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From Liechtenstein with love

Monday, 25th February 2008

This is a story that's got it all; spies, stolen bank details, whistleblowers, tax dodging and even a Royal Family. For the first time HMRC has penetrated the notoriously secretive world of banking in the tiny country of Liechtenstein, which is a renowned tax haven. It's done this by buying a DVD of information that a former bank worker took from the LGT Group - a bank owned by the country's Royal Family.

HMRC now plans to use the information against Britons who have been hiding money there to avoid paying tax. It is estimated this could net HMRC £100m in tax revenue that had been hidden away. Anyone found guilty faces fines of up to 100 percent of the money owed and could face up to seven years in prison. If the reports are right HMRC got at a bargain rate. Last week German spies paid £3.2m for similar information whereas the Sunday Times says our government paid just £100,000. Liechtenstein must be rather worried what this will do for other investors who rely on its discretion.

This story illustrates the extraordinary power wielded by HMRC, which basically bought stolen information off the black market and did it based on legislation that simply says:

"s.26 Rewards
The Commissioners may pay a reward to a person in return for a service which relates to a function of—
(a) the Commissioners, or
(b) an officer of Revenue and Customs."

I'd like to see other public bodies try and pull this off. Being a good hack, I went after the head of the Liechtenstein Royal Family to try and get an interview. I got a delightful email back, and had to admire the olde world style. This is an abridged version:

"Dear Mr. Millar,
After consultation, I unfortunately have to inform you that His Serene Highness Hereditary Prince Alois of Liechtenstein would like to refrain from an interview…
Thank you in advance for your kind understanding and for respecting the decision of His Serene Highness Hereditary Prince Alois of Liechtenstein.
Yours sincerely etc."

I wish I could officially be recognised as serene.