Anglo Irish Bank’s subsidiary in Austria linked to secret deposit schemes
Austrian bank sought business from firm that set up offshore trusts for customers
Records relating to the Austrian bank are among more than two million secret files obtained by the International Consortium of Investigative Journalists (ICIJ) that expose covert companies and trusts in the British Virgin Islands (above), the Cook Islands and other offshore havens.
Anglo Irish Bank’s subsidiary in Austria sought out business from a company that set up offshore trusts for customers, recommending the Irish-owned bank in Vienna as a good place to deposit money secretly.
Records relating to the Austrian business of the now defunct Irish bank, dating back to when Anglo was at its peak, are among more than two million secret files obtained by the International Consortium of Investigative Journalists (ICIJ) that expose covert companies and trusts in the British Virgin Islands, the Cook Islands and other offshore havens.
In 2006, a senior executive at Anglo Irish Bank (Austria) wrote to the Portcullis Trustnet, the Singapore-based company which has helped tens of thousands of people set up offshore companies and trusts, praising the benefits of Austria’s strict banking secrecy laws.
The bank executive recommends the merits of opening up a bank account in Austria instead of in Switzerland, where banks religiously guard the secrecy of their customers. He said bank employees in Austria were prohibited from divulging information to outside parties under the country’s laws.
“While Switzerland is undoubtedly the world’s best-known private banking centre, neighbouring Austria offers similar facilities and, in addition, deliberately keeps a lower profile,” Florian Koschat. vice-president of Anglo Irish Bank (Austria), said in his email to the company.
‘Smooth and quiet’
“Investors around the world have learned to appreciate the smooth and quiet way in which Austrian banks conduct business with their customers.”
Austrian bank secrecy laws forbid banks to “disclose or make use of secrets which have been entrusted or made accessible to them solely due to the business relationships with customers”, he said.
In a detailed presentation on Anglo Irish Bank in Ireland sent to the offshore company formations agent by Dr Koschat, the Anglo-owned bank also refers to Austria as an ideal country for private bank because there is a limited tax liability for non-residents and because banking secrecy is “in the rank of constitutional law”.
Other records at Portcullis Trustnet show that, in subsequent years, deposit accounts were set up at Anglo Irish Bank, both in Austria and in the bank’s operations in the Isle of Man, for offshore entities.
They include an account in Vienna set up on behalf of a trust based in the Cook Islands on September 29th, 2008, when Anglo was scrambling to raise money to counter a run on the bank and the day before the government intervened to save Anglo from collapse with the bank guarantee.
Bank records show that an American citizen, a dental surgeon in the state of Maine, was the trust’s beneficial owner and his deposit amounted to several hundred thousand euro on a high rate of interest. Asked whether Anglo’s Austrian bank facilitated tax evasion for customers, Dr Koschat, now executive director of Vienna-based financial company Pallas Capital Holding, declined to answer any questions and referred queries to Anglo.
In response to a follow-up email, he said he was “not entitled to discuss any information regarding former employers with you or any third party for that matter”.
Anglo bought the Austrian bank from Royal Bank of Canada in 1995. The Vienna-based bank was then known as Royal Trust Bank (Austria) and was attractive to Anglo as it had €300 million in deposits that could fund new lending.