The Federal Administrative Court and the Federal Criminal Court in Switzerland deal almost every week with questions of international administrative and legal assistance. In the majority of cases, the accounts of foreign bank clients are frozen, or banking documents have to be handed over to foreign authorities. The Swiss lawyer Dr. Thomas Rihm gives more colour on procedures and defences.
Dr. Rihm, can you expand on the various types of international judicial assistance procedures?
Rihm: A distinction must be made between legal assistance and administrative assistance. Administrative assistance encompasses the international cooperation of administrative authorities. For example, between the US Securities and Exchange and FINMA, or between the IRS in the US and the Swiss Federal Tax Administration. Legal assistance concerns the cooperation of law enforcement authorities.
What are the main differences between administrative and judicial assistance?
Rihm: It is not always possible to make a strict distinction between administrative assistance and legal assistance. As the granting of international administrative assistance is governed by less stringent procedural requirements (e.g. with regard to group inquiries), attempts abroad frequently target the path of administrative assistance instead of legal assistance. International legal assistance is provided based on the Swiss Federal Law on International Legal Assistance in Criminal Matters of 1981 and on a number of international treaties. In both cases, this concerns the assistance offered in criminal proceedings conducted abroad, while administrative assistance mostly applies in tax matters.
What defences are available to a foreign bank client?
Rihm: Foreign bank clients have a wide range of formal and material defences at their disposal. Nevertheless, since the IRSG came into force, the Swiss authorities pursue a practice that makes it more straightforward to request administrative assistance and legal assistance from abroad. The Swiss authorities are not obliged to carry out comprehensive investigations, but only have to check whether the requirements of the international conventions have been met. This practice also so-called spontaneous assistance which has no legal basis at all.
Do foreign law enforcement agencies struggle in their request for administrative or legal assistance?
Rihm: Years of experience have shown that the Swiss authorities do not impose any extreme requirements on a request for administrative or legal assistance. Such a practice is more than questionable because administrative and judicial assistance procedures should not be politically influenced. According to the IRSG, a request for international assistance must be refused if the requesting State does not grant mutuality. The Swiss Federal Department of Justice and Police is responsible for checking whether this condition is met. However, mere assurances obtained from foreign law enforcement agencies are not sufficient. It would make more sense to examine the past requests of the respective state and then decide whether the new request should be granted. The Swiss authorities and courts only grant legal assistance a crime is also punishable in Switzerland. If only corporations are affected by the legal assistance, the question also arises of whether they are punishable as companies, or in other words, whether the criminal law of the state seeking legal assistance features true corporate criminal laws. Frequently, this is not yet the case.
Can you tell us about illicit fishing expeditions?
Rihm: In particular, the foreign law enforcement authorities must plausibly present the facts relevant to criminal law, which they often fail to do. As a result, bank customers rightfully complain about foreign authorities carrying out fishing expeditions.
Is there any possibility to appeal against such decisions of the authorities?
Rihm: The Swiss Federal Courts of first instance enjoy enormous discretion as the Swiss Federal Supreme Court as the final instance only reviews decisions in particularly important cases what is a high hurdle. As a result, these first-instance court decisions in Switzerland are de facto last-instance decisions.