The German Constitutional Court approved the law on state control over bank accounts of German citizens. As Gazeta.Ru reports, the state will now gain access to information about residents' bank accounts, if necessary, in quite detailed form.
The Federal Constitutional Court of Germany ruled that on April 1 the law on state control over bank accounts of German citizens comes into force. The court overturned a temporary ruling on the illegality of state authorities demanding data on bank accounts and deposits. The state gains access to information about residents' bank accounts, if necessary, in sufficient detail. According to experts, the new law will sharply stimulate capital flight.
The Bundestag first began talking about the impossibility of doing without control over bank accounts after the terrorist attack of September 11, 2001, in the United States. The main reason was the need to combat terrorist financing and money laundering. But when legislators realized that the draft law provided broad opportunities to fight other crimes as well, primarily tax evasion, their eyes lit up, and they set about developing it with triple zeal.
The adoption of the law was delayed by the tax amnesty that came into force in December 2003, as well as by citizens' protests over the erosion of the very idea of bank secrecy. They initiated the adoption of the temporary ruling on the illegality of the state's demand for data on bank accounts, which the court overturned yesterday. The court has not yet ruled on another complaint about the unconstitutionality of the new law; moreover, its consideration may take several more months. Nevertheless, the latest decision of the Federal Constitutional Court is not retroactive.
Starting April 1, the law enables various state bodies to obtain information about an account holder, such as, for example, first name, last name, date of birth, address, as well as the number of various bank accounts and authorized representatives. Information about the account balance and the flow of funds is, as a rule, not included in the list of information accessible to the state. Starting March 23, German banks and savings banks are required to transmit data on account holders to a special agency – KEZ.
The new thing is primarily that now not only law enforcement agencies, but also quite peaceful financial and social departments and employment agencies have access to the financial situation of Germans. True, according to Der Spiegel, their request must be “clearly motivated.” The Constitutional Court emphasized that the justification must be convincing and targeted. The request must concern specific individuals and will not be considered justified if the desired information can be obtained by other, less intrusive means that spare the self-esteem of a free citizen. According to Der Spiegel, citizens are to be informed, at least retrospectively, that their accounts were of interest. So one cannot rule out subsequent appeals to court regarding the illegality of requests.
In addition, according to the Frankfurter Allgemeine Zeitung, the new law grants the federal financial supervisory authority Bafin the right to examine data located on computers of every German financial institution. True, also within the basic information about the account holder. Banks and savings banks are obliged, starting April 1, to provide this authority with the opportunity to monitor them online. Thus, it will be possible to quickly determine who has which account where, and neither the account holder nor the bank will notice that this has happened. “The very idea of bank secrecy is being undermined! Bank customers are being turned into glass people,” says Hermann Burbaum, head of Volksbank.
Moreover, if the obtained data confirms financiers’ confidence that the account holder is hiding income, they have the right to demand from the bank information about the status of this account. Again, without the client’s knowledge.
Nevertheless, according to the German tax officials’ union, despite all these measures, the new law is unlikely to significantly reduce the number of debtors to the budget. “Malicious concealers of income have accounts not in Germany but abroad,” Dieter Ondracek, chairman of the tax union, is certain. “The situation is difficult to change even with the help of information exchange in a united Europe, because, as luck would have it, Switzerland, Luxembourg and Austria do not participate in the relevant agreements.”
At the same time, the overwhelming majority of Germans are confident that the new rules will spur capital flight from Germany even more strongly. According to Manager Magazin, this is the opinion of three-quarters of private depositors in German banks.