Switzerland seeks arrest of German tax collectors

BERLIN, March 31 Sat Mar 31, 2012 10:38am EDT

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BERLIN, March 31 (Reuters) - Switzerland has issued arrest warrants for three German civil servants it has accused of industrial espionage by purchasing the bank details of German tax evaders, the finance ministry in North Rhine-Westphalia (NRW) state said on Saturday.

In the latest chapter of an ugly dispute over tax evasion that has strained ties between Germany and its southern neighbour, a spokeswoman for the NRW finance ministry confirmed a report about the warrants due to appear in Sunday's Bild am Sonntag newspaper.

The tax collectors could be arrested if they cross the border into Switzerland, the newspaper said.

"There is a concrete suspicion that specific orders from Germany were issued to use espionage to obtain information from Credit Suisse," the Swiss attorney general said in a statement. "The attorney general has asked German authorities for assistance."

Hannelore Kraft, state premier of Germany's most populous region, told Bild am Sonntag she was appalled by the warrants.

"It's an outrage," said Kraft, who is seeking re-election in a vote on May 13. "The NRW tax investigators were simply doing their job tracking down German tax dodgers who stashed undeclared money in Swiss banks."

Several German states, including NRW, said in 2010 they had bought compact discs containing Swiss bank data from whistleblowers as part of a drive to flush out tax evaders. That prompted thousands of Germans to declare their financial holdings to avoid risking jail terms.

The federal government gave state authorities the go-ahead to buy the information even if it was obtained illegally. Germans have an estimated 150 billion Swiss francs ($200 billion) hidden in secret Swiss accounts.

Germany and Switzerland were working to salvage a landmark deal to tax secret offshore accounts at the weekend after Germany's main opposition party raised 11th hour objections to a compromise plan it said was full of loopholes. Chancellor Angela Merkel's centre-right coalition needs the backing of SPD-controlled states to push the tax deal through the Bundesrat upper house, but so far SPD state premiers have said concessions offered by Switzerland do not go far enough.

The pact that would protect Switzerland's tradition of banking secrecy in return for a punitive Swiss-levied tax on German-held accounts.

Switzerland's strict bank secrecy code has helped it build a $2 trillion offshore financial sector, but it has faced growing international pressure in recent years as foreign governments seek to claw back tax revenues and be seen as being tough on the super rich in the wake of the global financial crisis. (Additional reporting By Matthias Inverardi in Duesseldorf and Katie Reid in Zurich; Editing by Ben Harding)

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