July 15 (Bloomberg) -- To German customs officers, the smell of money is best captured by their four-legged friends.
The airport in Frankfurt, the country’s financial capital, has a trio of German shepherd dogs to help trace large sums of cash brought into the country. In 2012, seven offenders were caught on average each day, and 28 apprehensions were made specifically using dogs. By June of this year, the canine patrol had nabbed 20 offenders, the customs office said.
Individuals crossing European Union borders must declare cash exceeding 10,000 euros ($13,068). With countries including Switzerland and Luxembourg pressured to loosen bank-secrecy laws and the German government buying up lists of tax dodgers, more money squirreled away abroad is flowing back home. Notices served on cash offenders have jumped 11-fold since 2000 to 2,489 last year, data provided by the customs office show.
“Your dog at home that can do some tricks is equivalent to a bicycle, while our dog is a Porsche,” said Marc Behre, a spokesman for the Bremen customs office, which also has a shepherd dog trained for cash. “We use only the best.”
The dogs specialize in detecting euro and dollar notes. Animals are typically purchased at the age of one, undergo health checks and then receive an 18-month training routine. Robustness, size, life expectancy and temper determine which breeds are suitable, said Uwe Wittenberg, who heads the dog squad at Frankfurt airport.
German retail deposits have climbed in 22 of the past 24 months, according to data compiled by the European Central Bank. Deposits reached 1.8 trillion euros ($2.35 trillion) in May, an increase of 3 percent in the past year and up by more than 40 percent in the past decade. German three-month government bill rates are currently minus 0.02 percent, down from a high for the year of 0.05 percent at the end of January.
Paper to print currencies is made from cotton and linen, rather than wood pulp, and euro notes are all-cotton. The sniffer dogs probably react to the ink used to print on the notes, said Behre, though central banks keep the exact composition of their legal tender a closely guarded secret.
More than 10 specially trained money-detecting dogs are used in Germany, with as many as four employed in Frankfurt, according to Bernd Roessler, a spokesman for the federal finance office. While dogs have been used to sniff for drugs for more than 40 years, training them to seek cash carried is more complex and has only existed since 2010.
“Our dogs are trained to sniff for bundles containing 1,000 individual notes or more, and after learning the character of a smell, they can recall it for as long as four months,” said Wittenberg.
Cash and equivalents seized in the first six months topped amounts collected in every calender year since 2003, data provided by the customs office show. Criminal investigation proceedings on money laundering initiated by the hunt stood at 78 in Germany last year, the highest in eight years.
European leaders are working on a savings tax pact designed to share data on income earned abroad among its 28 member states, tightening rules and closing loopholes for tax evaders. Separately, anti-tax-evasion discussions with non-EU members including Switzerland, Liechtenstein, Andorra, San Marino and Monaco are under way.
The German states of North Rhine Westphalia and Rhineland-Palatinate have bought data on bank accounts of possible tax evaders, adding pressure on Germans with money stashed away abroad. Once a probe has been opened, an offender can no longer turn himself in under an amnesty offered.
German federal states received more than 8,300 requests for amnesty in 2013, pushing the total to more than 36,000 since 2010, data provided by the states’ finance ministries show. North Rhine-Westphalia and Baden-Wuerttemberg alone collected more than 1 billion euros combined through amnesty cases, spokesmen for the states said.
“The main reason for this trend surely is the fact that the risk of getting found out has increased,” said Stienke Kalbfuss, a spokeswoman for Saarland’s finance ministry.
Those who take chances and try to bring their money home face the risk of a canine confrontation at the border. In Frankfurt, sniffer dogs need no more than 15 minutes to check about 300 pieces of luggage, a typical airplane load, for smuggled goods. The animals then take a 30-minute break to recover, and can check out as many as 8 jets during a shift.
Dogs seeking cash usually undertake fewer checks. While training for the character of a smell takes only 5 weeks, detecting cash is much harder for the animals than sniffing for cocaine or explosives, as the smell of money varies more.
As exposed evaders forgo some money intended for comfortable sunset years, the dogs are rewarded with a cozy retirement. After a decade of service, they move in with their handler, with the government covering food and veterinarian expenses for their twilight years removed from sniffing.
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