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Their complaint seeks to have – in their opinion – unconstitutional provisions of the FATCA Law repealed.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.]
Looking for a German translator to confirm accuracy of translation.
Can you give the link in german?
Note that the EU likes to save money by using precendents from other countries. Hence, if something is not allowable in one country it is likely to be able to be considered such in another. If someone can acquire the actual court decision, it can be used to forward to the bar associations in all EU countries.
Polly, scroll over the english text and the original German will show.
Here is the German:
http://www.volksblatt.li/nachricht.aspx?id=91472&src=vb
Boy- that really is a shitty translation.
But I have heard of clients of banks in Switzerland who sued Switzerland to not hand their information over and the won too. I just don`t know how long that lasted. It sounds like in Liechtenstein it will only be temporary too- although the translation is so bad that one cannot understand the last paragraph.
There is a hitch there. Its complicated. Basically the 2 people who are suing say that they will have unforeseen negative effects if their information is given on. The courts are supposed to check what those unforeseen negative effects are – and here is the clincher….so that FATCA can be be implemented without problems ( or something along those lines….)
It says that these 2 people can breathe easier- that they were suing against certain aspects of FATCA…
Sorry- I can’t get it on a separate page and keep having to go back and forth. But I am trying to get the important bits here.
That the information should not be sent on the the IRS before a decision was made in another court ( Indivualantrag- whatever that is) because they could have irreversible and serious negative effects for the 2 people.
Mentioned in the complaint: causing undue and unforeseen costs.
Could Canada say that they will withhold the exchange of FATCA data until the US has like for like data available from the US? (which they will not as their banks are not required to ask all account holders their nationality).
That the implementation is unconstitutional and therefore against american tax laws…. and an unforseeable and unpredictable ( in its breadth) negative consequences would happen to them if allowed….
It says that the decision is not a policy changer but gives the people more time….
The article is very lawyer-jargon. Sorry I can’t do a better job- but I would need this side by side to translate it word by word and that would be tricky because it is so legalese.
I hope I got the jist of the matter. Some law was passed 4th December 2014- maybe that was IN Liechtenstein. This is what they are going against- which involves handing over their information – not only but especially to the IRS. They would suffer unforeseen negative consequences of unknown breadth. But it says this is not to get rid of FATCA- it is about aspects of FATCA. Seemingly the 2 people who sued might be biding for time, perhaps.
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Good news as far as it goes although it sounds that it still need to be fully digested.
@Mark, Liechtenstein is not part of the European Union. It’s only part of the European Economic Area.
Maybe this is happening because some Liechtenstein banks are listed on the “bad banks list”…50% penalty for ovdp and 150% penalty if people’s accounts get caught outside of it. Maybe there are people living there who are U.S. and have normal accounts down the street at these bad banks and would be hit by huge penalties even though they were not homelanders trying to hide money in havens…just normal people living their lives and banking and got caught with accounts in these banks that the US considers sneaky. Wow…that would really be the worst case scenario.
@2T2T
We shouldn’t assume- but Liechtenstein has always been known as a place to HIDE money. So it sounds to me like american citizens who have money hidden there and who don`t want to be outed. I mean- I doubt that they actually LIVE in Vaduz. LOL ( ya never know….)
EEA (EES) decisions could be passed to Norway for considerations.
I just read over on Foxnews that the republicans will probably cut the irs budget again this year. Maybe they will have so much to do between fatca and Obamacare and tax returns and so little manpower that they’ll leave us poor expats alone….and concentrate on the real tax evaders who live there with their limited resources……
@2T2T
I think they should take a close look at Delaware and Wyoming…
With my little German, the right German words for tax, contract, law, constitution, State Law Court, etc are appearing. Abschluss means union so my interpretation is that on Sept 2015 they’re going to have another hearing.
Ausgezeichnet or excellent as they say in German.
Every court case and the PR should entice other people to challenge FATCA in court. I reckon it’s a high roller who throwing money at the problem to either buy time or get the IGA trashed.
@Polly: I do not think it was two people who brought the case to the Liechtenstein court. I think it was two banks or financial institutions. I also think the court decision was made based on market competitiveness.
Those two factors make it different than our lawsuit but it is still good to see that a court somewhere in the world is willing to take a stand–at least temporarily–against FATCA.
I agree this loses something in the translation.
@Blaze – You’re correct I believe. The German word in the first paragraph, Finanzplatzteilnehmer or literally Finance Place Partaker would translate into some FFI type organization.
It’s almost certain the IRS will see FATCA more as a war with battles breaking out throughout the world’s legal systems.
http://www.jsmineset.com/
Also on this website read his article about the shift of economic power in the world. More people now live in the sphere of India to China to Japan down the Indonesia than the rest of the world combined. It’s no wonder the US is putting measures like FATCA in place because China is going to trash the petrodollar sooner that the US Government will admit.
Once petrodollar is relegated, the US is going to have to live within its means the first time since the Depression. Ouch!
@Blaze
zwei Finanzplatzteilnehmer
Good grief- what a word.
You might be right. It translates into “finance place participants”
“Financial place participants” could be bank customers, couldn’t it?