The Swiss Supreme Court ruled in a decision of February 13, 2017 (published two days ago) that the Swiss Federal Tax Agency (SFTA) must provide its counterparts in France with certain information on a UBS bank customer, although French request for international tax assistance is likely based on data stolen in France.
In 2013, the French tax authorities had posed such a request on a number of UBS customers who had banking relationships with UBS in Switzerland and - allegedly - did not properly disclose income and wealth vis à vis the French tax authorities. In October 2014, SFTA approved this requests for international tax assistance.
A French citizen residing in Switzerland did not accept the transfer of his banking data and complained, amongst other things, that the French request was based on stolen data as a former marketing agent for UBS in France had collected a list of 600 customer names and sent it to the French tax authorities in 2010.
"In the view of the Swiss Federal Supreme Court, the "fruit of the poisonous tree"- doctrine applies only to data thefts committed in Switzerland and not to those abroad."
In September 2016, the Swiss Federal Administrative Court rejected the international tax assistance approved by SFTA two years earlier as the French tax authorities' request - by using the stolen bank data - infringed the principles of good faith as implicitly contained in the Double Taxation Treaty between Switzerland and France.
The Swiss Federal Supreme Court now assessed the situation differently. It concluded that the Double Taxation Treaty between Switzerland and France should be interpreted strictly, so it has no basis for refusing the international tax assistance. In arguing so, the Federal Supreme Court had to disregard the Swiss Tax Assistance Act of 2013, saying specifically that stolen data must not be used in international tax assistance procedures. Yet, in the view of the Swiss Federal Supreme Court, this "fruit of the poisonous tree"- doctrine applies only to data thefts committed in Switzerland and not to those abroad. Otherwise, so the court's argumentation, this provisions would have an extraterritorial effect, what would have violated the Swiss legislators' intention under the Swiss Tax Assistance Act of 2013.
"The Federal Supreme Court had to disregard the Swiss Tax Assistance Act of 2013, saying specifically that stolen data must not be used in international tax assistance procedures."
In the present case, the bank data were collected by former UBS employees in France who wanted to put an end to illegal tax practices of the bank. According to the Swiss Federal Supreme Court, it remained unclear as to whether thge theft committed abroad was indeed given. Conversely, it was evident that UBS bank employees in Switzerland were not involved in the data collection, so a criminal behavior committed in Switzerland was not given, and therefore the conduct of the foreign UBS-employees could not be regarded as a violation of Swiss bank secrecies.
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