Should governments buy stolen data when hunting tax evaders?

That’s the question a series of governments across Europe have been grappling with in the last few months. Stolen Swiss bank data reveals key evidence about tax evaders from several countries. Not only is it stolen data but it is only being made available at a price:

A CD identifying around 1500 Germans who have illicit Swiss accounts was procured by a former employee at the Geneva branch of HSBC bank. The disc, which could return an estimated €200 million ($393 million) in lost revenue, was offered to the German Government for €2.5 million…

Merkel and her Finance Minister, Wolfgang Schuble, initially greeted the offer as a welcome means of bringing tax evaders to book. “Like everyone else, I think that tax evaders need to be uncovered,” Merkel said.

[Earlier this month], however, it became clear that Germany’s apparent readiness to buy stolen bank data had plunged Merkel into a row with Switzerland and her own conservative Christian Democratic Union. Leading members of the party described the plan to buy the CD as immoral (Source)

In 2008, the German secret service paid up for similar data from Liechtenstein’s LGT bank and it’s not only Germany where the data has caught the eye of those on the trail of tax evaders:

The Netherlands also confirmed it is seeking copies of stolen Swiss bank data on cross-border tax evaders that the German government is considering purchasing from an informant. Belgium also wants copies of the data. (Source)

In addition to the debate about whether stolen data should be purchased and then used as evidence, there is also the question of whether acquiring such data helps or hinders the attempts to put pressure on governments such as the Swiss to change their bank secrecy laws in order to make it harder for tax dodgers to hide. Does buying stolen data and highlighting the scale of evasion (and by implication the level of profits being made by banks from such evasions) increase the pressure or does it make governments feel under siege and less willing to help?

So over to you and the comments thread…

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5 Comments

  • In short Tom is right in all respects.

    But to push it further…

    You could also pose the question, should governments get their intelligence agencies to hack in to banks computers overseas to obtain data on tax evaders? Exactly the same effect.

    If you are not uncomfortable about that should governments intelligence agencies hack in to foreign websites to identify who is posting comments critical of the country’s foreign policy that could be said to “aid and comfort” the countries enemies (technically illegal under the Treason Act 1351)?

    You don’t step to far before you find yourself in a rather unpleasant place.

  • if we bought property, knowing it was stolen, we would go to jail. a government is a representation of the people and should be held to the same standards.

  • If Governments don’t buy the information publicly, it will just get pushed underground and will change hands anyway so a bit of a wasted convo imo.

One Trackback

  • By News updates: tax-dodging Germans and Andrew Rosindell on Mon 1st March 2010 at 9:20 pm.

    […] February I reported on the question facing various governments in Europe: should they buy stolen data which will help identify law breaking tax-dodgers? The German government did this in 2008 and the threat of a repeat was sufficient to cause a […]

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