Tim found this article in German here which indicates that a court in Liechtenstein has issued a temporary injunction prohibiting the Liechtenstein Revenue Authority from transferring FATCA-related data to IRS before September 18th 2015 — prior to which the court will consider whether the US-Liechtenstein FATCA “IGA” is compatible with the Liechtenstein constitution. [See also article in Liechtensteiner Vaterland].
An English translation provided by my Austrian colleague:
Volksblatt.li Wednesday, June 10, 2015
Liechtenstein Constitutional Court grants FATCA claimants more time
“VADUZ – Two Liechtenstein financial market service providers, who brought a lawsuit against various provisions of the FATCA Law, can catch their breath. For the time being, they are given a few months more time. However, this is not a fundamental decision.
As a temporary injunction until a ruling has been handed down on their constitutional complaint, however until latest September 18, 2015, the Constitutional Court has forbidden information reported by the two claimants to the Liechtenstein Tax Authority by June 30, 2015 to be forwarded by the Tax Authority to US authorities and other agencies, particularly the IRS.
This was reported on Wednesday by the law office of Wolff, Gstöhl & Bruckschweiger in Vaduz. As attorney Karl Mumelter explained to “Volksblatt,” the grounds for the decision by the Constitutional Court were essentially that the claimants would incur a disproportionate and irreparable disadvantage if the information reported to the Liechtenstein Tax Authority were to be forwarded to US authorities before the Constitutional Court ruled on the claimants’ constitutional complaint.
Partial victory for the claimants
In February of this year the two Liechtenstein financial market service providers filed a constitutional complaint with the Liechtenstein Constitutional Court against the law of December 4, 2014 concerning implementation of the FATCA Agreement.
Their complaint seeks to have – in their opinion – unconstitutional provisions of the FATCA Law repealed. In their complaint the claimants contend that the FATCALaw contains unconstitutional references to US Tax Law, is not litigable because of its complexity, and subjects the financial market service providers to disproportionate and unforeseeable costs.
At the end of May 2015 the two claimants filed with the Constitutional Court a supplementary motion for Grant of Temporary Injunction in this matter. The decision handed down by the Constitutional Court on June 9, 2015 grants this motion. The Constitutional Court granted the temporary injunction until September 18, 2015.
As Karl Mumelter further stated, the Constitutional Court feels that the temporary nature of the relief sought ensures, on the one hand, that no disproportionate disadvantages are incurred by the claimants and that the constitutional complaint is not ultimately robbed of its effect and, on the other hand, that the public interest in swift and efficient implementation of the FATCA Agreement is upheld. “It appears the Constitutional Court will conclude the matter of the constitutional complaint by September 2015,” said Mumelter.”
Although the actual claims in this Liechtenstein lawsuit, not explicitly disclosed in the article, might/probably differ from those in the Canadian Federal Court case, this would seem to be a “first” for any court action against implementation of a FATCA IGA — in any country.
[You can go to the German article and comment via Facebook.]
I had the same thought Bubblebustin’ but I have no idea which is the correct interpretation.
We really need a more accurate translation to know what this decision says or even who the complainants were.
@Bubblebustin
Kunden would be customers- but you could be right too.
I have done a lot of translations in my early years- mostly medical because I studied medicine. I like to be very precise. But this is a truly difficult article to translate! Amazingly so. I have no idea what these legal terms mean- which courts are involved for example.
@2terrified2sleep
*concentrate on the real tax evaders who live there with their limited resources*
So u are saying that immigrants to the US are the real tax evaders… I spoke to other immigrants in the US… when they say foreign… they don’t consider their home country foreign to them… People who leave one country to another… don’t get rid of everything when they leave nor they consider anything made out of the US the business of the US… taxes were paid where it was made… We should be careful in the use of those words… tax evaders… in the eyes of others… we all are… even though taxes… if required… where the money was made… was paid…
Abschluss does not mean union. You’re thinking of Anschluss. Abschluss means conclusion. Hence, straining my German from my one year lived there decades ago, the sentence at the end of the article states that the court intends to bring this matter to a conclusion by September.
Fun fact about Liechtenstein, for those seeking alternate citizenship: You can be naturalized as a citizen there in three ways:
1) Marry a local;
2) Live there for 30 years. Yes, thirty years;
3) Your neighbors vote for you. Yes, the law states that if you’re living there, your village or community can hold an official vote on whether or not to grant you citizenship. If it passes, then the results are handed to the Prince, who can then issue an edict. It pays to be nice to your neighbors!
From a US expat on Facebook who speaks German, lightly cleaned up by me:
Vaduz – Two financial participants from Liechtenstein who filed a suit against certain requirements of FATCA law can catch their breath. For now, they will gain a few months more time. Yet, this is not yet a fundamental decision.
The constitutional court is preventing the tax authority of Liechtenstein from sending data reported to the tax authority through the 30th of June, 2015 to the US authorities, specifically the IRS, until at least the 18th of September, 2015, as a measure for completing the individual legal procedure.
This was reported on Wednesday by the advocacy office of Wolff, Gstöhl & Bruckschweiger in Vaduz. As lawyer Karl Mumelter stated in the «Volksblatt», the constitutional report justified its decision that the complainants would be faced with disproportionate and irreparable disadvantage if the tax authority of Liechtenstein transferred the reported data to the US authorities before the constitutional court came to a conclusion on the case.
A partial victory for the complainants
Both Liechtenstein financial participants had filed a case against the law on the 4th of December, 2014, concerning the implementation of the FATCA agreement that the constitutional court of Liechtenstein had submitted, which would, in their view, seek unconstitional provisions in the FATCA law. The complainants stand by the position that the FATCA law contains unconstitional references to American tax law which, due to its complexity, would cause disproportionate and unpredictable costs to the financial market participants. Towards the end of May 2015, the two complainants in this case filed for the additional cancellation of provisional measures. With the current decision of the constitutional court on the 9th of June, 2015, the claim is accepted. The constitutional court has limited consideration until the 18th of September, 2015. As Karl Mumelter further stated, the constitutional court is ensuring with the limit, that the complainants will not suffer from a disproportionate disadvantage so that the individual complaint procedure won’t be stripped of its effectiveness, and also on the other side for the public interest of a quick and efficient implementation of the FATCA agreement. As such, Mumelter says that the constitutional court will complete the hearing of the individual legal procedure by September, 2015
@Polly re: “I like to be very precise”
This must be difficult – no?
I know it is for me. I tried to explain in great, precise, personal detail, how I was surprised and confused by that one and only one US passport I received (unwanted, unsigned, and unused) and got but ‘how could you not understand that’ from you. Now I understand.
@Barbara,
That translation was from SwissPinoy who used to post here quite often.
It appears that the plaintiffs may actually be financial institutions who are afraid of getting hit with the 30%. I could be wrong, but that may just be the case.
I am looking forward for the first 30% hammer to fall and watching how fast money flies out of US investments.
@Whitekat
I dont even understand the english translation!!!
The plaintiffs are individual persons, not FFIs, and the law suit pertains only to these 2 persons and is not of general character against FATCA resp. the IGA. It will be interesting to see how this plays out. If they win, it could (and should) spark a lawsuit against the IGA. It would have indeed been interesting to learn what nationalities the plaintiffs have, but unfortunately it’s not mentioned in the article.
The Liechtenstein Courts publish “selected” decisions at this website. This decision, however, has NOT been published:
http://www.gerichtsentscheide.li/
These two official websites, as expected, also do NOT contain any mention of this court case:
Liechtenstein Law Gazette: (Landesgesetzblatt)
https://www.gesetze.li/LGBL.jsp
– The Liechtenstein FATCA law was published here.
Liechtenstein Official Gazette: (Amtsblatt)
https://apps.llv.li/Amtsblatt/kundmachung/displayAct
– This gazette contains ordinances, legal notices, etc.
Liechtenstein’s “Vaterland” newspaper has a similar article on the court’s provisional decision in favor of the plaintiffs. It notes that the decision gives the plaintiffs more time so that their individual court cases can be decided before the FATCA data is allowed to be transmitted to the IRS:
http://www.vaterland.li/liechtenstein/politik/Ein-erster-Erfolg-fuer-die-Klaeger;art169,137098
The Vaterland article says that the basis for the complaint is that its complexity is unjustified.
For that decision to be implemented somewhere else, there would need to be a bank that would agree with that opinion enough to pursue it.
@Mark Twain
“The Vaterland article says that the basis for the complaint is that its complexity is unjustified.”
Sorry, that’s not correct. ‘nicht justiziabel’ doesn’t mean ‘unjustified’, but rather not justicable / not ligitable in a court of trial.
The original statement is:
“Die Beschwerdeführer haben dabei insbesondere geltend gemacht, dass das Fatca-Gesetz verfassungswidrige Verweisungen auf US-amerikanisches Steuerrecht beinhalte, aufgrund seiner Komplexität nicht justiziabel sei und unverhältnismässige und unvorhersehbare Kosten bei den Finanzmarktteilnehmern verursache.”
They’re presenting 3 reasons for the litigation against the FATCA legislation in Lichtenstein(!), as follows. For clarity, I’ve numbered the reasons.
“The appellants have claimed, in particular, that the FATCA legislation 1) contains unconstitutional references to US american tax law, 2) due to its complexity is not justicable and 3) causes disproportionate and unforseen costs to financial market participants.
@notamused
So basically they are saying that certain elements of FATCA are not constitutional-meaing the AMERICAN constitution?
@Polly
No, it’s to be seen from Lichtenstein’s perspective. So they’re saying it’s against Lichtenstein’s constitution to reference US american tax laws in a Lichtensteinian law. It’s a very good argument. No country should be passing laws which are based on foreign laws!
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@ U.S.Foreign Person
No…I would never say that poor immigrants who have bank accounts in their original countries are tax evaders!!!! I meant that since the irs will have even less money this coming year that they should concentrate their budgets on catching homelanders who are actually evading taxes by committing crimes. For instance the person who worked at the irs and filed a bunch of fake returns so she could get refunds!! That was in the news a couple of weeks ago. No one who has an undeclared bank account should EVER be socked the penalties they are giving out! Especially since interest rates are .001
@2terrified2sleep
The corruption within the IRS makes them the last people who should accuse & judge people of wrong doing… Slowly but surely… foreign countries are moving out of the sphere of the US control… US seems to think their laws are the only laws… their policies must be enforced in other countries… How long do u think foreign countries will put up with that BS… By the time the US wakes up… the boat will be gone… they will be standing there with a stupid look on their faces… with… hey… what happen… it will be too late…
@Barbara
A Grundsatzentscheidung could also be a constitutional decision. I.e. the delay itself was not based on a decision about the constitutionality of the issue.
The term ‘Individualantrag’ does seem to be used for persons, but corporations can be legal persons.
@notamused
Just saw this. ABSOLUTELY!
@US_Person_Foreigner
Maybe it’s cultural. I suspect that the U.S. expects a more immediate, in-your-face sort of reaction than they would get from people in many countries. Many cultures are more restrained, have longer memories and believe that revenge is a dish best served cold.
@Publius…..you forgot that many other Nations and Peoples still actually trust the USofA.
However, this former pat is working at changing that as I have very little nice to say about that place.
The Liechtenstein court ruled that banks foolish enough to provide services to U.S. citizens must be willing to pay the price for doing so. It further ruled that FATCA sufficiently defines how U.S. citizens are to behave and that the purpose of FATCA is to enforce U.S. double-taxation without providing reciprocity.
«The State Court dismissed the individual complaints of two Liechtenstein financial center participants, whose appeal aimed, in their view, at the unconstitutional legal provisions in FATCA law (the Volksblatt reported on 11 June 2015). As attorney Dr. Karl Mumelter (Law firm Wolff, Gstöhl & Bruckschweiger) announced, the verdict from September 18, 2015 is valid and final. Accordingly, the State Court took the view that international financial service providers cannot escape US FATCA legislation, even without the introduction of the contested FATCA law. Yet, the assistance of the authorities of Liechtenstein substantially reduces the resulting financial problems. The State Court did not see a de facto advantage for larger market participants in the sense that only market participants with appropriate administrative resources could meet the FATCA provisions. The State Court further also noted that Final Regulations based on US FATCA legislation have no direct effect in Liechtenstein and that changes in the provisions of the US FATCA legislation only have a legal effect when explicitly incorporated into Liechtenstein law. The State Court had called for the Liechtenstein authorities to systematically take this into account. With absence of a direct impact, the Supreme Court rejected an unconstitutional reference to the foreign law. In the case where the details can indeed be linked to U.S. law, this only occurs within the legal framework of a permissible choices for those subject to the legislation, for example, in relation to the vastly unproblematic and bare execution/technical norms. The State Court dismissed problems due to possible language barriers as a result of US origin law provisions. The court holds the penal provisions contained in the FATCA law as being sufficient, defining how the legal subjects are, according to the view of the State Court, to behave. so that the State Court’s opinion for the legal subjects could be identified, how they should behave. However, the court stated that due to the complexity of FATCA, the principle of proportionality needs to be observed. In relation to the costs incurred by FATCA, the State Court referred market participants to the causer pays principle: whoever opened a special source of danger, must also contribute to monitor the same necessary costs. The State Court dismissed the implementation of reciprocity. On this, it made it clear that FATCA serves American tax interests alone, leaving real reciprocity of rights and duties out of the question. Nevertheless, the State Court noted that the freshly validated FATCA-Law was only subject to a largely abstract examination and that it is therefore possible for the Court to reach a different conclusion in a re-examination of the FATCA provisions.»
http://wgb-law.li/de/news/fatca-klage-abgewiesen
https://translate.google.se/translate?sl=de&tl=en&js=y&prev=_t&hl=sv&ie=UTF-8&u=http%3A%2F%2Fwgb-law.li%2Fde%2Fnews%2Ffatca-klage-abgewiesen&edit-text=
Wow…I’m speechless! “Banks foolish enough to provide services to US citizens must be willing to pay the price for doing so”….where does that leave us poor expats?? I just don’t know if it can get any worse! All I can say is “I want out asap”
@All
Has there been a final decision on this? I don’t find anything…