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Over 1000 Germans face HSBC tax prosecutions

Tax investigators are working their way through the files of 2,106 people with links to Germany revealed to have had secretive accounts with the Swiss branch of HSBC by leaks on Monday.

Published: 10 February 2015 08:55 CET
Over 1000 Germans face HSBC tax prosecutions
Photo: DPA

The Süddeutsche Zeitung reported on Monday that around one-third of the German customers used anonymized numbered accounts, while around 200 used shell companies to do business with the bank.

Germans had a total of around €3.3 billion stashed away in HSBC's vaults, with the average deposit standing at more than €1.5 million.

But data published on the website of the International Consortium of Investigative Journalists (ICIJ) showed that the largest client at the bank had assets of around €1.75 billion.

Investigators have already checked through 1,136 of the clients unveiled by the leaks, but French authorities are believed to have almost 1,000 more names of people with links to Germany.

When they first checked the files, French investigators found that only six of the 3,000 accounts held by their citizens were reported to the tax authorities – a situation likely to be repeated in Germany.

While there are legitimate uses for Swiss bank accounts, the files have shown that many clients used the bank to stash money out of reach of the taxman, travelling to Switzerland to make cash withdrawals rather than make potentially traceable money transfers to their home countries.

Among the bank's worldwide clients were alleged weapons dealers, traders in blood diamonds and people close to Al-Qaeda.

Information about the bank's clients was passed to French authorities in 2008 by Hervé Falciani, a former IT worker at HSBC turned whistleblower.

He initially handed the bank details to French Finance Minister Christine Lagarde, meaning that it has often been referred to as the "Lagarde List".

But over 140 journalists from Le Monde, The Guardian, Süddeutsche Zeitung, ICIJ, and German broadcasters NDR and WDR have had access to the files since September 2014.

"The Swiss private bank of HSBC began a radical transformation in 2008, to protect its services from being exploited for tax avoidance or money laundering," HSBC Swiss branch boss Franco Morra said in a statement on Monday.

He added that 70 percent of the bank's accounts had been closed during this process, with none remaining open for American citizens since 2010.

By current estimates, more than €1 billion in taxes and fines could be collected in the twelve countries which currently have access to the files.

SEE ALSO: Bond meets Snowden: the HSBC whistleblower

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BANKING

Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Published: 13 February 2024 12:31 CET
Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

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