Information Note on the Court’s case-law 191
December 2015
G.S.B. v. Switzerland - 28601/11
Judgment 22.12.2015 [Section III]
Article 8
Article 8-1
Respect for private life
Disclosure of banking information to tax authorities of another State pursuant to bilateral agreement: no violation
Facts – In 2008 the US tax authorities (Inland Revenue Service - IRS) discovered that thousands of US taxpayers were holders of bank accounts with the Swiss bank UBS SA (UBS) in Geneva which had not been declared to their national authorities or were the beneficial owners of such accounts. In 2009 the IRS brought civil proceedings to order UBS to hand over the identities of its 52,000 US customers and data on the accounts held by the latter. Switzerland was concerned that the dispute between the US authorities and UBS might give rise to a conflict between Swiss and US law should the IRS obtain that information, and the civil proceedings were therefore suspended pending an extra-judicial agreement. With a view to identifying the taxpayers in question, the Government of the Swiss Confederation and the United States concluded an agreement concerning the IRS’s request for information relating to UBS (”Agreement 09”). Switzerland undertook to deal with the US request for administrative cooperation concerning the UBS’s American customers according to the criteria set out in the agreement. In response to a request from the IRS, the Swiss Federal Tax Administration (AFC) instigated an administrative cooperation procedure and invited the bank UBS to supply detailed files on the customers mentioned in the appendix to Agreement 09.
This was the background against which UBS transmitted the applicant’s file to the AFC in 2010. An initial decision by the AFC was set aside by the Swiss Federal Administrative Court on procedural grounds. After receiving the applicant’s observations, the AFC stated that all the conditions had been met for affording administrative cooperation to the IRS and for ordering the requested documents to be handed over to the latter. The applicant’s appeals to the Federal Administrative Court were dismissed. In December 2012 his bank details were transmitted to the US tax authorities. During the examination of the present case the US authorities were still carrying out their investigations and the applicant had not yet been charged with any criminal offence.
Law – Article 8: The applicant had suffered an interference with his right to respect for his private life on account of the transmission of his bank details to the US tax authorities. There can be no doubt that information on bank accounts constitutes personal data protected under Article 8 of the Convention.
As regards the alleged lack of foreseeability concerning the retroactive application of the treaties at issue, the Swiss Federal Administrative Court had well-established case-law to the effect that the provisions on administrative and criminal-law cooperation requiring third parties to provide specific information were procedural in nature and therefore applied, in principle, to all current or future proceedings, including those relating to any tax years pre-dating their adoption. Moreover, it could not be held that the former restrictive practice of the Swiss authorities in matters of administrative cooperation in the tax field created a possible legitimate expectation on the applicant’s part that he could continue to invest his assets in Switzerland free of any supervision by the relevant US authorities, or even free simply of the possibility of retroactive investigations.
Since the banking sector is an economic branch of great importance to Switzerland, the impugned measure, which formed part of an all-out effort by the Swiss Government to settle the conflict between the UBS bank and the US tax authorities, could validly be considered as conducive to protecting the country’s economic well-being. In this context, the US tax authorities’ allegations against Swiss banks could have jeopardised the very survival of UBS, a major player in the Swiss economy employing a large number of persons, which explains Switzerland’s interest in finding an effective legal solution in cooperation with the US. By concluding a bilateral agreement Switzerland averted a major conflict with the US. The measure therefore pursued a legitimate aim.
As regards the necessity of the measure, it should be noted that it only concerned the applicant’s bank account details, that is to say purely financial information. No private details or data closely linked to his identity, which would have deserved enhanced protection, had been transmitted. It follows that Switzerland had had an extensive margin of appreciation in this regard. Concerning the effect of the impugned measure on the applicant, his bank details had been forwarded to the relevant US authorities so that they could ascertain whether the applicant had in fact honoured his tax obligations, and if not, take the requisite legal action. The commencement of criminal proceedings remained a matter of sheer speculation. Moreover, the applicant had benefited from various procedural safeguards against the transfer of his data to the US tax authorities. First of all, he had been able to lodge an appeal with the Federal Administrative Court against the AFC’s decision. That Court had subsequently set aside the said decision on the grounds of a violation of the applicant’s right to a hearing. The AFC had consequently invited the applicant to submit any comments within a given time. The applicant had availed himself of that right. The AFC had then given a fresh, duly reasoned decision finding that all the conditions had been met for affording administrative cooperation. The applicant had subsequently lodged a second appeal with the Federal Administrative Court, which dismissed it. The applicant had thus benefited from several effective and genuine procedural guarantees to challenge the disclosure of his bank details and obtain protection against the arbitrary implementation of the agreements concluded between Switzerland and the United States.
Regard being had to all the circumstances of the case, particularly the fact that the data disclosed had been relatively impersonal in nature, it had not been unreasonable for Switzerland to have prioritised the general interest of an effective and satisfactory settlement with the United States over the applicant’s private interests. That being the case, Switzerland had not exceeded its margin of appreciation.
Conclusion: no violation (unanimously).
The Court also unanimously concluded that there had been no violation of Article 14 read in conjunction with Article 8 of the Convention.
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This summary by the Registry does not bind the Court.
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