Analysts expect a further crackdown on banks and offshore tax havens after investigations were launched into employees and clients of Credit Suisse in Germany.
The German investigations will not affect the Swiss bank's Asian operations and are separate from its Asian business, said a Credit Suisse spokesperson.
Western governments' crackdown on offshore havens will benefit Asia in the short run as wealthy people transfer their assets. But it will have a negative long-term impact on the offshore businesses of Singapore and Hong Kong, said Hugo Williamson, managing director of the Risk Resolution Group, a UK risk consultancy.
German prosecutors are investigating employees of Credit Suisse and its subsidiaries Clariden Leu and Neue Aargauer Bank on suspicion of helping Germans evade taxes, reported Reuters.
The inquiry was launched in response to findings from Swiss bank data obtained by officials in the German state of Rhineland-Palatinate earlier this year, the prosecutor's office in the city of Koblenz said.
Clariden Leu has been managing offshore companies through Singapore and Hong Kong, said the International Consortium of Investigative Journalists (ICIJ), a US organisation that recently revealed the names of companies operating secretly in the British Virgin Islands (BVI) and other tax havens.
In Germany, the homes of Credit Suisse customers were raided by prosecutors this week, Bloomberg reported. Their investigation is reviewing whether Credit Suisse staff helped 201 customers evade German taxes.
A Credit Suisse spokesman said that the bank and financial services company maintained the highest standards in its activities and complied with all the rules and regulations.
"One of the principles in Credit Suisse's code of conduct is we do not assist clients in activities intended to breach tax obligations," he added.
Zurich-based Credit Suisse spokesman Marc Dosch said: "We have been advising German clients for a long time they should review their tax situation and resolve any issues where necessary. If this does not happen, we will terminate our relationship with these clients in the course of the year."
But Andrew Stimpson, an analyst at Keefe, Bruyette & Woods, said:"I won't be surprised if the German authorities continue with raids on Swiss banks in Germany."
The investigation would not have happened if the German government had successfully concluded a tax treaty with the Swiss government, said Stimpson. Last December, negotiations between the governments failed due to German political factors, he explained. The treaty would have required Swiss banks to collect taxes from German clients to pass them on to the German government.
"It's part of the German government's pressure on the Swiss government to provide tax information," said Williamson.
"It is not just Germany, it's Western governments. Many Western governments don't have much money. They need to recover funds. They need to win votes. One of the things a government wants to do from an electioneering perspective is to go after the banks.
"You are seeing a fundamental shift in the way Western governments view offshore tax havens."
In March, in the first US government sentence handed down to a foreign bank, the US Department of Justice ordered Wegelin & Co, a Swiss private bank, to pay US$58 million for conspiring with US taxpayers and others to hide US$1.5 billion in secret Swiss bank accounts.
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