BERLIN/ZURICH (Reuters) - Swiss prosecutors are charging three Germans with industrial espionage and violating bank secrecy, a media report said on Tuesday, potentially stoking a simmering dispute between Germany and Switzerland.

Zurich prosecutors allege the individuals passed documents to German courts and authorities, several Swiss and German media reported, in the latest twist to a row pitting Switzerland’s long-defended bank secrecy laws against a German tax clampdown.

The issue should be examined by the German government, said Lothar Binder, the financial policy spokesman for the Social Democrats in the German parliament.

“We need to ask what the legal basis the Swiss government is following here,” he told the media groups behind the report. “Perhaps they are trying to set an example to deter others.”

The Zurich prosecutor’s office was not immediately available for comment, while a German foreign ministry official said it was familiar with the case but that it does not comment on ongoing judicial processes.

The Swiss justice ministry had empowered the Zurich state prosecutor to investigate the three people on possible charges of industrial espionage in 2015, the media report by German weekly newspaper Die Zeit, the Correctiv research group, German broadcaster ZDF and Swiss digital magazine Republik, said.

The report, a summary of which was released to German media, said the three individuals - a Stuttgart-based attorney for Mueller and two bank employees - have denied the charges.

German states have for years obtained details of bank accounts held secretly in Switzerland by Germans they say are trying to evade tax. Swiss authorities say this amounts to the theft of business secrets.

The Swiss Banking Act requires employees of Swiss-regulated banks to keep client information confidential, but a number of staff have leaked account details to foreign authorities in the past decade as Western governments crack down on tax evasion.

Such whistleblowers and new disclosure standards have proven costly for Swiss banks, which have suffered hundreds of billions of dollars in outflows as a result and more than a third of Swiss private banks have closed.

The latest case stemmed from a legal dispute between private Swiss bank J. Safra Sarasin and German investor Erwin Mueller concerning “Cum Ex” trades which made use of a capital gains tax loophole that has since been outlawed, according to the report.