German Tax Experts Expect Dramatic Rise In Money Laundering Arrests

by Ulrika Lomas, Tax-News.com, Brussels

16 August 2001

DSTG, the professional association for German tax experts announced recently that it expects the number of arrests relating to money laundering and tax evasion to rise significantly in the run-up to the introduction of the euro. The German tax authorities have stepped up their campaign to halt the exodus of undeclared cash over the country's borders, deploying a team of mobile customs controllers to monitor the movements of individuals, trains, and aeroplanes.

'Finance Minister Hans Eichel has made the fight against money laundering and 'dirty' money a priority,' explained Dieter Ondracek, the President of the DSTG. Throughout the eurozone, the pressure is on for tax evaders to liquidate their hidden cash before the introduction of the euro, and several other countries, including Ireland and Spain, have reported an increase in the purchase of luxury property and cars as evaders attempt to rid themselves of undeclared national currency.

However, perhaps due to its proximity to countries with attractive banking secrecy laws such as Switzerland, Liechtenstein, and Luxembourg, Germans seem to prefer to transfer the cash into offshore accounts, where it will be immediately converted to euros at the beginning of 2002.

According to Mr Ondracek, there was a tenfold increase in the number of money laundering and tax evasion related border arrests in the year 2000, bringing the total for that period up to 2,000. 'This year there'll be further acceleration,' he predicted. 'It's clear that real panic has broken out among the tax evaders.'

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