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Discussion point XVIII

Did the United Kingdom commit an act of war upon the sovereign nation of Lichtenstein?

Discuss.

45 comments to Discussion point XVIII

  • The UK did not, either in a de facto or de jure sense, commit an act of war against Liechtenstein. It simply bought data, belonging to a private bank, that was useful to it. That this data was apparently stolen, in an act that must make private bankers the world over shudder in fear, is not particularly the Government’s concern. Since the purchase did not involve the Government of Liechtenstein nor act contrary to any international law as we know it, it seems unlikely one can claim the purchase was an act of war.

    That said, that doesn’t mean the UK’s clean reputation won’t take a hit. (It’s acting like the United States, for Pete’s sake). Nor will it excuse H.M.’s Government for acting like right bastards and turning the thumbscrews tight on the Liechtensteiners. Legal niceties aside, the House of Liechtenstein owns the private bank affected and thus the UK’s actions are certainly — and knowingly — unfriendly to the principality.

    As odd as it might seem, when nations take unfriendly actions against others, those other nations tend to find ways to reciprocate. Since Liechtenstein is the size of a postage stamp and its police would have trouble quelling a fight in a beer hall, it seems unlikely they will act publicly. But I don’t doubt they could, if they wanted, make things rather annoying for German or British nationals in Liechtenstein.

    Furthermore, given the financial resources at their disposal, they may have other weapons in their arsenal their larger neighbors may not have considered. They may well decide they’ll strike back once this blows over — at a time and place of their own choosing.

  • Bruce Hoult

    I don’t doubt they could, if they wanted, make things rather annoying for German or British nationals in Liechtenstein.

    Isn’t that precisely the kind of result that the British and German governments would just love?

  • Benjamin:

    That this data was apparently stolen, in an act that must make private bankers the world over shudder in fear, is not particularly the Government’s concern.

    Is knowingly buying stolen property not the same as stealing? What if the British government actually sent someone to steal from that bank? Also, is theft different from murder in such a case?

  • Sunfish

    But I don’t doubt they could, if they wanted, make things rather annoying for German or British nationals in Liechtenstein.

    Isn’t that precisely the kind of result that the British and German governments would just love?

    That depends. Which nationals are being annoyed?

    Some tourist might get glossed over. On the other hand, the following conversation between an imaginary traffic cop and an imaginary diplomat took place only in my imagination but I’m not going to call it impossible:

    “Sir, step out of the car.”

    “I’m an employee of the British government with the embassy.”

    “That’s ni- HANDS OUTSIDE YOUR POCKETS NOW!”

    “I have diplomatic immunity!”

    “And you’re only being briefly detained until I confirm that. Turn around and put your hands behind your head…”

    ..which would cause no end of grief between the two governments, but you just know that the idea has crossed someone’s mind, somewhere.

    Also, if the bank in question is truly owned by the principality, then I shudder to think of what sorts of embarassing details about British officials might be reconstructed from bank records and turned over to newspaper gossip columnists.

  • No, it is daft to call it an act of war. It was a criminal act however, abetting the theft of property in Lichtenstein

  • This is clear cut. Handling stolen goods is a crime, and UK/Germany should be sued by Lichtenstein.

    But then again, is not accepting bank deposits from tax dodgers also effectively handling stolen goods, so perhaps UK/Germany should sue Lichtenstein in return.

    We don’t need a regiment of soldiers to sort this out we need a regiment of lawyers.

  • John: dodged taxes are stolen goods? Stolen from whom?

  • Jacob

    In the past such matters were treated with discretion, i.e. the British gov (and all governments) was, and should be, spying on all foreign nations, and getting the info it needs by all means possible. Stealing and paying spies to steal are the normal procedures.

    All these methods, while well known, aren’t mentioned in polite society, at least not the specific details.

    What was different this time was the publicity. I don’t know who is to blame, maybe it was some stupid error.

  • Mark Sparrow

    How can any court in the UK convict someone of handling stolen goods after this affair? There is a concerted effort by the USA, UK and all the other OECD bigwigs to stop “Harmful Tax Practices”. In effect, the OECD is trying to instigate a tax cartel so that there is no way individuals can mitigate their tax bills. If the developed nations simply confiscate all income that would solve the problem. The concept of private property is fast disappearing now that we no longer have the threat of Soviet communism to keep the excess of Western states in check. I blame Richard Murphy!

  • The british government should be, and is, spying on foreign states. Does a private institution (albeit owned in part by the ruling family) count as a state? I don’t think it does. Acts of war, as I understand them, can only be perpetrated against a state, against anyone else they are simply a crime AFAICS.
    How many politicians have overseas bank accounts? How many members of the house of lords have a nest egg ferreted away in some tax haven somewhere? Liechtenstein could make powerful people very uncomfortable, and I believe they should. However I don’t think this is something to get too bellicose about.

  • Jacob

    The british government should be, and is, spying on foreign states.

    On foreign whatever. States, organizations, individuals…

    If a British government official had bought stolen records of a British bank – he would be guilty theft. I’m no lawyer, but I think so.
    Can the Lichtenstein bank lodge a criminal complaint in a British court agains this act ? If not – why not ? If yes – why don’t they ?

    Secondly: evidence obtained by illegal means is unacceptable in court (as far as I know). So what good does this evidence serve the HMRC ?

  • Liechtenstein refused to sign a peace treaty at the end of the Austro-Prussian war of 1866, and so is technically still at war with Germany (as the successor state of Prussia). The British have no excuse though.

  • Jim

    Yes, stolen evidence is inadmissable in a court of law – unless the outfit writing the laws decides that this evidence IS admissable.

    And as HM Gov’t clearly views themselves as the wronged party in this matter, AND tax revenues are at-stake, AND no government seems to have a problem with either changing the rules in mid-game or declaring “Do As I Say, Not As I Do” to its citizens, what are the odds?

    My personal philosophy is that every citizen has a moral duty to cheat the government on taxes – after all, they never cheat us: they just write another law.

  • “But then again, is not accepting bank deposits from tax dodgers also effectively handling stolen goods, so perhaps UK/Germany should sue Lichtenstein in return.”

    It is not the responsibility of one sovereign nation to enforce the laws of another. Else the most draconian laws could be applied everywhere.

  • To Bruce: The level of retaliation Liechtenstein could take does not have to rise to the level of an international incident. For instance, UK-based companies domiciled in Liechtenstein could find the tax inspectors were sent ’round to conduct audits. Unfortunate; expensive; but it’s not enough to warrant the HM’s Government getting involved with it. Sunfish’s example is also a possibility, although I think a more likely scenario would be for Liechtenstein to be notably unhelpful in situations where its cooperation would be of great assistance.

    To Alisa: The answer to your first question is “Yes, but.” Certainly the act of knowingly buying stolen property is morally wrong, and if it is not the same as stealing it is certainly in the same ballpark. But one could argue that since HM’s Government did not actively send an agent to procure the data, and as such came into possession of it indirectly, that it is not the same as actually stealing it. Still, my point in making the argument was not to excuse the UK Government for its action, which was just not cricket. Even the United States, which is notoriously ruthless in these types of affairs, did not pay for the data now in its possession.

    As for the difference between theft and murder, murder is ALWAYS different. Murder, at least where I live, can lead to the ultimate punishment; theft will get you 15 years at most. Also, with theft, the wronged party has recourse to get what was stolen from him back. There is no recourse when you’re six feet underground.

    To Sunfish: The House of Liechtenstein very much owns the LGT Group, the private wealth-management firm whose data was affected in the breach. I do wonder, though, how many UK officials would have slush funds in the principality; one would think they would try the Bahamas, the Caymans, or other off-shore banking center with historic ties to the UK.

  • It is called “receiving” the British government is knowingly in receipt of stolen good.The British Government has become a “Fence”.

  • RAB

    Yes it is indeed committing a crime in receiving stolen goods.
    Evidence so gathered is inadmissable in Court.
    But then it would never get to court. The Revenuers dont work that way.They make Al Capone look like a bumbling amateur.
    Benjamin. What happened to Wilson and Betty? ;-)

  • Paul Marks

    I agree that it was a criminal act (knowingly paying for stolen goods) not an act of war. I suppose the “good” side of that is that the criminal regime here is expossed as what it is.

    However, the British government ought to be careful if it is planning any war of aggression against Liechtenstien.

    At the end of World War II both the British government and that of Liechtenstien recieved threats from the Soviets to return nationals who did not want to return (about 500 such nationals had managed to make to Liechtenstien).

    The British government caved in – forcing men, women and children back with lies, and when those lies failed, at gunpoint (attacking them in the camps they were held in several countries). As for the fate of these people – the ones who died quickly were the lucky ones.

    The government of Liechtenstien refused to be dishonourable – and told the Soviets to do their worst.

    The Soviets did nothing.

    Prime Minister Brown may be called “Stalin” – but the people of Liechtenshien faced down the real Stalin.

  • a.sommer

    No.

    The British government may have committed an act of espionage against Liechtenstein, but not an act of war.

    Of course, this is largely because the government of Liechtenstein is not about to declare war on Britain over this. A government can declare war on another government for whatever reason it wishes, or none at all.

  • Ian B

    Wouldn’t it be more an act of piracy?

  • Johnathan Pearce

    I don’t think this is an act of war, but it is certainly bad and stupid. Also, if the British government had been a private body, the directors of it would be liable for criminal conviction over the use of illegally obtained property. Taxation is a form of legalised theft; it adds insult to injury to use stolen information to continue looting individuals even more.

    Separately, this issue highlights the desperation of the western tax authorities to shut down tax havens as a way of preventing people from fleeing their high-tax shores. Whether such roughhouse tactics will work on the likes of Switzerland etc, remains to be seen.

  • Knowingly receiving stolen goods is theft, even if the goods were not paid for. It is a federal crime in the US, and probably in the EU as well (?). Now, realistically, of course there is no doubt that this is not an act of war, not by modern international law standards, if I understand correctly. By these standards, neither is a murder of a person by a foreign government agent. But it seems to me that traditionally it was. And BTW Benjamin, this is Europe we are talking about, and they have no death penalty. In short, what I am wondering about is: if this happened in the old days, when wars were Europe’s pastime, and it was a tiny nation like Liechtenstein that received stolen property from a bank owned by a big and powerful nation like the UK, would that big and powerful nation have made a point of making an example out of Liechtenstein?

  • “Of course, this is largely because the government of Liechtenstein is not about to declare war on Britain over this.”

    Well, now is the time to do it,NuLabor has spread the Army all over the globe and tha Navy is being repaired.They could avoid the Airforce by getting a day return by Eurostar.

  • Ian B

    What if Lichtenstein said “the data in the hands of the UK government is known by us to contain errors, and no, you’re not seeing the original”. Would that make it impossible for the UK guv to act upon the infomation they’ve obtained?

  • “I have diplomatic immunity!”

    It’s just been revoked.

  • a.sommer

    Taxation is a form of legalised theft;

    This is something I’ve been having trouble really understanding for a while now.

    Not the ‘I don’t like paying taxes’ part, that’s obvious enough.

    What I’m having trouble with is figuring out how the big-L types expect a government to pay for the various services that it’s citizens are going to expect it to deliver. At a bare minimum, that’s going to include keeping other governments from deciding you need them to ‘manage’ your affairs, and that will cost money. If taxes are theft, and therefore do not exist in Libertopia, where does the cash come from?

  • Mark Sparrow

    Tax isn’t theft but high and unjust taxes are theft.

    “What I’m having trouble with is figuring out how the big-L types expect a government to pay for the various services that it’s citizens are going to expect it to deliver.”

    We expect it to deliver services but not propaganda or gerrymandered votes via a bloated public payroll. Profligate governments hate tax havens because they undermine their own taxation policies which are tantamount to theft. Even if the OECD could banish the few remaining tax havens via trade sanctions imposed by the USA, they’]d probably then want those countries to raise their taxes to the same level. After all, we can’t have prudent low spending nations showing up the bloated menace that is the EU, can we?

  • I think Ian B is onto something; the Lichtenstein government should simply utilise any means necessary to punch holes in the veracity of the document, so that any lawyer (especially of the breed the deep-pocketed targets of this roust tend to employ) could effortlessly establish reasonable doubt if these cases ever went to trial. Which, of course, they wouldn’t – they’d be dropped under advice from the Attorney General.

    The ensuing PR disaster would guarantee that this stunt was never repeated by HM Revenue & Customs.

  • Anomenat

    My lawyer friends (one of whom previously worked for the civil service) assure me that this evidence would never be used in a UK court. It would be used by HMRC to identify those people that it might be profitable to investigate more thoroughly.

    The great problem with the whole scheme is that the data is out of date (it is from 2002) and comes from a convicted fraudster. It is highly likely to contain errors or fabrications and even the accurate bits probably aren’t still accurate today.

    This seems like a complete waste of money and certainly not worth angering Lichtenstein over.

  • Paul Marks

    a.sommer.

    Who says that J.P. is in favour of all these services that the government tries to provide?

    Majority consent is not the same thing as individual consent – there is a dishonest jump between the two in John Locke’s work (this was pointed out as long ago as the 1930′s by Gough at Oxford)

    Tax may not be theft but it is extortion – “give me your money or I will take it by force and throw you in jail”.

    “You hypocrite, you accept pay from money taken by taxation”.

    I was talking about J.P. – not me.

    However, yes, I get money from the taxpayer.

    Just over four thousand Pounds a year – a lot of which gets taken by the poltical party I belong to (this was a condition of being elected).

    I doubt that money of this level will delay my death by a day – but, yes, it is a bad thing to take the money.

  • Paul Marks

    By the way the money is taxed as well.

    “What is the point of taxing money that has been provided by taxation in the first place”.

    Actually this insanity is quite normal in the modern world.

    As with the money I earned as a security guard (when it was legal for me to be one in Britain) the income is supposdely below the “income tax threshold” but it is taxed anyway.

    One is supposed to “claim the tax back” and so on (by filling in various forms). But most people on low pay consider this sort of thing a sick joke – I know I always did.

  • To Alisa: It is certainly possible, in a different era, that had the tables been reversed Britain would be cheerfully applying the thumbscrews to Liechtenstein. But if I recall rightly, the tax systems in place prior to World War II were a bit more lenient than they are now, so perhaps this issue might not carry the import it has today.

    To all: I am unfamiliar with how exactly the Inland Revenue goes about its work, but even if the data provided to it was incorrect, would the burden of proof fall on the Inland Revenue or the taxpayer? Up until a few years ago in America, the taxpayer had to prove he was in the right if the IRS felt he had underpaid tax. Is that the case in the UK, or must the Inland Revenue prove conclusively the taxpayer is in the wrong before dunning them for additional tax?

    Some here have mentioned that the data wouldn’t stand up in a court of law. Must it have to go to court for Inland Revenue to dun taxpayers? It would seem to me that although a taxpayer could go to court in an attempt to clear his name, this is something that could only be accomplished after a great deal of expense and emotional trauma.

  • Mark

    Yes… guilty until proven innocent. I think that’s the way all tax authorities work. Try to choke off governments’ money and they fight like tigers. It’s the only time the sclerotic public sector can actually work… that and traffic wardens. I wonder what happened in the old days as regards putting money offshore. It’s only modern communications and closer co-operation between tax authorities that have mad e it possible for governments to track down cash.

  • I wonder what happened in the old days as regards putting money offshore.

    Ask the Swiss.

    Benjamin: it need not be about tax. Anyway, times certainly have changed.

  • Tim

    Firstly, HMRC have broken UK law by buying stolen goods. It matter not that the information is on something they believe is stolen from them. Handling of stolen goods is handling of stolen goods.

    Now, here in the UK we have a government that is very fond of putting all our information onto databases. They are even considering DNA profiles on every one of us. All this data is worth a lot of money to the right people and if our government will happily buy stolen information, I am sure the same will happen to our information. They have set a nasty precedent. Governments cannot break their own laws. Why should we listen to them tell us what to do if they wont even follow their own rules?

  • Tim

    Firstly, HMRC have broken UK law by buying stolen goods. It matter not that the information is on something they believe is stolen from them. Handling of stolen goods is handling of stolen goods.

    Now, here in the UK we have a government that is very fond of putting all our information onto databases. They are even considering DNA profiles on every one of us. All this data is worth a lot of money to the right people and if our government will happily buy stolen information, I am sure the same will happen to our information. They have set a nasty precedent. Governments cannot break their own laws. Why should we listen to them tell us what to do if they wont even follow their own rules?

  • a.sommer

    Who says that J.P. is in favour of all these services that the government tries to provide?

    He doesn’t need to be in favor of all of them. If the government provides any service, the money to pay for it has to come from somewhere. Even a service as incidental as telling other governments ‘no, we already have a government, thanks’.

    How does it get paid for?

  • A. Sommer; what if I don’t want any of the services the government provides? As to incidental services such as defense, I am willing to pay for them incidentally.

  • a.sommer

    what if I don’t want any of the services the government provides?

    I would suggest moving to a place run by a government that provides a range of services more to your taste. Options range from the absolutely minimal in rural Somalia, to super-deluxe full-service-plus in most of western Europe.

    As to incidental services such as defense, I am willing to pay for them incidentally.

    Can you elaborate on that?

  • Paul

    A,
    How about we donate money to the government to pay for services we feel we need, instead of having the government steal our money and use it to pay for things they think we “need”? The key issue is whether or not it’s voluntary.

  • Alasdair

    It may be because I have been out of the country for so long, but I think I’m missing something …

    As far as I can tell the UK “Government” acquired information, not real property – hence, not stolen goods … the information may have been obtained by espionage, and may indeed have been stolen, but that doesn’t make it stolen goods …

    Ron – you beat me to it with the “receiving” response … however, given that a post of Receiver of Revenue has a long and (ig)noble history, I suspect that there is something appropriate about HM’s Revenue and Customs employing a Receiver for the dubiously-acquired information …

  • a.sommer

    How about we donate money to the government to pay for services we feel we need, instead of having the government steal our money and use it to pay for things they think we “need”?

    …which ensures there will be a free rider problem of truly epic scope, and fails to ensure that the money donated will suffice to cover the cost of providing any services at all.

    Got any practical suggestions on how to resolve this conundrum? I’d like to figure out a way to make it work, but I’m not seeing one.

    The key issue is whether or not it’s voluntary.

    I agree completely on that- people should *always* have the ability to opt out, by moving to a place that operates more in line with their preferences.

  • Alasdair

    a.sommer

    People don’t even need to move to opt out … all they have to do is avoid the things which are taxable …

    Keep income low …

    Don’t purchase anything taxable …

    Don’t own anything taxable …

    Don’t sell anything taxable …

    If they do that, they have effectively opted out of paying taxes, have they not ?

    Of course, that would mean not actually *enjoying* the better things in Life, like comfortable housing, and most of the comforts of Life … still, if one *truly* want sot not have to pay taxes – what else can one do ?

  • A. Sommer: this problem has two aspects: one is moral, the other is practical. I will not discuss the moral part, because if you and I don’t already agree, we probably never will. As to the practical one, do you really think that there can be no private alternatives to government in providing the majority of the services it is currently providing? Hint: Somalia is NOT a free country.

    To your request to elaborate; national defense is a specific issue, and can and should be paid for specifically. The nation’s defense needs can be easily calculated, and an itemized bill can be presented to the taxpayers as the need arises. This is very different from the situation as we know it, where the government takes as much of your money as it likes, and spends it as it sees fit, on all kinds of things that have nothing to do with most of the taxpayers.

    Now, whether there should be a compulsory “defense tax” is a fair question, and ‘free riders’ is a real problem. I tend to think that in a ‘libertarian utopia’ this problem can be solved, but since we are not anywhere near that, I’ll be content with a tax system consisting solely of a “defense tax”, and maybe a “law and order tax”. We’ll cross that last bridge when we get there.

  • MarkS

    Germany wants EU Tax Debate

    http://news.bbc.co.uk/1/hi/world/europe/7274770.stm

    Hands up who thinks Germany really wants a debate. A debate suggests and open mind and an undecided outcome. Germany just wants to get more of its high taxing mitts on more cash to keep its bloated public sector afloat. Cracking down on EU tax havens will simply drive all the money to Singapore. Result…. massive own goal. Can we leave the EU yet?