FPC, 07.04.2025, RR.2024.153, RR.2024.154
Facts
The Serbian authorities have submitted a request for mutual legal assistance in criminal matters to Switzerland as part of a tax fraud investigation. The Public Prosecutor's Office of the Canton of Geneva (MP-GE) granted the request and ordered the handover of documentation for two bank accounts, one held by the company A. LLC and the other by an individual, B.
A. LLC and B. appealed these closing decisions to the Appeals Chamber of the Federal Criminal Court. During the appeal proceedings, the Serbian authorities withdrew their request for mutual assistance.
Law
When a case becomes moot, the court strikes it from the docket and rules on the procedural costs. The decision on costs is made by taking into account the state of affairs existing before the event that ended the dispute (in this case, the withdrawal of the mutual assistance request).
The court conducts a summary assessment of the likely outcome of the dispute: costs are borne by the party who would likely have lost had the proceedings been carried through to completion.
In this context, the Court reiterates several principles of mutual legal assistance:
- Exculpatory arguments (relating to the merits of the charges in the requesting state) are inadmissible in mutual assistance proceedings.
- Mutual assistance is granted in cases of suspected tax fraud, defined broadly as deceitful conduct aimed at evading a significant amount (exceeding CHF 15,000).
- The right to invoke a violation of fundamental rights (art. 2 IMAC) is restricted: in principle, it does not belong to legal entities or to individuals residing outside the territory of the requesting state.
Application to the specific case
The withdrawal of the mutual assistance request by Serbia rendered the appeals of A. LLC and B. moot.
To rule on the costs, the Appeals Chamber examined the likely outcome of the appeals. It concluded that they would very likely have been dismissed for the following reasons:
- The appellants' arguments regarding the lack of any violation of Serbian tax law constituted exculpatory arguments, which are inadmissible in mutual assistance matters.
- The facts described by Serbia (a complex corporate structure and sham loans to evade taxes) prima facie met the criteria for tax fraud under Swiss law, thereby satisfying the requirement of dual criminality.
- The appellants could not validly invoke Art. 2 of the IMAC, as A. LLC is a legal entity and B. is domiciled in Italy.
- The other complaints, particularly regarding proportionality, would also have been dismissed.
Given that the appellants would likely have lost their case, they are responsible for bearing the costs of the proceedings.
Outcome
The Appeals Chamber joined the two cases, found that the appeals had become moot, and struck the case from the docket. It ordered the appellants to pay a joint and several fee of CHF 2,000.
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