Jungholz by Vitali Vitaliev

No, it’s not Kuwait, nor the Caiman Islands, nor even the country estate of Russian multi-billionaire and Chelsea FC owner Roman Abramovich. Do you feel like asking the audience or perhaps phoning a friend?

No need to do so, for I am going to tell you the answer: Jungholz. A tiny Austrian village surrounded by Germany and all but lost in the Bavarian Alps, Jungholz boasts the world’s highest rate of deposited money per person and hence the world’s highest concentration of capital – all due to being home to three big Austrian banks. In plain words, it is officially the world’s wealthiest spot.

With just over 300 residents spread over seven square kilometres, the village was located on a flat "sundeck" plateau, which accounted for the relatively warm and sunny climate all year. It started from a small German farmstead, which was sold to a Tyrolean (Austrian) owner in 1342. When the first borders between Austria and Germany were drafted in 1463, the village was given to Tyrol, at which point the ongoing duality of the place began.

The Germans (Bavarians) kept trying to reclaim Jungholz peacefully until 1773 when the frontiers were finally agreed upon. After Napoleonic wars, the whole of Austrian Tyrol was incorporated into Bavaria - apart from Jungholz, which was forgotten and omitted from all annexation protocols. Similar to the principality of Monaco, Jungholz owed its status to a historical boo-boo.

Unable to correct the mistake, the Bavarian authorities chose to make Jungholz a tax-free haven, which it remained until now, if only to a certain extent. All German food in the village was tax-free, but alcohol wasn't.

During World War I, the men of Jungholz fought in the Austrian army, yet during World War II, they had to enlist in Vehrmacht, for the village had been temporarily re-attached to Germany to become part of its Sorgschrofen district in 1938-45.

In the 1950s, the village received two different phone codes: German and Austrian. Nowadays, one could dial Jungholz from Austria using the “056” Austrian area code, whereas calls from the neighbouring German villages and towns required dialling the “083” German one. Every phone number in Jungholz could be accessed by either country's local area code which, for some obscure reason, did not mean that the villagers could dial both countries at local rates.

Whereas calling Austria from Jungholz was a local call (this started in 1957, when a phone cable was stretched across the mountain; until then the village could only connect to its mother country via Germany), calls to Germany were charged at international rates. Before the Euro (BE), few public telephones accepted Austrian phone cards and/or German coins.

Postal services were regulated in a slightly less illogical way: from both Austria and Germany, one could send a letter at national rates using either of the village's two post codes: “D-87491 Jungholz (Oberallgau)” from Germany and “A-6691 Jungholz (Tyrol)” from Austria.  But, letters from all other countries were supposed to be using only the German code.

The Austrian village received its water and electricity from Germany and was privy to the superb German National Health System. The villagers were the world's only non-Germans entitled to use the German Health Insurance Scheme. It was baffling to learn that Jungholz was part of the German Trade Area, because outside the German Economic Area, its Austrian residents were allowed to shop tax-free in Germany but not in Austria outside Jungholz.

To get employment in the village, foreigners were supposed to obtain Austrian work-permits in the nearest Austrian town of Reuter, which was also home to a tiny police station responsible for maintaining law and order in Jungholz. It took weapons-carrying Austrian gendarmes about 30 minutes to reach the village via Germany - a procedure, regulated by a special bilateral agreement. The same agreement stipulated that, in case of emergency, German polizei were allowed to operate in Jungholz, too.

The village's only primary school offered its pupils an Austrian curriculum taught in Allemansch - "High German" - by two German teachers. Most Jungholz children continued their education in German secondary schools, which were nearer and, unlike the area’s Austrian schools, provided school buses.

Apart from skiing and tourism, the village's main industry and employer was banking. Jungholz was home to three big branches of Austria's main banks, operating with two SWIFT codes: Austrian and German. This meant that money could be transferred to and from Germany with no fees and taxes - like domestic transactions. On the other hand, they were regulated by extremely strict Austrian banking laws, barring German auditors from accessing the records, which is an ideal scenario for money laundering.
   
Free electronic Euro-converters were neatly stacked on a table at the plush and totally empty reception hall of Reiffeisenbank where I had an appointment with a young executive called Wolfgang. He told me that the attraction of Jungholz for investors lay in the fact that it had all the benefits of an offshore haven and many more.

“Here, we have three 100-percent-Austrian banks operating within the German financial system – the best of both worlds, so to speak. All three banks have permanent seats at Frankfurt Stock Exchange, and our clients are mostly German.”

The real allure for investors was that Austrian banking secrecy regulations, laid down in the country’s constitution, were among the world’s strictest, second only to Swiss. Wolfgang showed me an English copy of his bank’s “Private Banking” portfolio, which I found darkly fascinating.

It began on a somewhat philosophical note: “There are moments in life when you can’t compromise on confidentiality - for instance, when it comes to your money. Our Goldfinger Numbered Account makes absolute confidentiality a reality.”

I rather liked the straightforwardness of the account name “Goldfinger,” bringing about direct associations with James Bond, gangsters and international fraudsters. Confidentiality made reality, indeed. Or, reality made complete confidentiality.

“The names and addresses of the account holders are not entered in the computer system and thus do not appear on the account statements or invoices. Only selected management-level employees and those vested with special power of attorney have access to this data.”

As I was reading, the mystery deepened.

“We hold the copyright on the Goldfinger Numbered Account – the only one of its kind in the world. When you open your account, your electronic fingerprint stored in your account gives you that extra margin of security.”

The most amazing – and rather spooky – feature of the account was that the transactions did not have to stop even with the account holder’s sudden demise.

“Reiffeisenbank in Jungholz has no obligation to report the death of a foreign account holder to the probate courts. You can make your own individual arrangements right away by naming additional individuals authorised to sign. That way, you can grant authorisation now for someone to sign even after your death.”

The late Captain Bob, alias Robert Maxwell, would have loved this financial immortality.

“Why can’t I see any clients?” I asked Wolfgang when we returned to the fountain-ridden reception lounge.

“They seldom come here as most of our transactions are done either by phone or by the Internet,” he said. He smiled and added, “Some of our clients come from eastern Europe.”

By saying that, he was obviously trying to please me – possibly, even to reassure me that I could still make it big if I wanted to, like some of my former compatriots did.

To be absolutely honest, I was not interested. I knew precisely what their east European “clients” did for a living, and that sort of “Goldfinger” lifestyle was certainly not my cup of tea. At least, I had a much better chance to die of natural causes.

Being poor in the world’s wealthiest place did not feel awkward. In fact, figuratively speaking, I was wealthier than many after discovering Jungholz.

Having left the bank, I remembered that I forgot to ask Wolfgang how they were able to verify electronic fingerprints by phone or the Internet.

Not that it really mattered…