Sneaky Germans may have found several ways to dodge the law on how to bring in foreign currency in the country from abroad, but border authorities usually detect the smuggling attempts.
The AUDEUR rate jumped this morning in reaction and we would expect trading to be very volatile over the next few days as this crisis plays out.
The surreptitious manner of bringing foreign currency unnoticed, which is also done in other countries, is the result of Swiss banks being targeted by an international campaign against tax evasion. Although about 36,000 Germans who are also owners of Swiss bank accounts, once known for their secrecy, had sought amnesty for their undeclared wealth stashed abroad, those who failed to declare them and attempted, but were caught bringing in foreign money worth more than 10,000 euro at the German border, faced legal action.
Bloomberg reports the different methods uncovered by German customs authority that citizens use to smuggle money.
Markus Ueckert, spokesman of the German customs district of Loerrach, cited a 72-year-old man who wore a woman's corset with 150,000 euro inside. Another incident involved a man who put on two adult diapers with 140,000 in between the two incontinence nappies.
Authorities estimate that non-resident Germans and Britons possibly held 164 billion francs of undeclared fund in 2010. About 36,000 requests for tax amnesty were filed in Germany.
The tightened borders led to the burning of 20 million euro of undeclared cash in 2011, 2 million of which were found hidden insider a gingerbread house made up of 25,000 euro notes.
Other hiding places that were eventually uncovered by border authorities include inside shoes, by the car battery, inside secret money belt or in the underwear.
The entry of money stashed abroad and the fund probably being part of tax evasion is a hot campaign topic for Germany's Sept 22 election when Chancellor Angela Merkel, the world's most powerful woman, runs against Peer Steinbrueck.
Although Switzerland has negotiated withholding tax agreements with the UK and Austria that allowed the two EU nations to recover tax revenue and preserve secrecy of the accounts, Germany rejected a similar deal due to the Bundestag's opposition.
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