French spy on tax dodgers in Switzerland
French tax investigators have been visiting Switzerland without authorisation to investigate French citizens suspected of dodging taxes, the Federal Prosecutor’s Office has confirmed. But there is insufficient proof to stop such actions, it admits.
According to a report by the Le Matin Dimanche and SonntagsZeitung newspapers on Sunday, French tax investigators regularly travel to Switzerland pretending they are on holiday to carry out secret investigations into French citizens suspected of hiding funds.
Federal prosecutor Michael Lauber told the papers he was aware of these illegal missions, which he described as “violations of national sovereignty”.
But the Swiss official admitted it was very difficult to find sufficient evidence to open a case against the tax agents.
The journalists spoke anonymously to various members of the French national tax investigation office (DNEF) based in Paris.
“We are not authorized to travel to Switzerland without an official mission order,” one officer explained. “However, nothing prevents us from spending a weekend in Geneva admiring the Jet d’eau fountain on Lake Geneva.”
He added that in recent years the Swiss authorities had been very slow to reply to official French requests to conduct investigations on Swiss soil.
“In such circumstances there is a temptation to go and obtain the information on our own,” the officer said.
The French tax officials reportedly travel to Switzerland with a friend or family member when they are supposed to be officially on holiday. They use private credit cards for all purchases in Switzerland and to avoid being caught by Swiss customs or radars, the officials purportedly use cars with interchangeable number plates or take a train.
Once in Switzerland they travel around to make sure Swiss-based companies allegedly belonging to French citizens actually have real offices, employees and clients.
Strained relations
In recent years bilateral relations between the two countries have been strained notably about untaxed assets in Swiss bank accounts and a planned reform of an agreement on inheritance tax.
Switzerland has signed so-called Rubik accords with Britain, Germany and Austria, which regulate the previously non-declared, untaxed funds deposited by foreign nationals in Switzerland while preserving client anonymity.
But France has so far rejected the idea of a bilateral accord with the Swiss concerning tax evasion, preferring an automatic data exchange as also demanded by the European Union.
In 2009 a high-profile bank data case dented relations. Hervé Falciani, a former HSBC bank employee accused of stealing data on up to 24,000 secret Swiss accounts from the British lender, handed them to the French tax authorities.
An international warrant for his arrest was issued by the Swiss in August 2010, which was ignored by the French as they do not extradite their own citizens. Falciani has since been arrested by Spain and is being held on a request by Swiss authorities seeking his extradition.
The data theft triggered a brief spat between Switzerland and France when the French authorities announced they would use the data to probe suspected evasion by French taxpayers with secret Swiss accounts.
However, Paris and Bern reached a deal to resolve the row. As part of an agreement to move forward on a double taxation accord, France said it would not request administrative assistance in obtaining information about suspected tax evaders whose details were contained in the stolen data, and it agreed to provide Switzerland with copies.
Switzerland and France share a 600km common border and about 20% of the Swiss population, mainly in the west of the country have French as their mother tongue.
France is Switzerland’s third most important trading partner.
Together with Germany, France and Switzerland also run the EuroAirport outside Basel.
Bilateral relations between the two countries have been strained notably about untaxed assets in Swiss bank accounts and a planned reform of an agreement on inheritance tax.
Negotiations are underway over closer cooperation with France on railway transport.
In 2010, Switzerland was home to 95,600 French citizens. This had risen from 73,500 in 2006, due largely to the implementation of the free movement of people agreement with the European Union.
The French represented the fifth-largest group of foreigners living in Switzerland (after Italy, Germany, Portugal and Serbia), although the number would be higher taking into account those who have not registered at the consulate.
A total of 170,000 Swiss live in France, the biggest Swiss expat community.
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