Promoting Peer Pressure — Germany’s Anti-Tax-Evasion Act

The fight against tax havens has caused some majordistortions in the relationship between Germanyand Switzerland. Similar to the approach used in theUnited States in the Stop Tax Haven Abuse Act, Germanyintensified its measures to prevent tax evasion byits own citizens starting with a German intelligenceagency’s purchase of data on Liechtenstein bank accounts.(See Kessler and Eicke, ‘‘Germany’s FruitFrom Liechtenstein’s Poisonous Tree,’’ Tax Notes Int’l,Mar. 10, 2008, p. 871, Doc 2008-3969, or 2008 WTD 52-9.) As a result of that purchase, there were some verbalbattles not only between Germany and Liechtensteinbut also between Germany and Switzerland. The peakwas reached when the German Minister of Finance,Peer Steinbrück, let loose with his much-cited WildWest rhetoric. Reportedly, Steinbrück said at the AprilG-20 meeting in London that the OECD gray list oftax havens is like the 7th Cavalry at Yuma in that itneed not necessarily go into battle, but it is importantthat ‘‘the Indians know that it is there.’’[...]