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Germany and France Join the Fight Against Tax Evasion

Following in the footsteps of the United States' concentrated efforts to bring tax dollars back into the appropriate government systems, German and French authorities have started their own crackdown on tax evaders.

German tax inspectors and prosecutors are in the process of investigating more than 5,000 different Credit Suisse clients who are suspected of tax evasion and, more specifically, of using Bermuda-based life-insurance products to avoid tax. Some taxpayers have had their homes searched.

French authorities, on the other hand, are still focusing their enforcement efforts on the financial institutions rather than their clients, by raiding the offices of UBS in Lyon, Bordeaux, and Strasbourg, as well as searching the private homes of several high-ranking UBS employees who are suspected of money-laundering and aiding in tax evasion.

As investigations of financial institutions continue to result in hefty fines, substantial record disclosure, and inquiries into criminal activity, taxpayers seeking the shelter of a foreign financial institution will have more trouble finding an institution willing to take the risk.

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