German customs confiscate documents shipped from Coutts Trust Company in Cayman
Customs officials in Hamburg, Germany, have confiscated two containers with thousands of offshore banking records that were shipped from the Cayman Islands, according to German media.
Sunday newspaper Welt am Sonntag reported the containers included 14,000 files in 1,000 boxes belonging to Coutts Trust Company in the Cayman Islands.
Customs officials seized the records under the guise of a drug search in late May from freighter EM Corfu arriving from Jamaica.
The German finance ministry confirmed to the newspaper that the seizure was in relation to a criminal investigation carried out by tax investigators in the German state of North Rhine-Westphalia under the order of the public prosecutor’s office in Duesseldorf.
It is believed that the investigation is related to a CD containing the records of German taxpayers suspected of tax evasion, which investigators in Duesseldorf acquired in 2013.
The disk allegedly included information about 1,200 German Coutts customers. Coutts, the private banking arm of Royal Bank of Scotland, does not have a branch or other presence in Germany.
Welt am Sonntag reported that the investigations proceeded slowly because apparently these records did not include customer names, and customers followed a “zebra” strategy of mixing legally declared and taxed accounts containing smaller amounts with undeclared accounts containing larger sums.
A spokesperson for Coutts confirmed to the Cayman Compass that, as part of a reorganization of the trust business, records were shipped from the Cayman Islands to be stored at other Coutts locations.
“We were winding down our office in Cayman and these documents were client files and other general paperwork from that office. Those documents were bundled up, securely packaged, shipped out of Cayman to Europe to be moved to various other Coutts offices,” he said.
He added that the bank is actively cooperating with German authorities.
Last year, Coutts sold a portion of its trust business in the Cayman Islands and Geneva to law and fiduciary firm Appleby. The Cayman Islands business became part of Appleby Trust (Cayman) Ltd. and operates from Appleby’s Cayman office. The book in Geneva became part of Appleby Trust in the Isle of Man.
Appleby said in a statement that the shipment of documents from Coutts’s residual business in Cayman had nothing to do with this transaction, and Appleby was not involved in the shipment.
The transaction followed the sale of the Coutts private banking business in Latin America, the Caribbean and Africa, with client assets worth more than US$2 billion to RBC Wealth Management. This included banking assets and operations in the Cayman Islands. However, the documents seized in Germany did not belong to the private banking business, the Coutts spokesperson confirmed.
German focus on tax evasion
Germany has seen a number of high profile tax evasion cases in recent years. Uli Hoeness, former manager and president of Bayern Munich football club, started his three-year prison term for tax evasion using undeclared Swiss bank accounts only last month. Klaus Zumwinkel, former CEO of the German Postal Service, faced a two-year suspended sentence in 2009 for tax evasion using a Liechtenstein foundation.
The initial investigation against Mr. Zumwinkel was based on a CD containing the records of German customers of LGT Bank in Liechtenstein, allegedly purchased for 4 million euros (US$5.4 million) by the German secret service Bundesnachrichtendienst from an employee or contractor at the bank.
Reports of seizures of bank records from Switzerland and Lichtenstein by German authorities have unsettled German taxpayers. About 60,000 Germans came forward last year and disclosed previously undeclared and untaxed foreign accounts.
A proposed German-Swiss tax deal designed to claw back unpaid taxes from Swiss bank accounts held by German taxpayers, while at the same time preserving the anonymity of the account holders, was blocked by Germany’s upper house of parliament late last year for being too lenient on tax evaders.