2.52 Xavier Oberson, Récents développements dans le droit de l’assistance internationale en matière fiscale, notamment avec les Etats-Unis: sept leçons à tirer de « l’affaire UBS », in Genève au confluent du droit interne et du droit internationale, Mélanges offert par la Faculté de droit de l’Université de Genève à la Société Suisse des Juristes à l’occasion du Congrès 2012, p. 135-164
[Recent developments in the laws concerning international legal assistance in tax matters particularly as regards to the United States: Seven lessons to be drawn from the “UBS affair”]
The text at hand is a contribution to the Festschrift of the Faculty of Law at the University of Geneva to the annual meeting of the Swiss Lawyers Association in 2012 with the title “Genève au confluent du droit interne et du droit internationale”. It is a tradition that if the venue chosen for an annual meeting of the Swiss Lawyers Association is a city with a University, the faculty of law of that University writes and edits a Festschrift for the occasion. These Festschrifts usually deal with the Leitmotiv of the respective annual meeting, in the particular case in Geneva “das Schweizerisches Recht vor der Herausforderung des internationalen Rechts” (Swiss law facing the challenges of international law). As indicated in the introduction of this part of the collection, the post-World War II period of the legal relationship between Switzerland and the United States has again and again been marked by specific legal cases, some of them leading to a conflict of jurisdiction. Oberson’s text is part of the study of the impact on Swiss law in conflicts of jurisdiction with the United States. The text at hands is a complete overview of the series of court cases dealing with “UBS affairs” in front of Swiss courts.
The text has to be read in the conjunction with the other texts contained in the collection on the Amicus Curiae Brief of government of Switzerland, the enforcement proceedings of the Jon Doe Summons in front a federal district court in Florida (see text 2.50), the legal opinion for the Federal Office of Justice of the Swiss Government “The Treaty Request Agreement between the Swiss Confederation and the United States of America of August 19, 2009 (UBS-Agreement)” by professors Thomas Cottier and René Matteotti (see text 2.51) and the postmortem text “Tax fraud or the like” of Thomas Cottier (text 2.53) on considerations and lessons learned in connection with the function of the principle of legality in the laws of treaties in Swiss law.
Xavier Oberson has been a Professor of Swiss and International Tax Law at the University of Geneva since 1995. He is the director of the LLM tax program at the University of Geneva and is a member of the federal commission for tax harmonisation. He is the senior partner of a highly regarded specialized law firm, active in the field of taxation.
Oberson was among others closely involved with the issues called the “affaire UBS” (the UBS-case). He has been a member of the expert commission on international taxation and banking secrecy of the Swiss government of 2009. Oberson was also a member of the Swiss delegation negotiating in 2009 the respective changes of the Swiss Double Taxation Treaty with the United States, integrating new OECD-based standards of international legal assistance under great pressure from the international community. Oberson is known to have been consulting out of Geneva in the matter as well.
Because of the cut-off date of the editors work at the end of May 2013 the text and the comments do not address the most recent developments, in which the United States government will attempt to settle the issue with four groups of Swiss banks involved in aiding US clients to avoid paying taxes in the US. This will hopefully amount to a definitive solution of – all based on the UBS case – of this cloud of the most recent history of the legal relationship between Switzerland and the United States.
The text is situated at the time of a fundamental change of the Swiss government’s position in international legal assistance in tax matters to follow OECD standards. The introduction contains a detailed description of the role and function of the double taxation treaty between Switzerland and the United States of 1996 and the corresponding memorandum of understanding (MOU) to this double taxation treaty particularly dealing with examples of the definitions of “tax fraud or the like”.
The text follows a series of court cases in the “affaire UBS” – un cas enblématique et problématique que pose l’assistance administrative international en matière fiscale – which was triggered by requests of the International Revenue Service (IRS) to produce and communicate 300 names of taxpayers who were alleged to have committed tax fraud in the United States in the meaning of article 26 of the double taxation treaty between Switzerland and the US.
The decision of the Federal Administrative Tribunal of the 5th March 2009, (“UBS I”) among others dealt with the use of offshore structures constituting a violation. The decision led to the surprising and paradoxical result that the Federal Administrative Court called the case moot since the respective identities of the accounts had in the meantime been provided to the US government and IRS by FINMA, the Swiss supervisory authority on banks and insurance companies.
The decision of the Federal Administrative Tribunal from the 5th January 2010 (“UBS II”) and a case from the 15th July 2011, of the Swiss Federal Tribunal (“FINMA”) dealt with the recourse by FINMA against a decision of the federal administrative tribunal declaring the communicating of the accounts to the IRS as illegal, which was overturned by the Swiss Federal Tribunal.
In connection with the UBS agreement on legal assistance between the Swiss government and the United States, the text deals with the decision of the Federal Administrative Tribunal of 21st January 2010 (“UBS III”), which brought a temporary halt to the putting into operation of the complete “UBS agreement” of August 2009 for a lack of a legal basis for the UBS agreement.
The decision of the Federal Administrative Tribunal of 15th July 2010 (“UBS IV”), again rules on the question of the validity of the “UBS agreement”, this time upon the new version of protocol after its ratification by the Swiss parliament.
The text then reports on the decision of the Federal Administrative Tribunal of 21st September2010 (“UBS V”), which dealt with the issue of the validity of the “UBS agreement” in cases in which the persons were not directly concerned by the procedures of legal assistance in cause.
Finally the text deals with the case of the Swiss Federal Administrative Tribunal of the 21st March2011 (“trust discrétionnaire”) (“discretionary trust”), in which the beneficiary of a discretionary trust argued not to be covered by the agreement on international legal assistance in connection with a UBS account opened in the name of the trust by the trustee.
Xavier Oberson draws seven lessons of the “affaire UBS”. He comes to the conclusion that the question of the legality of the “UBS agreement” is still open in several respects. He argues that the speed of change of Swiss law in connection with international legal assistance in tax matters should not make anyone forget that in the prevailing focus on efficiency the rights of defence of the persons concerned are not enough and are not well protected.