EHRM, 04-10-2022, nr. 58342/15

In accordance with Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and Article 27 of the Tax Treaty between Belgium and the Netherlands of 19 October 1970, the Dutch Tax and Customs Administration (Belastingdienst) in 2005 obtained from their Belgian counterparts information concerning bank accounts held by residents of the Netherlands with X Bank in Luxembourg that included balances of those accounts on 21 December 1994, 5 September 1996 and 28 November 1996. The account information had been stolen from the bank. It had been found in Belgium in the course of a criminal investigation.

On the basis of that information, the Dutch Tax and Customs Administration identified the applicant as one of the account holders.

Luxembourg had bank secrecy laws at the relevant time. These prevented the passage by lawful means of information relating to accounts held with banks based in that country to foreign tax authorities except with the cooperation of the account holders themselves.

On 7 March 2007 the Tax Inspector wrote to the applicant that an investigation into Dutch residents holding foreign bank accounts had been launched and that it had appeared that the applicant was holding or had held one or more bank accounts abroad which he had not accounted for in his income tax (inkomstenbelasting) and capital tax (vermogensbelasting) returns. The applicant was requested to declare any past and/or present foreign bank accounts held by him after 31 December 1994 on a form, entitled ‘Declaration (verklaring); Bank account(s) held abroad’, and to complete a second form, entitled ‘Statement (opgaaf); Bank account(s) held abroad’, both of which were attached to the Tax Inspector's letter. The second form indicated, inter alia, which documents the applicant was to provide, in addition to which the Tax Inspector in his letter also requested the applicant to submit copies of all bank statements of the account(s) concerned covering the period between 1 January 1995 and 31 December 2000. He was informed that, pursuant to section 47(1) of the General State Taxes Act (Algemene wet inzake rijksbelastingen; hereinafter ‘the Act’), he was obliged to provide the information and materials requested (inlichtingenplicht; see paragraph 33 below).

On 28 March 2007 the applicant, through his counsel, replied in writing. As relevant to the case before the Court, he observed that it was ‘sufficiently known’ that letters such as that of 7 March 2007 would be followed by tax adjustments (navorderingsaanslagen) as well as tax fines. Since, consequently, Article 6 of the Convention under its criminal head was applicable to the latter, he invoked the privilege against self-incrimination relying on Saunders v. the United Kingdom (17 December 1996, Reports of Judgments and Decisions 1996-VI) and J.B. v. Switzerland (no. 31827/96, ECHR 2001-III), pointing out that the information in issue was such that the Tax and Customs Administration could not obtain it without his cooperation, and noting that it was not at all established that that information even existed. He informed the Tax Inspector, accordingly, that ‘in the given circumstances’ the request for information would not be complied with.

On 27 June 2007 the Tax Inspector sent to the applicant's spouse a letter in the same terms, and with the same attached forms, as the one that had been sent to the applicant on 7 March 2007. On 13 July 2007 the applicant's spouse, through her counsel, replied in the same terms as the applicant had in his letter of 28 March 2007.

On 25 July 2007 the Tax Inspector informed the applicant and his spouse that, as they had failed to submit the information and materials requested and had thus failed to comply with their obligations under section 47 et seq. of the Act, tax adjustments for income tax and/or capital tax would be issued in the course of the year on the basis of estimated figures.

On 22 November 2007 the Tax Inspector wrote to the applicant informing him that he possessed data from which it appeared that one or more bank accounts in the names of the applicant and his spouse were being or had been held with X Bank in Luxembourg; on the basis of these data it had been established that the applicant and/or his spouse were or had been (joint) holders of the account(s). The data in the Tax Inspector's possession also included balances of the account(s) on different dates in the period 1994 up to 1996. He notified the applicant of his intention to increase the applicant's taxable income for 1995 on the basis of estimated returns on investments and on interest rate figures obtained from the national statistical office, Statistics Netherlands (Centraal Bureau voor de Statistiek), and to increase his capital on 1 January 1996 on the basis of an estimate having regard to the average increase of the balances on accounts held by a large number of account holders at X Bank in Luxembourg between 1994 and 1996. The Tax Inspector would then issue corresponding tax adjustments for income tax and for contributions to national social security schemes (premieheffing volksverzekeringen) in respect of 1995 and for capital tax in respect of 1996 and impose statutory defined tax fines of 100% of these tax adjustments without remission (kwijtschelding) for having wilfully acted in breach of section 47 of the Act. The Tax Inspector referred to section 18(1) of the Act as the legal basis for the imposition of these fines and to paragraph 21(3) of the 1993 Regulation on tax fines (Voorschift administratieve boeten 1993) as regards the determination of the amount of the fines (see paragraphs 35–36 below). The applicant was further informed of the consequences if he were yet to comply with the obligation pursuant to section 47 of the Act to provide the information requested; if he did so before the tax adjustments were issued, the fines would, in principle be set at 50% of the amount of the tax adjustment. Should he file an objection (bezwaar) against the tax adjustments issued but fully cooperate pending the objection phase of the proceedings, the fines could be mitigated to 75%.

The applicant was invited to submit a reaction before 1 December 2007.

On 28 December 2007, having noted that the applicant had not responded to the letter of 22 November 2007, the Tax Inspector issued the announced income tax/social security contributions adjustment in respect of 1995 of 10,142 Netherlands guilders (NLG) plus NLG 4,035 for interest on tax arrears (no. 0303.37.033.H.57) and a capital tax adjustment in respect of 1996 of NLG 1,928 plus NLG 726 for interest on tax arrears (no. 0303.37.033.K.67), each increased with a tax fine of 100% of the adjustments without remission (that is, NLG 10,142 (about 4,600 euros (EUR)) in respect of 1995 and NLG 1,928 (about EUR 875) in respect of 1996).

On 21 January 2008 the applicant lodged an objection against the tax adjustment issued in respect of 1996, based on the lack of convincing evidence that he had in fact held a bank account in Luxembourg. He also challenged the tax fine imposed, arguing that since the tax adjustment should be declared void, the fine should be as well. He further objected to the Tax Inspector's conclusion that he had wilfully acted in breach of section 47 of the Act.

On 20 March 2008 the applicant's counsel was allowed to see redacted documents purporting to prove the existence of the bank account or accounts in issue.

On 26 March 2008 the applicant also lodged an objection against the tax adjustment issued in respect of 1995 — which had reached him after the adjustment in respect of 1996 — and against the tax fine imposed, referring to the grounds of his objection lodged on 21 January 2008. In addition, he challenged the lack of evidentiary value of the documents relied on by the Tax Inspector given that the provenance of these documents was unclear and the documents themselves had been so heavily redacted as to be meaningless.

On an unspecified date the State (the Tax and Customs Administration Directorate-General of the Ministry of Finance) summoned the applicant to appear before the provisional measures judge (voorzieningenrechter) of the Civil Law Section of the Regional Court (rechtbank) of The Hague in summary injunction proceedings (kort geding). The purpose was to obtain an order for the applicant to disclose information concerning bank account(s) held abroad after 31 December 1995 and submit documents relating to such bank account(s) in respect of the years running from 1 January 1996 up to and including 1 January 2000. The State based its claim on the taxpayers' duty to provide information to the Tax Inspector under section 47 of the Act (see paragraph 33 below).

Having heard the parties on 19 November 2008, the provisional measures judge gave judgment on 27 November 2008. He ordered the applicant to state on the form ‘Declaration; Bank account(s) held abroad’ (see paragraph 8 above) if he (had) held bank accounts abroad after 31 December 1995 and, if so, to provide information about those accounts by answering the questions on the form ‘Statement (opgaaf); Bank account(s) held abroad’ (ibid.) and to provide the documents indicated on that form, including copies of all bank statements of the account(s) concerned covering the period between 1 January 1996 and 31 December 2000. The applicant was to comply with the order within fourteen days from the day on which the judgment was served on him and on pain of a penalty payment (dwangsom) of 5,000 euros (EUR) for each day or part of a day thereafter that he failed to comply, to a maximum of EUR 50,000. The judgment was provisionally executable (uitvoerbaar bij voorraad).

The applicant did not appeal. On 9 December 2008 his counsel sent to the counsel of the State documents received from the applicant and his wife, which consisted of the forms that had previously been sent to them by the Tax Inspector (see paragraphs 8 and 10 above) and in which they declared that they had held a bank account together at X Bank in Luxembourg after 31 December 1994. Bank statements and portfolio summaries relating to that account were also submitted.

In its judgment of 18 October 1989 in Orkem v Commission (C-374/87, EU:C:1989:387) concerning European competition law, the Court of Justice of the European Communities (‘the CJEC’, which on 1 December 2009 became known as the Court of Justice of the European Union (CJEU)) examined the powers of the Commission to obtain information from an undertaking4. under investigation. In so far as relevant, it held as follows:

The European Union courts confirmed this case-law on many occasions, whilst also acknowledging the relevant developments in the case-law of this Court which took place after the Orkem judgment. Thus, the CJEC referred for example to Funke, Saunders and J.B. v. Switzerland (all cited above) in its ruling of 15 October 2002 in Limburgse Vinyl Maatschappij NV and others v Commission (joined cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P, EU:C:2002:582, § 274) and held that, for the privilege against self-incrimination to apply, ‘both the Orkem judgment and the recent case-law of the European Court of Human Rights require, first, the exercise of coercion against the suspect in order to obtain information from him and, second, establishment of the existence of an actual interference with the right which they define’ (ibid., § 275). In this judgment the CJEC also clarified that the right of an undertaking, as acknowledged in Orkem, not to be compelled by the Commission to admit their participation in an infringement of European competition law, means that, in the event of a dispute as to the scope of a question, it falls to be determined whether an answer from the undertaking to which the question was addressed was in fact equivalent to the admission of an infringement, such as to undermine the rights of the defence (ibid., § 273).

On 28 April 2010 the General Court of the European Union held that an undertaking could not be recognised as having an absolute right of silence. It considered that the mere fact of an undertaking being obliged to comply with the Commission's request for the production of documents already in existence could not constitute a breach of the principle of respect for the rights of the defence or impair the right to fair legal process, which offered, in the specific field of competition law, protection equivalent to that guaranteed by Article 6 of the Convention. Moreover, where an undertaking was asked to describe the object, course, results and conclusions of meetings in which it had participated, when it was clear that the Commission suspected that the object of those meetings was to restrict competition, a request of that nature was of such a kind as to require the undertaking concerned to admit its participation in an infringement of the Community competition rules, so that the undertaking was not required to answer questions of that type. In such a situation, undertakings could not claim that their right not to incriminate themselves had been infringed when they had nevertheless, voluntarily, replied to such a request (see Amann & Söhne and Cousin Filterie v Commission, T 446/05, EU:T:2010:165, §§ 326 and 328-29).

The Orkem case-law was most recently confirmed and clarified by the CJEU in its judgment of 28 January 2021 in Qualcomm (C-466/19 P, EU:C:2021:76). It found that in so far as the case-law arising from Amann & Söhne and Cousin Filterie v Commission (cited above) ruled out that the mere fact of being obliged to produce documents already in existence could infringe the rights of defence, that case-law could not be interpreted, a contrario, as meaning that any request for the production of a document which could not be regarded as ‘already in existence’ necessarily infringed those rights, in particular the right to avoid self-incrimination (Qualcomm, cited above, § 146). An undertaking would only be allowed to evade the obligation to communicate all necessary information where it was compelled to provide answers which might involve the admission on its part of the existence of an infringement (ibid., § 147).

In addition, in a judgment of 2 February 2021 — which concerned answers to questions to be provided rather than documentary material and is therefore of less relevance in the context of the present case — the Grand Chamber of the CJEU addressed the privilege against self-incrimination for the first time in the context of a natural person (Consob, C-481/19, EU:C:2021:84). With reference to this Court's judgments in Saunders (cited above) and Ibrahim and Others v. the United Kingdom ([GC], nos. 50541/08 and 3 others, 13 September 2016), the CJEU held that the right to silence would be infringed where a suspect is obliged to testify under threat of sanctions and either testifies in consequence or is sanctioned for refusing to testify (ibid., § 39). It considered that the right to silence could not be confined to statements of admission of wrongdoing or to remarks which directly incriminate the person questioned, but that it also covered information on questions of fact which may subsequently be used in support of the prosecution and may thus have a bearing on the conviction or the penalty imposed on that person (ibid., § 40). The CJEU specified that its case-law concerning the obligation for undertakings, in the framework of proceedings which may lead to the imposition of sanctions for infringements of EU competition rules, to provide information which may be used to establish the existence of anti-competitive conduct (such as Orkem, see paragraph 40 above) could not be applied by analogy in the determination of the scope of the right to silence of natural persons who are the subject of proceedings for an offence of insider dealing (ibid., §§ 46 and 48).

The applicant complained under Article 6 § 1 of the Convention that documents concerning a foreign bank account had been obtained from him under coercion for use in tax proceedings in which tax fines were imposed on him, in disrespect of the privilege against self-incrimination. Article 6 § 1 of the Convention reads as follows:

The Government contested that argument.