GENEVA, SWITZERLAND – A Montreal man who was among 1,700 whose names were provided to the Canadian revenue service after bank data was stolen by a Geneva HSBC computer employee is now suing his country’s tax department. The suit brought against the Canada Revenue Agency in March comes as a Zurich court has gone after German tax authorities for accepting stolen data.
The CBC broadcasting company reports that the “application seeks an injunction to prevent the government from continuing to use “stolen data” to find out more about Canadians with Swiss bank accounts.
It also suggests that because the Canada Revenue Agency may be conducting a clandestine criminal investigation, Canadians with offshore bank accounts should not have to give the CRA information that might lead to criminal charges.”
The case dates back to data stolen by Frenchman Herve Falciani, who called himself a whistleblower and who tried to sell the information, which was at least three years old, to a number of governments. A French high court ruled early in 2012 that the data could not be used.
PARIS, FRANCE / GENEVA, SWITZERLAND – The French high court (Cours de cassation) in Paris published a ruling Tuesday 31 January that data stolen in 2007 from British bank HSBC in Geneva by its employee Hervé Falciani cannot be used by French tax authorities because it was illegally obtained. Falciani turned over the list of more than 15,000 bank accounts to the French tax office and Nice attorney general Eric de Montgolfier. France identified 3,000 of these as falling under French tax jurisdiction and shared the remaining data with Italy and Portugal.
Swiss news agency ats cites French media as saying that only 800 of the accounts have been reviewed, and the remaining account holders, if they are not yet tax compliant, have nothing to fear from the data theft. The Swiss agency cites “informed sources” as saying that French tax officials knew the information could not be used, but held the data over clients’ heads to pressure them into identifying themselves to the tax office.
Background, GenevaLunch: Falciano and HSBC data theft
Bern, Switzerland (GenevaLunch) – The Swiss Federal Council Wednesday 1 September adopted an ordinance, soon to be replaced by a law, on the procedures to be followed when another country asks for assistance in cases of suspected fiscal fraud. A key element in the text is that the Swiss government will not accept a demand for “administrative assistance” under double taxation treaties if the request is made based on stolen data. The federal tax service will make a preliminary review of the request, which must show “good faith”, the new ordinance dictates. It goes into effect 1 October 2010, but is not retroactive.
A second key element is that the requesting government must provide adequate information to allow Switzerland to identify the account holder and the party holding information about the account, in order to avoid what are called fishing expeditions. Tension rose in 2009 between France and Switzerland over what the Swiss labelled at the time a fishing expedition. France later dropped its request.
Germany and France have both received stolen data from Swiss banks, a cause of some political tension. The UBS case, where a special treaty was drawn up between the US and Switzerland to review data on 4,450 cases of suspected tax fraud, was not based on stolen data per se, but rather on information supplied by a former employee of the bank, to US authorities.
Update Zurich, Switzerland (GenevaLunch) - Credit Suisse has confirmed weekend Swiss media reports that it is restricting travel for staff in Germany, following an announcement Friday by the German government that it is investigating 1,100 cases of tax evasion and that the investigation includes looking at the role played by Credit Suisse staff. “We already have restrictions on travel in place and now these are being applied very strictly in the case of Germany,” a Credit Suisse spokesman told Reuters Sunday. A German official told Swiss magazine Blick the accounts could be worth an estimated €1.2 billion.
Germany has been threatening for months to use information it purchased in 2008, stolen from a bank in Liechtenstein, LGT, to investigate tax evasion cases. In recent weeks tensions have risen between Germany and Switzerland over Germany’s efforts to buy data held by France that was stolen from HSBC in Geneva.
Background, GenevaLunch
Herve Falciano recounted a saga of life in a thriller to Nice Matin newspaper but there is little evidence to back the story
Geneva, Switzerland (GenevaLunch) - Europe’s largest bank made a startling confession, accompanied by an apology, to its clients 11 March: Britain’s HSBC said it had been given evidence by the Swiss Federal Prosecutor that a Geneva office employee stole data linked to 24,000 client accounts and tried to sell the information abroad. The employee, Hervé Falciani, had tried to flog that data to Lebanon in 2008. His failed attempt was the start of the unraveling of his theft scheme. Evidence of efforts by Falciani and a female companion for the first time linked his name to the theft, which the Swiss government had been investigating for several weeks.
Human factor is the real risk for an international company with secrets
It also drew attention to a significant problem for international companies that have any private data, from client information to research and development data: It takes a human being to steal for personal gain, so knowing staff well is as critical to security as a good IT system. Laws inside a country may protect corporate secrets and privacy, but once international boundaries are crossed the issue of countries not extraditing their own citizens can become an issue.
Thief, spy saga victim or honest whistleblower: Falciani’s many faces
Hans-Rudolf Merz, Swiss finance minister, says the stolen bank data dispute must not be allowed to escalate
Bern, Switzerland (GenevaLunch) - The Swiss Federal Council says it will insist that any discussion about bank data stolen from Swiss banks and offered to Germany must take place during negotiations for a double taxation agreement. Switzerland has initialed 18 of these with other countries since March 2009 and it is in the process of negotiating one with Germany. Bern said in a statement Wednesday afternoon 3 February that it is cannot accept the argument that stolen data should be used to boost tax revenues.
“In its meeting today, the Federal Council expressed its astonishment at the German government’s indication of its readiness to take up the offer to obtain data on clients of a Swiss bank. Recently there has been an increase in the theft of Swiss bank client data which is subsequently sold abroad. This is a criminal offence in Switzerland.
All quiet on the Swiss front over Germany’s threat to buy stolen bank data
Update 10:40 Bern, Switzerland (GenevaLunch) – The Swiss government has issued a statement following a speech Monday by German Chancellor Angela Merkel where she said that Germany is ready to buy stolen Swiss bank data. Bern says in a brief note that Germany’s finance minister, Wolfgang Schaeuble, telephoned Swiss Federal Councilor and Finance Minister Hans-Rudolf Merz Monday. Merz told his German counterpart that Switzerland will not provide judicial assistance for requests which are based on stolen data. He added that Switzerland is, however, prepared to work more closely with Germany to unmask fiscal fraud, within the context of a revised double taxation treaty.
Switzerland has in recent months negotiated more than a dozen such treaties with other countries. It is currently in negotiations with Germany for a new treaty.
Merkel’s speech was made after Merz was contacted by Schaeuble by telephone to say that the German government has been approached with an offer to sell information on 1,500 bank clients for abut CHF3.5 million.
Zurich, home to banking thrillers
Zurich, Switzerland (GenevaLunch) – Call them whistleblowers if you believe their consciences have overcome them, or thieves if you think they’ve broken the law. Whatever the label, people who take client data from Swiss banks that employ them, then offer the information to another government, are suddenly back in the headlines.
French officials told Swiss news agency ATS Thursday evening 21 January that France has handed back to Switzerland data stolen by a French citizen. It made the announcement a day after the Swiss Finance Department said it would not provide administrative assistance to countries in cases where stolen information was used. France told ATS it has kept copies of some of the information, for its own investigations.
The data was stolen from British bank HSBC in Geneva, by Frenchman Hervé Falciani. The case came into the public spotlight late in 2009.
Switzerland is reviewing its legislation with an eye to setting clearer limits for handing over data to a treaty partner when it demands assistance in suspected tax fraud cases.
US newspaper says whistleblowers “chipping away” at bank secrecy
Falciani was not the first bank employee to pocket data. American Bradley Birkenfeld stole UBS client data in 2008 and gave it to the US tax authority, the IRS in a case that has had a major impact on the bank’s reputation and which badly strained US-Swiss relations.
To believe the New York Times 19 January, Swiss Rudolf M Elmer has just become the first whistleblower of 2010, a man who “is chipping away at the centuries-old traditions of Swiss banking secrecy,” in line with Falciani and Birkenfeld.
Bern, Switzerland (GenevaLunch) -The latest twist in the increasingly tangled tale of client data stolen from HSBC in Geneva comes from the thief himself, formerly known as Hervé Falciani. The former HSBC computer system employee who now lives under a new identity in the south of France told French journalists from Nice Matin that in August 2008 he was kidnapped by two men in a van in Geneva’s Champel district. The men were of unclear Middle Eastern origin, perhaps Israeli, says Falciani, who accuses his Lebanese girlfriend at the time of being part of a plot to discredit him.
The Lebanese link has surfaced following accusations by Switzerland that Falciani was trying to sell the names and other information about bank clients, which he acknowledges he stole, to several governments, notably Lebanon.
