International Intrigue, Swiss-German Style

An otherwise quiet government organization in Europe is attempting to buy secret cross-border bank account data. The unknown organization that has the data is asking $3.5 million for it. Authorities from two countries are trying to negotiate with the data hostage taker. Sound like a plot for a James Bond movie? Actually, this is exactly the dilemma faced by German and Swiss authorities right now! First, a brief background.

Swiss banking laws are renowned for their strict privacy. Wealthy individuals all over the world like to stash cash in Swiss banks. In turn, these banks refuse to report who owns and earns what to tax authorities, thus enabling tax evasion the world over. Last year, a hullabaloo was raised as the U.S. government pressured UBS and the Swiss government to release names of alleged tax evaders to the IRS. UBS was specifically targeted because of its large U.S. presence and clientele.  While tax evasion is not a crime in Switzerland, violating secrecy laws is.

U.S. depositors make up some 5% of Swiss deposits, but Germans account for over 10%. Not surprisingly, the Germans followed the U.S. lead in seeking information on tax evaders. This is where the spy story comes in. According to reports, someone has stolen data from Swiss banks or regulators and offered to sell it to German tax authorities. Samples of the data provided to the Germans have been authenticated as real by the Swiss, so this isn't an amateur scam, though I wonder if black helicopters and night vision goggles were involved?

The dilemma is clear: should German authorities pay a thief to catch more thieves? Was the taking of Swiss data a theft or the international version of whistle-blowing? While these moral dilemmas are perplexing, I can't help but wonder if any of the parties are guilt-free? Are the Swiss morally absolved from assisting tax evasion? Are the Germans (and Americans for that matter) morally justified in seeking to invade privacy? Is the unknown data proprietor an evil law-breaking thief or Robin Hood of sorts? What's your opinion?