The UBS case: The tax administration should look to France on the Finger

It is a far-reaching decision. At the end of July, the Federal court of the Swiss Federal tax administration (FTA) gave the green light: The office may provide information to 45’000 UBS clients in France to the local tax authorities. The decision was short: Three judges voted in favor, two against.

Today, the written judgment of the Federal court, is published. It gives an insight into how the judges came to their decision. Both the FTA and the UBS is not in a comment. You want to look at the judgment, only in more detail. Therefore, the data are not yet in France. "The Federal Department of Finance (FDF) will analyze the written grounds of judgment and thereafter the further steps are," said a spokesman.

The judgment sums up to 39 pages of the decision of the judges. It shows why you agree with in spite of the large concerns of the data delivery to France. However, an important question, even after reading the justification of the verdict remains: How to ensure the principle of Specialty? This internationally recognized rule that prohibits the recipient government uses the data for other things than for tax purposes. Say: France is allowed to use the data from Switzerland only to defaulting tax payers to make. The data may, however, be used in the ongoing criminal trial against UBS in France.

Billion-dollar buses

The Bank was convicted in Paris in the first instance, to a penalty of 4.5 billion euros, because the UBS is said to have helped the French in the case of tax evasion. In contrast, the Bank defends itself with all legal means.

in July, after the Federal court had approved the request for administrative assistance from France, moved to the big Bank and the bankers Association therefore, the Federal Steuerverwaltungzur responsibility: "The Swiss Federal tax administration needs to ensure that the data of the criminal proceedings against UBS are not used in the before in France." The bankers ' Association, said: "We expect the Federal authorities to give priority to the observance of this principle by France's top priority."

UBS General counsel Markus Diethelm, according to the judge's decision in Paris. Photo: Ian Langsdon (Epa)

In the written judgment of the Federal court, it is said that the French authorities had not agreed to need the data in a different method. Any use in another context, it is the prior approval by the competent requested authority. But solid as a rock, this promise does not seem to be. Currently, no use is planned of the transmitted information against the Respondent (the UBS), means there is something vague in the judgment.

To France in the hope

legal experts are sceptical as to whether this works. "I am personally rather critical of the Federal-court decision, because the principle of Speciality convinced dogmatic, but in practice it is not really enforceable, even against friendly States, such as France," said business law Professor Peter V. Kunz. Hence the slogan: "Hope and Fear, nor with respect to the French behavior simple".

the reasoning of The judge is therefore to be understood according to the lawyers as a Signal to. To the outside, as a reminder to France that the authorities really keep in mind. But also inside that the FTA meets further investigations and from the French side further assurances catches up. The question remains open of whether the FTA with the French authorities have already sought once again to contact. "Any ongoing discussions with the French authorities, we do not give any information," said a spokesman.

lawyers suggest that the FTA seeks re-assurance. Because it had come in the past to violations of the principle of Speciality. For legal experts, it is clear that the assistance data of Taxpayers may not be in a criminal case used. But what is with the information to the alleged accessaries? So information to the Bank and to the Bank employees. Can this be used in other proceedings?

fish trains accepted

The decision will also reverberate for another reason. Lawyers fear that the ruling so-called Fishing Expeditions will make it possible. As fish trains per day travelling assistance will be referred to the requests of foreign tax authorities, where there is no concrete evidence to individual customers or groups of customers are based on. There is no better example of such a RAID, so a legal expert.

In the written judgment of the Federal court, it does not mean that it was in this case is a Fishing Expedition, since France knowledge of French UBS-have already enough customers. However, the justification for this is extremely vague and could lead to further requests from abroad, the fear in the financial space.

Created: 04.12.2019, 13:35 PM