Swiss court delivers blow to US tax deal

by FRANK JORDANS - Apr. 11, 2012 06:25 AM
Associated Press

GENEVA - -- Talks to resolve a long-running spat between Switzerland and the United States over how to pursue suspected tax evaders suffered a blow Wednesday, when a Swiss court blocked the handover of one unnamed bank client's data to U.S. authorities.

The Federal Administrative Court said a 1996 treaty between Switzerland and the United States doesn't allow the U.S. Internal Revenue Service to request the account details of potential tax cheats without clear evidence of fraudulent intent.

Drawing on Switzerland's distinction between evasion and fraud, the court said evidence of tax evasion, such as failure to declare a Swiss bank account, didn't provide sufficient grounds for the IRS to receive the data.

It also criticized the fact that the IRS didn't specifically name the suspected tax cheat in their information request.

The IRS had asked its Swiss counterpart in September to provide details on certain types of American clients who it said had received help from Credit Suisse in hiding income and assets in secret accounts.

"Administrative assistance shall not be granted for presumed tax evasion, even if high amounts are at stake," the court said. "The mere failure to declare a bank account may be qualified -- at the utmost -- as a tax evasion, which is not subject to administrative assistance," it added.

The ruling, which cannot be appealed, puts a strain on negotiations between Bern and Washington aimed at facilitating the exchange of information on suspected tax cheats.

The U.S has taken a hard line on Switzerland in recent years, resulting in several significant concessions to Swiss banking secrecy.

Two years ago, Switzerland's biggest bank UBS AG was forced to hand over the names of thousands of American account holders and pay a $780 million fine.

Last year it emerged that the U.S. was targeting about a dozen other Swiss banks, including Credit Suisse, on suspicion they too had helped Americans hide money abroad.

Switzerland has tried to shed its image as a tax haven, signing deals with several countries including Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens' accounts in the Alpine nation.

But the agreements have drawn fire from Switzerland's nationalist People's Party, which won more than a quarter of the vote in last year's general election, with some lawmakers saying they will try to block the treaties through referendums.

UBS Likely to Win Ouster of Billionaire’s Suit, Judge Says

UBS AG will likely win dismissal of billionaire Igor Olenicoff’s lawsuit blaming the bank for events that led him to plead guilty to failing to disclose about $200 million in offshore accounts on U.S. tax forms, a judge said.

U.S. District Judge Andrew Guilford in Santa Ana, California today issued a “tentative” opinion rejecting Olenicoff’s lawsuit against Zurich-based UBS, the largest Swiss bank. Olenicoff claimed UBS committed fraud by not telling him he owed U.S. taxes. He also said the bank traded excessively in his accounts and engaged in racketeering. He sought as much as $1.7 billion in damages.

Olen Properties Corp. President Igor Olenicoff speaks during an interview in his office in Newport Beach, California on March 6, 2009. Photographer: Tim Rue/Bloomberg

“Olenicoff cannot prove that UBS committed any wrongful act without running headlong into his own admission of criminal guilt,” Guilford wrote. “Olenicoff’s claim that he justifiably relied on UBS tax advice is entirely inconsistent with his plea agreement.”

Olenicoff, who built his fortune as the chief executive officer of Newport Beach, California-based Olen Properties Corp, pleaded guilty in 2007 to filing a false tax return. He admitted he hid offshore accounts from the Internal Revenue Service for seven years. He was sentenced to two years’ probation and ordered to pay $52 million in back taxes, fines and penalties.
Guilford said at a hearing today that he expected to issue a final ruling after considering further arguments from Olenicoff’s attorney, Thomas Newmeyer. After the hearing, Newmeyer declined to comment.

Bank Secrecy

If Guilford allows the lawsuit go to trial on May 8 as scheduled, the case may offer new insights about Swiss bank secrecy and the complex finances of Olenicoff.

Olenicoff claimed UBS funneled his money to risky accounts that were “churned” to his detriment. Guilford ruled that, because Olenicoff made a profit of $12 million, he has no damages.

“To succeed on his claims, Olenicoff must show proof of non-speculative damages,” according to the 28-page opinion. “He cannot. As risky as the bank’s investment scheme may have been, Olenicoff fails to show that it actually caused him any measurable harm.”

Guilford said he rejected both Olenicoff’s claims that he got bad tax advice, and that UBS churned his accounts.

“Because neither half succeeds, all of Olenicoff’s claims against UBS must fail,” he said.
UBS had urged the judge to dismiss the case.

‘Willfully Lied’

“UBS did not tell Olenicoff to lie on his tax returns about having an interest in foreign accounts,” the bank said in an April 2 court filing. “Olenicoff knowingly and willfully lied on his tax returns. Olenicoff’s felony conviction for subscribing to a false tax return is no one’s fault but his own.”

The evidence includes videotaped jailhouse testimony from Olenicoff’s former UBS banker, Bradley Birkenfeld, the only other defendant remaining of 39 originally sued.

Birkenfeld’s evidence helped lead to criminal charges against UBS in 2009. The bank avoided prosecution by paying $780 million, admitting it helped thousands of Americans evade taxes and turning over the names of 250 American clients to U.S. authorities. UBS later revealed another 4,450 accounts held by U.S. clients.

Birkenfeld is serving 40 months in a federal prison in Pennsylvania for helping Olenicoff and others evade taxes. At his sentencing, a prosecutor said Birkenfeld exposed a “massive tax scheme” at UBS while hiding his own dealings with Olenicoff.

Offshore Money

Olenicoff said in an April filing that UBS “aggressively solicited” him and promised his offshore money “would be absolutely protected in safe, legal, effective investment structures, which would not result in tax liability or reporting requirements until the money was repatriated.” Those assurances, he said, were untrue and “UBS knew them to be untrue.”

Olenicoff claims UBS and Birkenfeld told him he didn’t have to report his Swiss income to the IRS, which was reinforced by the bank’s system of holding mail and not sending year-end tax information. Had UBS done so, Olenicoff “would have dealt with the situation before the matter rose to the level of a potential criminal liability,” according to his filing.

Olenicoff pleaded guilty after a three-year probe that included a search of his office and house by the IRS in 2005. He admitted that from 1998 to 2004, he filed false returns that hid accounts in Switzerland, Liechtenstein, England and the Bahamas.

U.S. Probe

After UBS admitted it helped U.S. clients cheat on their taxes, a U.S. probe of offshore accounts mushroomed. Prosecutors charged almost 50 customers and about two dozen foreign bankers or advisers with tax crimes. Seven current or former bankers at Credit Suisse AG and Switzerland’s oldest private lender, Wegelin & Co., were indicted. About 33,000 more Americans avoided prosecution by declaring offshore accounts to the IRS.

Olenicoff claimed UBS put his assets in risky investments known as Double Currency Units, or DOCUs. They combined a money market investment with a call option on one currency against a second currency.

Olenicoff built an empire by buying land and building industrial and office parks and apartments in four U.S. states. The developer, who began banking offshore in 1980, said in a 2009 interview that he opened an account in the Cayman Islands and eventually moved tens of millions of dollars to the Bahamas, where he began banking with Barclays Plc. (BARC)

Unsolicited Call

He said he got a call out of the blue in 2000 from Birkenfeld at the Geneva office of London-based Barclays, where he worked before joining UBS.

In its court filings, UBS said Olenicoff lied to the IRS “for at least three years before he met UBS.” After his guilty plea, he filed a Report of Foreign Bank and Financial Accounts for 1998 to 2004, disclosing an interest in 15 foreign accounts in 1998.

Olenicoff claimed that Olen, his company, has been unable to get a loan at market rates since his guilty plea and that as a result, Olen will have to liquidate its real estate holdings.

UBS introduced evidence that Olen got two loans, for $70 million and $250 million. In his ruling, the judge said that UBS showed that “Olenicoff and his witnesses repeatedly lied about the loans in their depositions.”

“Although it is not this court’s job to make credibility determinations on summary judgment, this coordinated blatant lie does not go unnoticed,” he said.

At the hearing today, Newmeyer said that Olenicoff couldn’t get a loan at market rate, not that he couldn’t get one at all.

The case is Olenicoff v. UBS AG (UBSN), 08-cv-1029, U.S. District Court, Central District of California (Santa Ana).

To contact the reporter on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net.

Swiss arrest warrants fuel tax row with Germany

                                                                     German politicians have long complained about Switzerland's strict banking secrecy

2 April 2012 Last updated at 11:24

German opposition politicians are threatening to block a deal with Switzerland to tackle tax dodgers after the Swiss issued arrest warrants for three German tax officials.

The warrants accuse the three of industrial espionage by getting the secret details of accounts at the Swiss bank Credit Suisse.

The data about German tax dodgers was on a CD bought by German investigators.

The German parliament has not yet approved the tax deal with Switzerland.

Berlin estimates that 130-180bn euros (£108-150bn; $173-240bn) of German citizens' deposits in Swiss banks are liable for tax.

Berlin has reached a deal with Switzerland to tax the deposits at 26.4% minimum - the same rate as in Germany - from next year, German media report.

But the opposition Social Democrats (SPD) and Greens, who control several German states, are not happy with the deal, saying it has too many loopholes. They can block it in the upper house of parliament, the Bundesrat.

In 2010 tax officials from North Rhine-Westphalia state, governed by the SPD, paid a whistleblower 2.5m euros for a CD containing the names of people evading tax in Germany by using Swiss bank accounts.

Switzerland accuses the officials of violating its banking secrecy laws and industrial espionage.
Tax inspectors also raided branches of Credit Suisse in Germany in 2010.

Tax haven criticised

Switzerland's secretive banks have faced growing pressure internationally as governments try to recover taxes in the wake of the financial crisis.

The Economy Minister of Germany's Baden-Wuerttemberg state, Nils Schmid (SPD), said the Swiss warrants were "a bad sign" that "does not contribute towards a tax agreement between Germany and Switzerland".

North Rhine-Westphalia's Finance Minister, Norbert Walter-Borjans of the SPD, called the Swiss move "an attempt at intimidation" and vowed that his officials would buy such CDs again if necessary in future.

The BBC's Steve Evans in Berlin says the Swiss move is a sign of the tensions between governments trying to maximise tax revenues and countries with powerful banks who want to protect the identities of rich customers.

The SPD deputy leader in the Bundestag (lower house), Joachim Poss, said German Finance Minister Wolfgang Schaeuble "has apparently not yet grasped the scale of the conflict [with Switzerland]".

"Instead of expressing understanding for the Swiss position I expect from him a crystal-clear statement of the German state's legal position", he told the Saarbruecker Zeitung.

He said Mr Schaeuble must urge the Swiss to abandon their policy of "sheltering cross-border tax crimes".

Germany denies strained Swiss relations

Arrest warrants connected with CDs containing stolen customer data have ruffled some German feathers (Keystone)

 

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The German government says a Swiss decision to issue arrest warrants for three German tax inspectors hasn’t damaged relations between the two countries.

It insisted on Monday that the incident illustrated the need to get a stalled deal on tax evasion approved.

Germany’s centre-left opposition condemned the Swiss move when word of it emerged over the weekend. It is part of an investigation into German authorities’ 2010 purchase of a compact disc containing data on suspected tax cheats.

German Finance Minister Wolfgang Schäuble said at a meeting with European counterparts in Copenhagen that the incident wouldn’t affect the tax deal, and noted that “Switzerland has its criminal law”, which includes punishments for violating bank secrecy.

For a long time the Swiss authorities have only given administrative assistance to other governments in cases of tax fraud (for example falsifying documents) but not evasion (“forgetting” to declare your assets).

It’s a subtle legal difference, incomprehensible for other countries, but one on which banking secrecy has long thrived. Banking secrecy was even enshrined in Swiss law in 1934 – break it and you could end up in prison.

The German government argued the problem would be resolved – and Swiss legal proceedings against the tax inspectors ended – by the planned deal to end a long-running dispute over German tax evaders. That deal, negotiated last year, is being held up by German opposition objections.

Opposition

Steffen Seibert, spokesman for Chancellor Angela Merkel, sought to downplay suggestions that relations between the two countries were strained.

“She sees, as does the whole government, that there are questions that have been unresolved for decades between Germany and Switzerland, and so there are good reasons to have this tax agreement take effect on January 1, 2013,” Seibert told reporters.

The deal would allow Germans with undeclared assets in neighbouring Switzerland to escape punishment by making a one-time payment, and imposes a flat withholding tax on capital gains in the future on German residents’ wealth in Switzerland.

It needs approval from parliament’s upper house, which represents Germany’s 16 states and where Merkel’s government lacks a majority.

That means the government needs support from states governed by the opposition Social Democrats.

However, they want tougher terms than originally negotiated and still aren’t satisfied with changes proposed by Switzerland.

“Monstrous”

The tax inspectors targeted by Swiss prosecutors in their investigation of alleged economic espionage regarding stolen data from Credit Suisse come from the opposition-run state of North Rhine-Westphalia, which holds regional elections on May 13.

State governor Hannelore Kraft has described the Swiss move, which would mean the inspectors might risk arrest if they tried to enter Switzerland, as “monstrous”.

A senior Social Democratic lawmaker, Thomas Oppermann, told German tabloid Bild on Monday that the government should offer the tax inspectors the country’s highest decoration, the Order of Merit.

Former German Finance Minister Peer Steinbrück, who in 2009 aroused much anger in Switzerland when he said the Swiss were like “Indians” running scared at the sight of the US cavalry after the Swiss government gave in to strong international pressure on banking secrecy, described the current incident as a “scandal”.

German media reaction

But while some individuals sought to make political hay while the sun shined, German newspapers were more level-headed.

The Süddeutsche Zeitung said outrage in Germany was understandable but pointed to the more liberal concept the Swiss have of the state – “the Swiss understand taxes not as something demanded by the authorities, but the contribution to society of individuals, who themselves decide how much to pay”.

The Frankfurter Allgemeine Zeitung (FAZ) advised the three tax inspectors to spend their next holiday in Austria rather than Switzerland. It added that the issue was not about three civil servants but about the relationship between sovereign states and the question of whether a country ought to resort to legally dubious methods to implement its laws.

“The person who wants everything sometimes gets nothing,” it said.

Die Welt agreed, pointing out that Switzerland wasn’t some colony into which the cavalry could be sent. “With sovereign states there’s only one solution: negotiate. Negotiate how to avoid the tendency – not only of Germans – to hide money from the tax man in Switzerland”.

…and Swiss reaction

Swiss editorialists struggled to find a common line.

“Once again, the German need for justice and the Swiss understanding of state and democracy crash into each other headfirst,” wrote the Neue Zürcher Zeitung.

“Let’s forget the tax deal with Germany,” urged the SonntagsZeitung. “In terms of legal certainty, Switzerland has made clear that it’s not acceptable for German tax inspectors to snap up stolen customer data from Switzerland and break laws.”

Tabloid Blick said the arrest warrants would represent a “further escalation” and countermeasures would be just around the corner.

Nevertheless, the warrants were important, it said, because they clearly showed on whose side the Swiss law stood: that of the foreign tax cheat.

“Being a safe for as many people as possible who cheated their own country was a business model for a long time,” it said. “It isn’t any longer.”

Thomas Stephens, swissinfo.ch and agencies

Germany: investigation of tax inspectors doesn't damage relations with Switzerland

• THE ASSOCIATED PRESS  
• First Posted: April 02, 2012 - 7:43 am
• Last Updated: April 02, 2012 - 8:49 am

Photos:

The Swiss national flag on top of Switzerland's embassy flies in the wind in front of the glass dome of the Reichstag building which hosts the German Parliament in Berlin, Monday, April 2, 2012. Last week Swiss authorities issued arrest warrants for three German tax inspectors over the purchase in 2010 of a CD containing data on suspected tax cheats. The Swiss federal prosecutor's office said that it had sought legal assistance from German authorities in an investigation of the theft of Credit Suisse data. (AP Photo/Markus Schreiber)

BERLIN — The German government said Monday that a Swiss decision to issue arrest warrants for three German tax inspectors hasn't damaged relations between the two countries, and insisted it illustrates the need to get a stalled deal on tax evasion approved.

Germany's center-left opposition condemned the Swiss move when word of it emerged over the weekend. It is part of an investigation into German authorities' 2010 purchase of a compact disc containing data on suspected tax cheats.

But the government noted that the two countries have different laws regarding tax evasion and bank secrecy. It argued the problem would be resolved — and Swiss legal proceedings against the tax inspectors ended — by the planned deal to end a long-running dispute over German tax evaders. That deal, negotiated last year, is being held up by German opposition objections.

Steffen Seibert, spokesman for Chancellor Angela Merkel, sought to downplay suggestions that relations between the two countries were strained.

"She sees, as does the whole government, that there are questions that have been unresolved for decades between Germany and Switzerland, and so there are good reasons to have this tax agreement take effect on Jan. 1, 2013," Seibert told reporters.

The deal would allow Germans with undeclared assets in neighboring Switzerland to escape punishment by making a one-time payment, and imposes a flat withholding tax on capital gains in the future on German residents' wealth in Switzerland.

It needs approval from Parliament's upper house, which represents Germany's 16 states and where Merkel's government lacks a majority. That means the government needs support from states governed by the opposition Social Democrats.

However, they want tougher terms than originally negotiated and still aren't satisfied with changes proposed by Switzerland.

The tax inspectors targeted by Swiss prosecutors in their investigation of alleged economic espionage regarding stolen data from Credit Suisse come from the opposition-run state of North Rhine-Westphalia, which holds regional elections on May 13.

State governor Hannelore Kraft has described the Swiss move, which would mean the inspectors might risk arrest if they tried to enter Switzerland, as "monstrous."

A senior Social Democratic lawmaker, Thomas Oppermann, told Germany's Bild newspaper Monday that the government should offer the tax inspectors the country's highest decoration, the Bundesverdienstkreuz.

Lawsuits Test UBS Advice on Offshore Bank Accounts

(Reuters) (April 2, 2012)

By Lynnley Browning

The case of a wealthy U.S. businessman who pleaded guilty to evading taxes but then sued the Swiss bank where he hid his money is scheduled to go to trial on May 8, the first major test of civil legal challenges to Swiss banks that sold offshore private banking services to help Americans evade taxes.

 

The civil suit, filed against UBS AG in federal court in Santa Ana, California—and another filed against UBS in federal court in Chicago—will probe whether clients can legally rely on their private bankers' assertions there is no need to disclose the accounts on their tax returns or sign required disclosures.

Tax lawyers describe the suits, emerging from a crackdown by federal authorities on Swiss banks, as the first of their kind in the United States to assert that Swiss bankers made improper assertions to their U.S. clients about the tax implications of their offshore accounts.

In the California case filed in 2008, Russia-born American billionaire Igor Olenicoff accuses UBS of fraud in handling some $200 million he kept in offshore accounts and wrongfully advising him he did not have to report them to the tax-collecting IRS. Olenicoff pleaded guilty to tax evasion in 2007 and to lying on his tax returns by failing to disclose his offshore accounts, and paid $52 million in back taxes. His suit seeks $500 million in damages.

The Chicago case, which seeks class-action status, was filed in June 2011 on behalf of former UBS clients Matthew Thomas of California and Himanshu Patel of Arizona. Thomas and Patel previously paid back taxes, interest and penalties to the IRS related to their Swiss accounts. They accuse UBS of fraud and breach of fiduciary duty for allegedly telling them that their accounts, opened when the two worked overseas during the last two decades, did not have to be disclosed to the IRS.

UBS argues in both cases that its clients have a duty to know what to declare on their U.S. tax returns. A UBS spokeswoman in New York, Karina Byrne, declined to comment specifically on the lawsuits, but said the bank "does not give any tax advice to our clients, and we encourage clients to seek third-party tax advice."

U.S. Investigation Underway
The two cases are unfolding at a time when U.S. authorities are conducting a major investigation into the Swiss banking industry. The U.S. Justice Department has indicted one Swiss private bank, Wegelin, and charged scores of Swiss bankers and their American clients with tax evasion.

In 2009, UBS averted indictment and paid a $780 million fine to the U.S. Justice Department as part of a deferred-prosecution agreement in which it admitted to fraud and conspiracy in helping about 19,000 wealthy Americans hide up to $20 billion in secret bank accounts.

Olenicoff's name had been provided to the U.S. Justice Department earlier. The other two plaintiffs came forward to the IRS through voluntary disclosure programs, created in the wake of the UBS probe, which drew in 33,000 U.S. taxpayers with unreported accounts in Switzerland and elsewhere.

It is legal for U.S. residents to hold offshore bank accounts, but the IRS requires taxpayers to disclose the accounts on their tax returns as well as to sign special disclosures provided by the banks, known as W9 forms.

Under a U.S. Treasury program known as qualified intermediary, banks are required to collect the W9 forms and withhold taxes—typically 28 percent to 31 percent—on proceeds from U.S. securities held in client accounts and to send that money to the IRS.

If clients refuse to sign the disclosures, the banks must sell any U.S. securities held in the offshore accounts, a process that triggers a tax bill for the client and a requirement that the bank report the sale and the client's identity to the IRS.

UBS admitted as part of its agreement in 2009 that it did not collect or require clients to sign the forms, while concealing their identities from the IRS under Swiss bank secrecy laws. Olenicoff, a property developer whose wealth was estimated by Forbes in March 2012 at $2.6 billion, argues in part that UBS told him he did not have to sign the disclosures and that the investment accounts he was in complied with
 U.S. tax laws.

Fiduciary Duty

In March 2010, the judge in Olenicoff's case rejected UBS's motion to dismiss the case, noting that "while banks typically do not owe fiduciary duty to their depositors, there are some situations where a fiduciary duty is owed."

Thomas and Patel allege that UBS never told them they had to sign W9s and failed to withhold required taxes on U.S. securities in their accounts.

David Deary, a Dallas-based lawyer for Thomas and Patel, said the potential number of plaintiffs in his case, which would cover American customers of UBS from 2002-2008 who entered voluntary disclosure programs with the IRS, could reach 25,000.

"Our clients simply followed UBS's advice that they did not have to declare and pay taxes on the investment income," he said.

Some tax experts, including Jay Soled, an accounting professor specializing in tax at Rutgers University, say potential plaintiffs might not come forward for fear of airing dirty laundry about their own taxes.

The cases against UBS may differ in one key way from the fraud and breach of fiduciary duty claims filed in recent years against some accounting, auditing and law firms by wealthy Americans who had bought tax shelters. Plaintiffs in those civil cases, which resulted in hefty settlements, were bolstered by legal opinions from the law firms blessing their invalid shelters—something the UBS clients lack, tax lawyers said.

Larry Campagna, a tax lawyer at Chamberlain Hrdlicka in Houston, said most juries would be unsympathetic to a wealthy U.S. resident who relied on a foreign banker for tax advice.

But Jonathan Strouse, a tax lawyer at Holland & Knight in Chicago, said that even if Swiss bank clients had a duty to know they should have reported the secret accounts on their tax returns, they could still have "false representation" cases against banks which gave them improper information.

"A lot of the clients had huge tax bills, and they're going to be looking to get back anything they can from the banks," Strouse said.

(Reporting by Lynnley Browning in Fairfield, Conn. Editing by Amy Stevens, Howard Goller and Richard Chang)

Report: Swiss authorities issue arrest warrants for 3 German tax inspectors

 By Associated Press, Published: March 31

BERLIN — Swiss authorities have issued arrest warrants for three German tax inspectors over the purchase in 2010 of a CD containing data on suspected tax cheats, according to a German newspaper — infuriating a German state governor.

The Bild am Sonntag newspaper reported Saturday that the Swiss accused the officials of “economic espionage” in a letter to authorities in the German state of North Rhine-Westphalia.

It quoted state governor Hannelore Kraft as saying that the move was “monstrous.”

“The tax inspectors were only doing their duty to chase German tax cheats,” Kraft added.

The Swiss federal prosecutor’s office said that it had sought legal assistance from German authorities in an investigation of the theft of Credit Suisse data. However, it said in a brief statement that it could not give details of the request for assistance. It said there is a “concrete suspicion that concrete orders were issued from Germany to spy on information” of Credit Suisse.

The incident comes as opposition-led German states — including Kraft’s — are blocking a German-Swiss agreement meant to end a long-running spat over tax evasion by Germans.

It would entail Germans making one-time payments to legalize money hidden in Swiss bank accounts and foresees a so-called withholding tax on future income from assets in Switzerland.

The deal needs approval by the German Parliament’s upper house, which represents Germany’s 16 states and where Chancellor Angela Merkel’s center-right government lacks a majority.

The states governed by Kraft’s Social Democrats want tougher terms than originally negotiated and aren’t satisfied with changes proposed by Switzerland — though Germany’s federal government says it hopes for movement after North Rhine-Westphalia and another state hold regional elections in May.

“There are still overly big loopholes for German tax cheats,” Kraft said, according to Bild am Sonntag. “That can’t be explained to honest citizens.”

German news agency dapd reported that German Finance Minister Wolfgang Schaeuble said at a meeting with European counterparts in Copenhagen that the incident wouldn’t affect the tax deal, and noted that “Switzerland has its criminal law” — which includes punishments for violating bank secrecy.

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