Wednesday, February 20, 2008

Germany bullies Liechtenstein

Recent European news headlines had a very shocking topic: supposedly, thousands of German citizens are being investigated by federal authorities for a tax evasion scandal that could amount into the hundreds of millions of euros. Apparently, these people had fortunes invested into financial institutions of the Principality of Liechtenstein.

But what is more troubling is Germany’s position towards the Principality. Traditionally, Liechtenstein has been a European tax haven with a strict bank secrecy code. Germany is now accusing Liechtenstein of actively encouraging tax evasion for European citizens, and threatens the tiny country with sanctions and isolation.

Prince Alois of Liechtenstein has stepped up, protecting his country, businesses and customers, accusing Germany of a persecution and publicly denouncing Germany’s stance over the issue.

Now, let’s talk a little bit about this topic. Even though Germany is presenting itself as a deeply wound victim, the matter of fact is that it is known that the German government obtained the information causing the scandal by questionable means. The Financial Times reported on Wednesday that the Bundesnachrichtendienst (BND), a German spy agency, obtained the information by buying it from an ex-employee of LGT Treuhand AG, one of Liechtenstein’s financial institutions. If this were true, it would mean that the Germans obtained this information not only illegally, but also violated Liechtenstein’s jurisdiction and sovereignty by conducting secret-investigative operations into a foreign country. Furthermore, under modern legal doctrine, the way this evidence was obtained is not legal, thus causing its immediate invalidity under the principles of fairness, justice and equal opportunities of legal defense.

But even more troubling is Germany’s current position against Liechtenstein. Called already a battle between David and Goliath, Germany is bullying the tiny principality, taking advantage of its size and influence in the European Union, to manipulate Liechtenstein into changing its jurisdictional framework and the core principles of its financial center. That, under any circumstance, has a name: it is called “abuse of power”. The current aggressive stance of Germany against the principality reminds me of Condolezza Rice and the USA’s frequent policy of international confrontation, lately used against North Korea, Iran and others that simply do not abide to American tastes.

It is truly a deception to see the German government engage into such practices of foreign policy. The Germans must understand and respect that every country has its law system that must be respected, such as they want their own to be. The road to resolve this conflict does not reside on bullying Liechtenstein: it is not the principality’s fault that German citizens want to evade taxes. Instead of falsely accusing and threatening foreign countries, it is the cause of the issue that the German government should really be examining and resolving.

No comments: