#23: Double jeopardy European style

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The non bis in idem principle gives the right not to be prosecuted or to be punished twice for the same facts. This principle is acknowledged in article 4 of Protocol No. 7 to the European Convention on Human Rights. But also in article 14, sub 7, of the International Covenant on Civil and Political Rights and article 50 of the European Convention. This principle is thus widely accepted in the Europe Union. Although this principle is recognized as one of the basic principles in our law system, the interpretation of this principle is exposed to developments. It is even possible that the European Court for Human Rights (ECtHR) and the European Court of Justice (ECJ) will give a different interpretation to this principle. We hereby give you a brief overview of some recent developments in the case law of the ECtHR and the ECJ.READ MORE

#22: A sledgehammer to fight tax fraud?

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Is the Dutch government using a sledgehammer to crack a nut in the fight against tax evasion and tax fraud? In lawlunch#13  we discussed the upcoming tax measures which were announced by the Dutch state secretary of finance concerning the prevention of tax evasion and tax fraud. One of the announced measures that especially caught our eye was the abolishment of voluntary disclosure. We discussed the implications of the abolishment in lawlunch#19. The abolishment however seems to be more extensive than expected; it also impacts the protection from criminal liability after voluntary disclosure. Furthermore, the state secretary announced a measure that enables authorities to publish administrative penalties imposed to so call professional facilitators, such as tax advisors and lawyers. So what is changing? And what is the current state of affairs?

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#21: Presumed guilty unless proven innocent?

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The presumption of innocence is a basic principle in the criminal law system. It is based in article 6 (2) of the European Convention of Human Rights. It states that ‘everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law’. The presumption of innocence dictates that the burden of proof lays with the prosecuting authority. This also entails that in principle the right to remain silent cannot be used against you. However, In Dutch case law we see a development – especially in relation to money laundering – that remaining silent can be held against you. Are suspects nowadays presumed guilty unless proven innocent? Does the presumption of innocence no longer exist?

The Dutch Supreme Court is quite clear on the fact that using the right to remain silent by a suspect cannot be used as evidence. The Supreme Court repeated its earlier ruling of 1997 in its decision of 16 September 2014: the circumstance that a suspect refuses to give a statement or refuses to answer a certain question cannot be used to proof the suspicion. The silence of the suspect can be used in elaborations on the evidence if the suspect did not give a reasonable explanation for a circumstance which in itself or in relation to the further evidence can be considered as a reason for the crime. The Dutch Supreme Court finds itself in good company on this matter. The European Court of Human Rights is also strict when it comes to the prohibition to use the fact that the suspect used his fundamental human right to remain silent as evidence. In this respect for instance the cases Murray against the United Kingdom and Telfner against Austria are interesting.

 

The possibility to use the ‘silence’ of the suspect is mostly used in money laundering cases in the Netherlands. As explained in Lawlunch #09 the money laundering jurisprudence shows who committed the crime from which the money originated or at what moment or where does not have to be proven. If ‘there is no other explanation possible that the source of an object is a crime or if it is ‘common knowledge’ it is sufficient to come to a conviction. The circumstances on which it is based that the objects derived from a crime vary greatly. As soon as money laundering typologies are at stake an explanation can be asked from the accused about the source of the money. This statement has to be concrete, verifiable and not beforehand unreliable. If the suspect does not give a verifiable explanation for the heritage of the money the ‘circumstantial’ evidence is enough to come to a conviction.If the explanation of the suspect is concrete, verifiable and not beforehand unreliable the prosecutors office has to investigate this explanation in order to further substantiate their suspicion. If the prosecutor fails to do so the suspect needs to be acquitted.

The foregoing thus means that the suspect is ‘forced’ to not use his right to remain silent in money laundering cases, if the circumstances need an explanation. The Dutch Supreme Court allows this to happen. Is this a breach of the right to remain silent? Or is this a breach of the presumption of innocence?

In this respect the case of Zschüschen versus Belgium  on which the European Court on Human Rights decided on 2 May 2017 is interesting. The suspect in this case, Mr. Zschüschen is convicted of tax fraud in the Netherlands. The European Court of Human Rights was to decide upon the question whether not giving a statement while he was suspected of money laundering was a breach of the presumption of innocence. The suspicion related to five transactions of in total € 75.000 Mr. Zschüschen made on a Belgian bankaccount. These transactions were reported by the bank as ‘unusual transactions’. These reported ‘unusual transactions’ in combination with the fact that no income was known of mr. Zschüschen created a suspicion of money laundering. In that respect Mr. Zschüschen was asked were the money came from. He stated that he earned this money but he refused to give the name(s) of his employee(s). The Belgian Court convicted Mr. Zschüchen for money laundering, the fact that he did not give a concrete clarification on the source of the money was used to support the indirect evidence. The court also takes into account that Mr. Zschüschen has a criminal record with drug related crimes and that there is no known income of him in the Netherlands, were he lives.

The question before the European Court of Human Rights is whether this burden of proof on the suspect in these circumstances breaches article 6 of the European Convention of Human Rights. The European court judges that there is sufficient indirect evidence in order to require a statement on the source of the money. If this statement is not given, this absence of a statement is allowed to be used support of other (sufficient) indirect evidence. The European Court however emphasizes that using the right to remain silent as such cannot be used as evidence. Hence, there has to be enough indirect evidence in order to trigger the requirement for the suspect to give an explanation. Not giving an explanation only supports the indirect evidence that the money has a criminal origin.

Returning to the questions raised in the introduction of this Lawlunch; yes, the presumption of innocence still exists. The defence however has to be very critical towards the indirect evidence presented in order to avoid that the presumption of innocence would be breached. Only if there is enough indirect evidence when it comes to a suspicion of money laundering that the money origins from a crime it is not a breach of article 6 of the European Convention if the absence of an explanation on the origin of the money is used as a circumstance which supports the indirect evidence.

In our opinion the defence has to be very critical on the indirect evidence the prosecutors service presents. Is this evidence sufficient to require an explanation of the suspect? It is up to the defence to assist the judge in assessing the indirect evidence in these kind of cases.

Do you have any questions about this subject, are you confronted with a related issue and would you like to discuss this with us? Please feel free to contact us via boezelman@hertoghsadvocaten.nl and boer@hertoghsadvocaten.nl.

 

#20: ‘Fail to notify’ project and unusual transactions

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The Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (hereinafter: Wwft) entered into force on 1 August 2008. The Wwft implements the EU’s Third Anti-Money Laundering Directive in Dutch national law. The Wwft provides a set of measures to prevent the use of the financial system for money laundering or terrorist financing. An important element is that every institution subject to the Wwft should perform a client assessment. Whereas institutions must – in principle – comply with all client assessment measures, the intensity with which measures are applied may be adjusted to the risk posed by a certain type of client, relation, product or transaction. Another important measure is that a financial institution or other institution that, in a professional capacity or on a commercial basis, provides certain (financial) services identified by the law, must notify any unusual transactions to the Financial Intelligence Unit Nederland  (FIU). Unusual transactions may be identified using the so-called list of indicators. But what happens if you fail to notify an unusual transaction to the FIU Nederland?READ MORE

#19: The Netherlands discards voluntary disclosure?

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The (demissionairy) state secretary of finance announced on 12 July 2017 that he wants to discard the voluntary disclosure from 2018 onwards. This announcement follows his letter to the government of 17 January 2017 in which the next steps in the ‘fight against fraud’ were announced. We refer to Lawlunch #13 for the announced measures. To keep you posted on the recent developments we will raise some legal questions which arise following these measures. Will the voluntary disclosure for instance be completely discarded from the law? And will it also affect the possibility of voluntary disclosure in order to avoid criminal prosecution for tax fraud?READ MORE

#18: What is the profit of money laundering?

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In Lawlunch #09 we gave a brief overview of the relevant jurisprudence regarding the crime of money laundering. Furthermore we stipulated that money laundering is a beloved ‘catch all’ charge of the Dutch Public prosecution. It is often used as a safety net to get an easy conviction. Since 1 January 2017 of this year new legislation on ‘simple money laundering’ has come to force and created even more opportunities for the prosecution. Another reason for the public prosecution to charge someone with money laundering is that they believe that it is an easy way to recover illicit assets. Recent jurisprudence however shows that the prosecution service has to step up it’s game in order to achieve that goal which might not be as easy as the prosecution would like it to be.  READ MORE

#17: White lies or swindle?

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Various classic criminal offences are getting more common in the area of fraud cases. Examples are charges of forgery or money laundering in a case which is in principle a tax fraud case. The wide coverage of those penal provisions make them a beloved weapon for the authorities to prosecute alleged fraud. If tax or another kind of financial fraud cannot be proven, these kind of provisions are a good back-up. In practice they are some sort of safety net. The new kid in town seems to be the charge of swindle. Jurisprudence shows that article 326 of the Dutch Penal Code is getting more and more popular. But when does an act qualify as swindle? The Supreme Court of the Netherlands has set some records straight by the end of last year by giving an overview judgement .READ MORE

#16: Fishing expeditions, or not?

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Transparency is a keyword these days. The banking secrecy is something that belongs to the past. All over the world information is exchanged between countries and tax authorities in order to counteract tax evasion. Also in the Netherlands, the Dutch Tax Authorities have intensified their efforts to prevent tax evasion. However, it is up for debate whether these authorities are overreaching their powers. In this article we take a closer look at two recent cases in which the Dutch Tax Authorities pushed the limits in their attempt to receive information from UBS and American Express by submitting information requests to foreign tax authorities. Although the Courts in these two cases allowed the information exchange, we have some critical notes.READ MORE

#15: Fundamental rights are not always stretched to fit the purpose

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Procedural errors are the thorn in the side of lawyers. At least, the (lack of) consequences of such errors. In Lawlunch #02 we explained how the system for compensation due to procedural errors works in the Dutch criminal law. Case law shows that it is an uphill battle to get procedural errors acknowledged and to receive compensation for these errors the government made during investigation. In tax law other criteria are applicable when it comes to procedural errors. These criteria and the interpretation by the courts are very refreshing.READ MORE

#14: International servers and data collection

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We can hardly live anymore without foreign storage- and communication services like Gmail, Box, OneDrive or Apple Icloud. These services use mostly cloud applications and in most cases the cloud is owned by a third party. These applications can be accessed all over the world through different devices. It is therefore possible and likely that part of the data is stored in another country than the country where the owner of the data lives. In the Netherlands it is questionable whether the public prosecutor can order or seize data which is accessible in the Netherlands but is stored abroad.READ MORE