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Dutch led tax probes anger Swiss, Credit Suisse says cooperating


Credit Suisse (CSGN. S) has been dragged into yet another investigation into whether clients used the Swiss bank to evade taxes, after a tip-off to Dutch prosecutors about tens of thousands of suspect accounts triggered an international probe. Coordinated raids began on Thursday in the Netherlands, Britain, Germany, France and Australia, the Dutch office for financial crimes prosecution (FIOD) said, with two arrests confirmed so far. The Dutch are "investigating dozens of people who are suspected of tax fraud and money laundering", the prosecutors said, adding that suspects had deposited money in a Swiss bank without disclosing that to authorities. British tax authorities said they had also opened a criminal investigation into suspected tax evasion and money laundering by "a global financial institution" and would be focusing initially on "senior employees", along with an unspecified number of customers."The international reach of this investigation sends a clear message that there is no hiding place for those seeking to evade tax," Her Majesty's Revenue and Customs said in a statement. Neither the Dutch nor the British disclosed the name of the bank involved. However, Credit Suisse, Switzerland's second-biggest bank, said local authorities had visited its offices in Amsterdam, London and Paris "concerning client tax matters" and it was cooperating.

The Dutch FIOD seized administrative records as well as the contents of bank accounts, immovable property, jewelry, a luxury car, expensive paintings and a gold bar from houses in four Dutch towns and cities. The people arrested, one in The Hague and one in the town of Hoofddorp, were not identified. The actions angered Switzerland's Office of the Attorney General, which said it was "disconcerted" by the way Dutch authorities had handled the matter and would demand an explanation. FIOD spokeswoman Wietske Vissers referred questions about investigations in the other countries to their national police and to Eurojust, the European Union agency that coordinates cross-border prosecutions. Eurojust could not immediately be reached for comment. Credit Suisse shares were down 0.8 percent at 1122 GMT, a steeper fall than the 0.2 percent drop in the wider European banking sector index . SX7P.

OLD WOUNDS For Zurich-based Credit Suisse, the case reopens the thorny issue of tax evasion which has dogged Swiss banks for years after the world's wealthy used the country's strict bank secrecy laws to hide cash from the taxman. Credit Suisse has paid more than 2 billion Swiss francs ($2 billion) since 2011 in the United States, Germany and Italy to settle allegations it helped clients dodge taxes. It has pushed clients in Europe, Latin America and Asia to participate in government programs facilitating the declaration of untaxed assets.

The bank said in December this process had been completed for Europe. The Dutch FIOD said the coordinated raids were prompted by a tip-off about 55,000 suspect accounts of a Swiss bank, and it had passed information to the other countries about the accounts. Spokeswoman Vissers said the investigation would "continue for days and weeks" across the various countries. The Netherlands is investing 3,800 Dutch leads. Australia's minister for revenue and financial services, Kelly O'Dwyer, said the country's financial crime investigator was looking at 340 Australians linked to Swiss bank accounts, which she said were only identified by number."The fact that these accounts are unnamed," O’Dwyer said, "means that by their very nature they are likely to have been established to hide the identity of the owner."

Investors bet on a quiet tech revolution in Europe


It's not banking or mining shares, but rather technology stocks, that have come up trumps in Europe this year and are poised to end the first quarter as the best-performing sector. European tech companies often pale in comparison to the glamor of peers across the pond such as Facebook, Snap Inc and Amazon, and are dwarfed in terms of market value. The U.S. sector, at $4.3 trillion, is worth more than eight times Europe's. Investors, however, have been quietly buying into a European industry they see as being at the heart of disruptive digital developments across a slew of sectors. Tech stocks in Europe have risen nearly 12 percent in the first quarter, outstripping the broader market, which is up 4.8 percent, and also their performance in the first three months of last year when they fell 5.4 percent. Driverless cars, iris-scanning technology and augmented reality are just a handful of the themes at play globally in which European companies such as STMicroelectronics, Infineon Technologies and SAP are involved. Many European software firms are involved in corporate back-offices, keeping systems efficient and running - a less headline-grabbing side of the tech sector but one that can be important for companies across all industries looking to cut costs."Every consumer is exposed to Google, or Facebook, or Twitter ... something like SAP, which actually is in most corporations, is less visible to the end consumer," said Marcus Morris-Eyton, European equities portfolio manager at Allianz Global Investors. Tech now accounts for nearly a quarter of Morris-Eyton's portfolio, and SAP is his biggest position. AUTOMATION The mining sector was the standout performer in Europe over the course of 2016, gaining 61.9 percent, followed by oil stocks which rose 22.9 percent - far ahead of technology firm shares which were up 3.4 percent.

Banking stocks endured a turbulent first half, dragged down by problems in the Italian sector, but after hitting a low in July they rallied almost 47 percent to the end of the year. These trends were expected to continue into 2017, but so far banks are only up 4.6 percent in the first quarter, miners are up 6.2 percent and oil stocks are down more than 3 percent. Like many sectors, the commodities and financial industries have since last week been hit by investor concerns that U.S. President Donald Trump may not be able to deliver on all his tax and infrastructure pledges, after his healthcare plans were blocked. Tech is less exposed to immediate political and economic developments, according to analysts, and are more governed by long-term global trends in technologies such as automation, driverless cars and augmented reality."(In tech) there's always this level of innovation that keeps people engaged and keeps people investing for those opportunities almost irrespective of the economic cycle," said Steve Sherman, senior portfolio manager at BNP Paribas.

Flows into tech have been strong globally, with tech sector-focused funds seeing the biggest inflows year-to-date since 2009, according to data from Bank of America Merrill Lynch. Likewise Europe-listed robotics and automation exchange-traded fund (ETF) ROBO hit a new record high last week and saw record monthly inflows in February of $80.6 million. ABB and Krones are among its top 10 holdings. TIME OF FLIGHT The move toward digitization across industries has market participants particularly excited.

Morgan Stanley analysts highlighted SAP's S/4 HANA enterprise cloud software which helps integrate data and applications, and also its new product line for the "internet of things"