion

Tax havens are here to stay. But there will certainly be changes in some of them. Our advise is to move capital to independent, stable nations with strong corporate & bank secrecy laws far away from the European Union and US. We especially recommend Panama.

http://www.lpoffshore.com/eng/liech.html

About the Author

LPOffshore.com - LP Corporate Services specializes in offshore companies, offshore bank accounts, offshore trusts, offshore foundations etc.

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