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Mar 31, 2012 at 09:35pm IST

Switzerland seeks arrest of 3 German tax officials: report

Berlin: Swiss authorities have issued arrest warrants for three German tax inspectors over the purchase in 2010 of a CD containing data on suspected tax cheats, according to a German newspaper, infuriating a German state governor.

The Bild am Sonntag newspaper reported today that the Swiss accused the officials of "economic espionage" in a letter to authorities in the German state of North Rhine-Westphalia.

It quoted state governor Hannelore Kraft as saying that the move was "monstrous."

Switzerland seeks arrest of German tax officials

Swiss authorities have issued arrest warrants over the purchase of a CD containing data on suspected tax cheats.

"The tax inspectors were only doing their duty to chase German tax cheats," Kraft added.

The Swiss federal prosecutor's office said that it had sought legal assistance from German authorities in an investigation of the theft of Credit Suisse data.

However, it said in a brief statement that it could not give details of the request for assistance.

It said there is a "concrete suspicion that concrete orders were issued from Germany to spy on information" of Credit Suisse.

The incident comes as opposition-led German states, including Kraft's, are blocking a German-Swiss agreement meant to end a long-running spat over tax evasion by Germans.

It would entail Germans making one-time payments to legalize money hidden in Swiss bank accounts and foresees a so-called withholding tax on future income from assets in Switzerland.

The deal needs approval by the German Parliament's upper house, which represents Germany's 16 states and where Chancellor Angela Merkel's center-right government lacks a majority.

The states governed by Kraft's Social Democrats want tougher terms than originally negotiated and aren't satisfied with changes proposed by Switzerland, though Germany's federal government says it hopes for movement after North Rhine-Westphalia and another state hold regional elections in May.

"There are still overly big loopholes for German tax cheats," Kraft said, according to Bild am Sonntag. "That can't be explained to honest citizens."

A German news agency reported that German Finance Minister Wolfgang Schaeuble said at a meeting with European counterparts in Copenhagen that the incident wouldn't affect the tax deal, and noted that "Switzerland has its criminal law", which includes punishments for violating bank secrecy.

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