Monday, February 18, 2008

How much does Germany's finance ministry care about Liechtenstein's promotion of crime?

We have already blogged about the emerging tax scandal between Germany and Liechtenstein, and of some of the strange things that happen there. One of the most surprising comments comes from Torsten Albig, a spokesman for Germany's finance ministry, who is quoted as saying.

"It is all about criminality ... the problem is not the possibilities presented by Liechtenstein, the problem is the criminal energies of German tax evaders," he said.

This is a shocking statement. Taken at face value, the part "the problem is not the possibilities presented by Liechtenstein" appears to mean that Germany's finance ministry is saying that the corruption and criminality that Liechtenstein allows and promotes is not the issue to be tackled. Now we have tracked down the original quote in German, and it seems that his comments are more nuanced when taken in a wider context. But the comment itself is unambiguous. And we reject its implication that Liechtenstein is not beyond the pale.

And, while we're one the subject of strange statements, try this for size from Liechtenstein's ambassador in Germany, Prinz von und zu Liechtenstein (quoted by Der Spiegel from a TV interview with the prince and translated by TJN): He emphasised that tax evasion isn't legal in Liechtenstein, either: "This is often overlooked in this heated debate. We also don't invite anybody from abroad to it." And then he added that tax evasion is, however, dealt with differently in Liechtenstein. "When somebody evades taxes here it's as though you breach the traffic rules. It's then simply settled." (Richard Murphy has blogged this, ending it with: "I stand by my suggestion that Liechtenstein is a corrupt state that knowingly supports the supply of corruption services.")

Endnote: Richard Murphy has written a series of blogs on this. One is his investigation into how the Big Four accountancy firms seem to be embarrassed about their presence in Liechtenstein. He also looks into Liechtenstein and how its secrecy works, and on the ethics of using a paid informant to crack bank secrecy. He notes a similarity between Liechtenstein laws and those in the UK. He asks, tongue in cheek, why the Center for Freedom and Prosperity, a defender of tax havens, is so curiously silent on this scandal. He also notes a refreshingly harsh new tone from the OECD and points to a nice FT editorial looking at all this.

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