Swiss court forbids provision of UBS data to Dutch fishing requests. Yet banking secrecy has not been reinstated.

The phone has been ringing off the hook the past few months with calls from tax evaders who still wanted to make last minute use of the voluntary disclosure option. This was the result of articles about the Swiss bank UBS and then about Credit Suisse. Based on a ‘group request,’ banking information of Dutch account holders was supposedly being provided to the Swiss Federal Tax Authority, which in turn was transferring it to the Dutch Tax Authorities. A discussion broke out: is this fishing expedition excluded on the basis of the Dutch-Swiss treaty? Many tax evaders did not want to wait for the answer and decided to voluntarily disclose their Swiss equity to the Dutch Tax Authorities.

The national flag of Switzerland sticking in a pile of mixed european banknotes.(series)

The Switzerland Court: anonymous group requests are not admissible

In its ruling of last Monday, the Swiss federal administrative court in St. Gallen has now put a spanner in the works. The Dutch tax authorities had submitted the group request with reference to the Treaty with Switzerland for the prevention of double taxation. According the judgement of the Swiss court, it follows from provision XVI of the Protocol, which is part of the Treaty, that information requests can only be permitted if they pertain to identified individuals.

The judge quoted (§6.3) that the Protocol explicitly requires that the group request must meet sufficient specified information, in particular:

  • the person’s name and if known,
  • address,
  • account number,

but also other information to enable the identification of that person or group of people, such as:

  • date of birth,
  • civil status, and
  • tax identification number.

The group request by the Dutch tax authorities, however, did not even contain the names of the account holders involved in the investigation. Although the Swiss Federal Tax Administration (FTA) permitted this state of affairs, the court conclusively ruled (§ 9) that group requests without specification of the names that the investigation pertains to, are not permitted, based on the Treaty and accompanying Protocol. The ‘additional agreement’ that was entered into at the end of October 2011, and signed by Switzerland and the Netherlands in connection with the interpretation of the relevant provision from the Protocol and the ‘OESO commentary’ on the exchange of information between the Contracting States, has not led to a different ruling.

Reinstate Swiss banking secrecy?

Has this led to the reinstatement of Swiss banking secrecy? Certainly not. Although the Swiss court found the group request from the Dutch tax authorities to be too general, the Dutch court has approved this investigation methodology – which, in our opinion, (still) qualifies as a ‘fishing expedition’ – at national level.

The Tax authority will obtain the information it wants in a roundabout way. The Project Debit/Credit led by the Functional Persecution Office in Zwolle, for example, has ordered a credit card data provider to carry out a similar group request by the Dutch tax authorities. A banking secrecy that is respected abroad is undermined by this.

Through ‘information requests’ to (nearly) all processors of (credit and debit card) payment transactions active in the Netherlands, the Tax Authority has received transaction details about payment transactions that were carried out in the Netherlands with foreign debit or credit cards. during the period of 2009 through 2011. Using this transaction data, travel bureaus and car rental agencies, for example, have started ‘third party investigations’ to retrieve the identity of the card holder/user.

As a result of this, generously provided information, a number of criminal procedures have been instigated on these credit cards and the associated Swiss, Andorran and Luxembourg bank accounts. Those who (so far) are not included in the criminal proceedings, are being forced to submit proof against themselves through disclosure requirements and setting themselves up for a penalty or criminal case.

Not too late for voluntary disclosure

The Swiss tax authorities are expected to appeal the ruling by the court. Meanwhile, this ruling does offer support for anyone who has voluntarily disclosed or who is considering doing so; there is no reason to assume that the tax authorities would have tracked down these UBS (and Credit Suisse) tax evaders without voluntary improvement. For now, the phones can keep ringing.

Mr. drs. W. de Vries

Mr. K.M.T. Helwegen

 

The scope of the legal assistance during interrogation is not yet clear

The right of access to a lawyer during a police interrogation should be implemented into national legislation by 27 November 2016 at the latest. Before the legislator converted the Directive into national law, the Supreme Court ruled at the end of 2015 that as of 1 March 2016 an apprehended suspect is entitled to assistance from a lawyer during a police interrogation. Following this ruling, the Public Prosecutor published policy rules on the role of the lawyer during the interrogation. These policy rules make the right to be effectively involved in the interrogation is an illusion. The lawyer is unjustly allocated too few powers, making it impossible to guarantee fundamental aspects of the defence. Many lawyers believe that the way in which assistance is arranged during a police interrogation is a detrimental shortcoming that is contrary to Union Law. This has led to a proceeding at the District Court of The Hague. How legal assistance is to be provided during interrogation unfortunately still remains unclear. The interlocutory proceedings court has limited itself to putting a preliminary question to the Supreme Court concerning the scope of this right.

verhoorkamer

The minimum guarantees applicable to the right to legal assistance are laid down in an EU directive of 2013. One of these guarantees is the right to have a lawyer present during the interrogation. The EU directive explicitly states that a lawyer may effectively be involved in the interrogation. The EU directive builds on the case law of the European Court of Human Rights. This case law establishes standards for the right of access to a lawyer. The Supreme Court has already summoned the legislator in 2014 to expeditiously effect the implementation of the required statutory regulations for legal assistance during interrogation. A legislative proposal to implement the EU directive has been submitted to the House of Representatives. Before national legislation was established, the Supreme Court had already ruled that an apprehended suspect is entitled to a lawyer during a police interrogation. This also has positive consequences for FIOD cases. Because it is no longer a matter of doing a favour but rather an obligation to enable a lawyer to effectively participate in the interrogation. This enables us as a law firm to guarantee that the suspect’s interests within the criminal proceeding are represented fairly and diligently during questioning.

The full effectiveness of Union Law

The national law should be interpreted as much as possible in the light of the EU directive to guarantee the ensuing obligations.1 In so doing, the government should take appropriate measures to guarantee compliance with the obligation to legal assistance during interrogation. This obligation applies to all public authority bodies, including the legislator and the judiciary.2 It should follow from the definitive national legislation that a lawyer should effectively be involved in a (police) interrogation. However, the Directive has not yet been converted into national legislation. According to the Court of Justice, a Directive only extends to persons with legal rights via national law. This means that a suspect may not rely on these provisions from the Directive directly.

Powers too restricted for a somewhat discouraged counsellor

According to the Minister of Security and Justice’s response to the Parliamentary questions, the lawyer will be assigned a wide spectrum of powers and will have ample of opportunity to participate in the interrogation.3 If follows from the EU Directive that member states can take practical measures and that participation in an interrogation should be exercised in compliance with the procedures in the national law. The national procedures will, however, have to be without prejudice to the actual exercising and the essence of the relevant law.4 The minister does not address these restrictions of Union Law in his response to the Parliamentary questions. One might wonder whether a lawyer may in fact be given the opportunity to provide legal assistance during the police interrogation, if, among other things, commentary may only be made before and after the interrogation. The role of a lawyer is limited to the beginning and end of the interrogation and three specifically described situations (ban on exerting coercion, clarification of questions and continuation of interrogation cannot proceed due to suspect’s condition). How can a lawyer with such a subordinate and minor roll represent the interests of a suspect effectively during the interrogation?

Preliminary question to the Supreme Court

The judgement of the interlocutory proceedings court offers no solution. The scope of the right to the legal assistance with respect to the lawyer remains unclear. An important point in our opinion is that the ruling confirms that the Public Prosecutor’s policy letter limits the lawyer’s role during the interrogation.5 As the Directive has not yet been implemented into national legislation, the fulfilment of this right cannot be derived from the Directive. The question on which the interlocutory proceedings court must decide is therefore whether the temporary arrangements that have been made in response to the Supreme Court’s ruling (Legal assistance during interrogation ruling) are compatible with the standard established under the Supreme Court’s ruling on legal assistance during interrogation. This is why the interlocutory proceedings court is applying to the Supreme Court with a preliminary question as to whether the restrictions ensuing from the Public Prosecutor’s policy letter are compatible with the standard established under the Supreme Court (Legal assistance during interrogation ruling).

We cannot emphasise enough how important it is that the rights that ensue from the Union Law be effectively guaranteed. We believe that it is not only a duty, but also a counsellor’s obligation, to protect the fundamental rights of his client. This means that a counsellor should be able to intervene during the police interrogation if a lawyer deems this is necessary in the interests of the client. The Dutch Bar Association has drawn up a protocol and interpreted the scope of the right to legal assistance during interrogation, which we will observe for the time being.

1 See ground for the decision 20.

2 See ground for the decision 26.

3 See, among other things, the response to Parliamentary questions 8 and 9, which were submitted to the Minster of Security and Justice.

4 Recital 25 of relevant EU Directive

5 See ground for the decision 4.6.

Mr. drs. W. de Vries