Flash News - France Invades Switzerland!

Bruce Krasting's picture


There are some interesting implications behind a story that is out this weekend. I found the details (that have come out so far) of interest.



The IRS of France, the National Directorate Of Tax Investigations (DNEF), has covertly sent agents into Switzerland to pursue tax evasion cases against French citizens. The Agents entered Switzerland claiming they were tourists. The Agents were not sightseeing in the Alps. They were doing what spies always do. They were covertly gathering information on enemies of France. In this case, the "enemies" are French citizens.


To be clear. This is 100% illegal activity in Switzerland.


Banking secrecy is still the law of the land in Switzerland. There have been several cases in the past few years where a Swiss bank employee has stolen information on private accounts. The lists of “names” were later sold to tax authorities in the US and Germany. Switzerland has vigorously prosecuted the individuals involved. Several have gone to jail; others are pending extradition and trial.


And now French government agents are breaking the same Swiss laws. The following thoughts come to my mind about this affair:


- How desperate are the French to do this? A covert operation in a foreign country? That’s over the top. If the French tax spies are doing this, what are the other arms of government doing? Are they spying as well? Listening in on phone calls to find out if the waiters are claiming their tips? How are the French going to react? Some, do doubt, with glee. Others, justifiably, with fear.



- I’m no fan of tax cheats. I have dozens of articles that have come down against banking secrecy, and the black money that is involved. But where do you draw the line? Illegal spying is, after all, illegal. Right?



- Is the DNFE alone in this type of activity? Does the US or the UK have illegal spies gathering information in foreign countries on their citizens?



- Does the French DNFE have spies in the USA?



- There are financial considerations to this. The first is the implications to the Swiss private bankers. The outlook for the Swiss banks was terrible before this development (UBS just hacked 10k heads – 2,500 in Switzerland), the outlook is worse again, after the revelation of state sponsored spying. I would not load up on Swiss bank stocks just yet. The fact is, without banking secrecy the Swiss banks are uncompetitive in wealth management.



- The second consideration is the possible implications on the Swiss National Bank. The SNB has been pegging its currency for more than a year now. In the process, it has accumulated 100’s of billions of Euro reserves. To hedge its bets, the SNB sold off those unwanted Euros and bought dollars, Yen, Sterling, Hong Kong and Singapore dollars. Basically, the SNB has been mucking up the entire global financial system in an effort to keep global economic problems from spilling over its borders.


There is going to be a pissing match between France and Switzerland over this story (there has to be). When the cross-border shouting starts, someone in France is going to point at Switzerland and claim it is a Currency Manipulator that is hurting France (it is). This scenario is one that will bring big pressure on the Franc, and another test of the SNB’s resolve to maintain the peg.



- The SNB had billions of excess Euros as a result of intervention. It bought German Bunds with the cash. In the process, the SNB pushed German rates below zero. This forced the SNB to diversify, and buy French government bonds. So now the SNB is sitting on a huge pile of French paper. And the French are spying on the country. I’m wondering if the SNB is so happy with all those French IOU’s it is sitting on.



- Eveline Widmer-Schlumpf is the President of Switzerland, she also is the Finance Minister; so she is very much on the hot spot. The Swiss will hate the idea of French spies acting covertly in their country and breaking the law (who wouldn’t?). Eveline can't soft peddle the French spying. There has to be a next chapter to this story. I can't wait.



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are we there yet's picture

 When any nation extends its internal laws beyond its borders to non consenting countries, then it violates an other countries sovereignty.  That is what borders and sovereignty are. Exceptions are where international agreement exists, such as piracy, human and drug trafficking.

A humorous bit of history.  Nearly 300 or so years ago England made virtually all maps and had a conflict with the south American landlocked country of Paraguay.  So England passed a law that all British mapmakers had to omit the country Paraguay from all maps produced and sold worldwide to punish Paraguay. There was just a blank. No rivers, mountains, cities, roads.

andrewp111's picture

I remember when the French sent assassins to Australia to sink the Rainbow Warrior, and were so cocky and arrogant they got caught in Australia a couple of days later. A fellow Socialist President by the name of Mitterand ordered that operation. Why wouldn't Hollande send hot French babes into Switzerland to seduce bankers and find more money to tax? France is desperate for tax revenue right now.

Orly's picture

The answer is very, very simple.: the Czech chicks that are already there are twelve times hotter than anything ever produced from France.


dunce's picture

The only ones they will catch will be those that they already had enough evidence on to proceed. This is just a scam to get paid vacations in the winter at ski resorts while obstensibly tracking down cheaters. For some reason never explained to me nearly the whole country shuts down in the summer, it might be a breeding season. The summer is a paid vacation , but with this scheme ,they can get another paid vacation that will include overtime because they will often be there diligently impersonating and observing the rich on weekends plus all expenses will be paid, hotel, bar tab, lift tickets, car rental, and restaurant bills. Good work if you can get it, and you can get it when you work for the government. Remember our GSA scandal in Las Vegas.

Orly's picture

Now we're getting somewhere, dunce.  One giant sham that means absolutely nothing.

And I can't believe people are so hung up on such nothingness...

but that's just me.


Thee Barbarous Relic's picture

I passed a law that says people like Orly can suck it 70 percent of the time

User 3461's picture

They never question why people cheat on taxes. What's that guys name...Laffer.

otto skorzeny's picture

no fan of tax cheats? i empathize with them more than I do bank robbers.

Yes We Can. But Lets Not.'s picture

Privacy and secrecy are so 20th C.

THE DORK OF CORK's picture

The rural heartland of France is under threat.............




Very large decreases in Corail passenger numbers over the past few years........people with less money travelled on these comfortable carriages rather then TGV services....now these people have no money.


 Le Cevenol is next for the chop simply because people don't have Francs in their pocket......i.e. its not really a question of resourses





Gamma735's picture

France ought to go ahead and surrender to Germany.   Germany = Dom.  France = sub.  Kinky sex makes the world go around.

Coldfire's picture

Switzerland lost its privacy cherry by collaborating with the IRSS. It's all over now except for the shouting. Singapore and Hong Kong say "thanks".

old naughty's picture

Hong Kong?

Would you repeat that, please?

Isn't that a SAR of China.


michigan independant's picture

The Swiss can handle this the old fashion way. A boot in the ass as they tell then, and not ask them to leave. Sooner or later the Voters will awaken from the slumber. Until then we can Vote with our pocket book.


MFLTucson's picture

Line them up and shot them.  When that is complted, do the same to the American IRS that has no business in your country.  This is bullshit of the highest order but, typical of scumbag politicians.

are we there yet's picture

Skyfall spy movie is released at the right time.
Question: were the French spies hot curvaceous female fem faitails, or male french tax accountants. If the former, Bloomberg should refocus the story for the sheeple.

Orly's picture

Lots of great movies out now.  Skyfall, Flight, Lincoln, Holy Motors, Wreck-it-Ralph...

Daniel Craig is the James Bond.


are we there yet's picture

Abraham Lincoln's wife was a shopaholic and spent so much on credit that it literally took an act of congress to pay off her bills. 

akak's picture

"Lincoln" may be a great movie, but the subject (not to mention the statist worship of the tyrant) is so irredeemably vile that I refuse to subject myself to further pro-state propagandizing and worship of the man.

Orly's picture

I'm with you but I haven't seen it yet.  The perspective is supposed to be from the political side- the manouevering and that- of his positions, all the while, his wife is going crazy and his world is falling about around his large ears.  I can relate to that, so it sounds interesting to me.

I just hope it is not as soppy as Spielberg's other films and more in the line of Schindler's List than Saving Private Ryan.

otto skorzeny's picture

If it is a Spielberg film then I am sure Lincoln is Jewish and the American Civil War was fought to free the Jews from the Nazis.

are we there yet's picture

Lincoln ... didn't he free the vampires or hunt slaves or something??

graneros's picture

OK, you say it's a great movie but you haven't seen it yet????  I think I've read some of your book reviews on Amazon.

Orly's picture

MSN, actually.  Either way, the film is getting thumbs up all around.

Besides, what I meant to stress is that Daniel Craig is the James Bond.


BearOfNH's picture

MSN, actually.  Either way, the film is getting thumbs up all around.

If the reviews are all from MSN then "all around" translates to "left and lefter". As a rule, in the USA the left is more statist than the right. All those welfare programs need a strong central thuggermint.

In any event I hope it's a good movie, not another variant of ET.

otto skorzeny's picture

Skyfall-ok. Goldfinger-The Shit.

akak's picture

Learn to read before commenting.

Orly agreed with me that "Lincoln" MAY be a great movie, as neither of us have seen it yet, and therefore cannot say that it IS a great movie.

You do understand the difference between the conditional and the declarative, yes?

TraderTimm's picture

This is why I prefer the "Bank of One" that is bitcoin.

You need my account? Sure, let me give you a wallet that will be emptied in the next hour while you drive it over to your field office.

Nothing like the look on their faces when they discover the balance is now 0.00, and my newly created wallet is brimming with my BTC.


QQQBall's picture

This troll just hijacks threads. Ignore him and he will eventually get the message

Orly's picture

Am I the "troll" you were referring to?

If so, then there seems to me to be a lot more discussion about what I say than what you have said so far, NazBall.  It's called "food for thought," but your brain must not be very hungry.  Perhaps if we all just preached to the choir, reinforced everything you wanted to hear then things would be more interesting?

I'll shut up when I am asked to, believe me.


Orly's picture

Of course, the humourous irony to all the Orly-bashing is that they will defend the rights of banksters to steal under the dark of night the capital that rightly belongs in their own country, even according to their own banking laws.  I suppose it is because if it were them with millions stashed tax-free in a foreign country, they wouldn't want to their sovereign to find out, either!

It is ironic that the fancy-themselves Libertarians with nary a pot to piss in would defend the very people they trash here in these pages on a daily basis, all on the pretext of the right to privacy or some such nonsense, as everyone should have the right to hide their money from anyone they choose anywhere in the world.  Ah, if they were the ones with the secret Swiss bank accounts...but don't dare follow me around Rome!  Ha!

So you see, either way you crust the argument, my positions are unassailable.

Think about it.


Sean7k's picture

Orly bashing? Because someone would deign to disagree with so august a presence? Then, let's attempt to paint them with the propaganda brush as banker sycophants, because we don't want to look at your pathetic arguments too closely.

I have never identified my arguments as libertarian nor my income level, this is about the violation of another nation's laws. When you disrespect the law there, it shows up at home. 

Your positions are not only assailable, but have been overrun and left in tatters. Every reader has thought about it and the scores are quite clear. 

Poor Orly! Take your defense of fascism and governmantal abuse and stick it, presumably when you are in one of your positions.

Orly's picture

Okay, Sean, next time you go around bashing the "banksters" for getting away with murder while you have to pay their taxes, you remember this thread.

Governmental abuse?  So the Swiss have some sacred right to secrecy that the French don't?  Where is that written?  How is it possible?

All the same, it was very nice arguing with you but please understand there is no need for name-calling and personal attacks.  Enjoy your evening.


Sean7k's picture

Orly, when you want to talk FX, fine, but you are way out of your element here. There are many ways to call names, some more subtle than others, but they are bashing all the same. The bashing of bankers has nothing to do with taxes- it has to do with government capture. 

Taxes are a result of legislation written by those same bankers for their benefit. That is the problem with government, it is susceptible to capture by the wealthy. To complain would mean I am too naive to understand how power and influence are used.

The Swiss have the rights that are written into their Constitution. The French have theirs. That is why one group may have some that another doesn't. It is called a social contract and it defines your relationship with the State.

Instead of defending poor positions, you might want to take the opportunity to learn. There is a time to listen and a time to hunker down. Good nite. 


Orly's picture

Okay, man.  Out of my element...


Well, I'll just say that it looks like the USDJPY is in for a major ramp here and leave it at that.

I guess we'll see who is right in this argument in about six months when the Swiss drop everything to the French and pretend this whole thing never happened.  Same with the pending charges against the Germans.

Six months?  No this is the 1990's...six weeks, yo!

After the USDJPY ramp, be prepared to sell AUDUSD hard and for good, to 0.80.

I trust you'll let me know when I were wrong.


ThirdWorldDude's picture

Personally, I'm bashing you because you're putting the state before the citizens. The capital rightly belongs to the people who earned it and no bankrupt politician (getting payed by those same taxes, btw) has the right to impose 75% taxes on it, only because those same corrupt crooks refuse to reduce their size and salary!


Have you heard the phrase "voting with your feet?

Orly's picture

Voting with your feet does not entail skirting the law for your benefit.  When was the last time you didn't pay your taxes?  I am not putting the state before the citizens.  I am putting the citizen responsible for paying his taxes.  You try it next year and see what happens.

So if there were a law passed tomorrow that any money you make from here on out would be taxed at 70%, what would you do, stop working?  If so, then you're a strong one.  Most wouldn't.  Most would continue to work and then, by right of law, be subject to the 70% tax.

Now you say, well, they earned that money and the government has no right to take it.  If it is the law in their country or respective jurisdiction, then they would be subject to those laws whether they were in France or Germany or Switzerland.  It is against the law to move money to another jurisdiction for relief from taxation.  The government has a right to know who is doing this and also has a right to stop it and recoup what is "rightly" theirs.

I just don't see how people can come on these boards and trash the banksters, then defend their right to skirt taxation laws.  It just blows my mind.  Only one word is apt for this kind of thought and that is "hypocrite."  Make up your minds: are the banksters making off with billions or do you defend their right to privacy?  If you defend their right to privacy, then it is you and yours that has to make up the difference in taxation.  Alors, don't complain about the banksters making off with billions!  Cheer them instead at the docks as they leave with very, very heavy suitcases.

Sean7k's picture

The problem is your defense of the law. You want to defend it in one instance and violate it in the next. Your argument has zero consistency. Second, running money through offshore accounts is not necessarily illegal. Ask Apple. 

You know nothing of the situations, yet you argue for a draconian and ILLEGAL action. You want the law, but then you want to skirt it. As if the government gets to DECIDE when it follows the law. If the government doesn't follow the law, why should we? 

Law is nothing but a tool for the subjugation of us all. If they want a 70% tax, guess what? I'm going to do everything I can to limit it's effects. Don't like it? Tough. I don't care for robbery. 

The tree of liberty must be watered with the blood of tyrants. There are quite a few governmental and corporate tyrants that could use the feel of hemp around their necks.

Itch's picture

Orly arguing with a libertard is like entering the special olympics...even if you win, you're still a spastic.

ThirdWorldDude's picture

"It is against the law to move money to another jurisdiction for relief from taxation.  The government has a right to know who is doing this and also has a right to stop it and recoup what is "rightly" theirs."


Go tell that to the corporations (crAPPL comes to mind) moving money to off-shore tax havens so they can avoid "excess taxation"... And define "rightly" theirs.


If I pay 70% of my income in taxes and the services I get in return (infrastructure maintenance, education, healthcare) are not satisfactory, I won't stop working (perhaps I would if I was 'Merican, but over here I don't qualify for an EBT card). I'll vote with my feet!

magpie's picture

I don't see why it is so hard to understand that you can only enforce your laws in your country, if you do not have any other agreements.

Oldwood's picture

Its an odd thing that we live in a time where a person can choose to have multi illegitimate children that all of us are forced to pay for, but we cannot make moral judgements about this person. At the same time a person who earns money completely legally but attempts to avoid taxation is morally bad. I understand that having children that are tax dependants is completely legal and tax avoidance is not. I just question the morality of both. 

PontifexMaximus's picture

This is a complete nobrainer story. The weekend press, also the german speaking one, not only the one(s) in the lémanic area was writing about it. Boring, as the US elections were making everzbody and his dog yawning. Dear Mr. B. Kastin, enjoy your stay in CH snd do not firget to make trip to the german speaking parts of CH. Then your writing would be slightly more accurate.

RazvanM's picture

The omnipotent US spying on everybody is just an act of a good friend. "They hate us for our freedoms!"

Reptil's picture

If true, this is going to rub completely the wrong way. Swiss are very lenient, as long as they'll retail their space.

Strange and stupid of the french. Arrogant, as is to be expected, of their ruling class, germans wouldn't dare.

malikai's picture

Personally, I think attempting to control the flow of capital is a very bad thing. It is not a winnable war; it is a war against nature. Black money or not, capital goes where it wants to go and attempting to control this simply leads to tyrannical behaviour such as what the French are doing. And I'll venture to say that others will do the same.

This shit is not compatible with a free society.

Peter Pan's picture

The Swiss can always pull the plug on the Euro and state that they no longer have confidence in it. They then grant citizenship to those pursued. That ought to send the French spies back home.