Interesting Council Of Foreign Relations article on extradition and various alternatives. Note the difference between "covered offenses" and "dual criminality". https://t.co/glOxu13Fm3 pic.twitter.com/bdiVMW7BJB
— U.S. Citizen Abroad (@USCitizenAbroad) May 29, 2020
Part 6 of this series of posts discussing extradition treaties ended with
“Big picture view: Leaving aside the legal technicalities and the nattering over matters of form/substance, etc … It seems clear that from a US perspective the purpose of an extradition treaty is to export US law to other lands. Since Canada is the United States’ biggest trading partner, doesn’t it seem reasonable that Canada should be the export destination of the largest number of US laws?”
This understates the problem. Extradition treaties are being used to transport individuals to the United States, who may have never set foot in the United States and who may have violated US laws of extraterritorial application. In some cases (the UK), the individual may not have violated the law of country except the law of the United States. Countries that are “partners” to US extradition treaties, have become unpaid bounty hunters in the service of the United States.
After 911 …As per President George W. Bush in 2001:
"Whether we bring our enemies to justice or justice to our enemies, justice will be done." https://t.co/FnWAGiwkgK
— U.S. Citizen Abroad (@USCitizenAbroad) June 13, 2020
"Whether we bring our enemies to justice or bring justice to our enemies, justice will be done." – President George W. Bush https://t.co/Dlgs6p0ac4
— U.S. Citizen Abroad (@USCitizenAbroad) June 8, 2020
Largely motivated by the events of 911, in 2003 the United States entered into an Extradition Treaty with the UK, that both:
– allowed (but did not require) for extradition without dual criminality – Article 2; and
– included no prohibition on extradition based on citizenship – Article 3
To put it simply, in simple terms, the US UK extradition treaty requires the UK to extradite to the United States, any individual – regardless of where the crime was committed – found in UK territory.)
The purpose of modern US extradition treaties – as per Meng Wanzhou and others – is to bring “enemies to US justice”.
The path of bringing enemies to US justice proceeds through the following steps:
First, define conduct as a crime according to a US law (possibly even inventing the crime in a manner that is reminiscent of “Show me the man and I’ll show you the crime”). For example, it is a crime to violate US sanctions against Iran.
Second, identifying components of the conduct of the crime as smaller, component or “included” crimes. (By committing the larger crime of evading sanctions against Iran, the accused made a fraudulent statement to a bank. This constitutes the crime of fraud.)
Third, identifying that Canada also has a crime of fraud.
Fourth, base the extradition request on alleging that that the accused committed the US crime of fraud which is also an offence in Canada.
Fifth, noting the irrelevancy of the fact that the alleged crime was not committed in either Canada or the United States. (In this case the crime was alleged to have been committed in Hong Kong.)
Bottom Line: The United States is really using extradition treaties to conscript foreign governments into capturing and turning people over to the United States. To put it simply: Canada and other countries who sign extradition treaties with the United States, have agreed to become “bounty hunters” for the United States of America. (Of course, in a manner that is remeniscent of the FATCA IGAs, as demonstrated by the Anne Sacoolas case, the United States may not reciprocate.)
To be specific: The lesson from the Meng Wanzhou ruling is that, any individual with a physical presence in Canada, is theoretically subject to extradition to the United States (regardless of where the crime was committed)!
Where might this lead?
The purpose of this post is to explore:
1. How the move from “listed offences” to “dual criminality” has greatly expanded the use of scope and range of activities that are within what is allowed/required by extradition treaties; and
2. How the move to “dual criminality” has and will likely continue to allow for extradition of individuals charged with fiscal offenses (including tax and form crimes).
The evolving nature of “extradition treaties”: The 1988 Protocol To The Canada US Extradition Treaty – Moving From Listed Offences To Dual Criminality
In an earlier post I explored the basics of Canadian extradition law noting that the Canada US extradition treaty was signed in 1974. Treaties are amended through “protocols”. An amending protocol to the Canada US extradition treaty took place in 1988.
In 1988 President Bush submitted the following protocol to the US Senate for approval:
With a view to receiving the advice and consent of the Senate to ratification, I transmit herewith the Protocol signed at Ottawa on January 11, 1988, amending the Treaty on Extradition Between the United States of America and Canada, signed at Washington on December 3, 1971, as amended by an exchange of notes on June 28 and July 9, 1974. I transmit also, for the information of the Senate, the report of the Department of State with respect to the protocol.
The protocol amends the Extradition Treaty Between the United States and Canada, signed at Washington on December 3, 1971, as amended by an exchange of notes on June 28 and July 9, 1974. It represents an important step in improving law enforcement cooperation and combatting terrorism by excluding from the scope of the political offense exception serious offenses typically committed by terrorists; e.g., murder, manslaughter, kidnapping, use of an explosive device capable of endangering life or causing grievous bodily harm, and attempt or conspiracy to commit the foregoing offenses.
The protocol also will help to improve implementation of the current extradition treaty in several other respects. Most significant, the protocol substitutes a dual criminality clause for the current list of extraditable offenses, so that, inter alia, parental child abduction and certain additional narcotics offenses will be covered by the new treaty.
I recommend that the Senate give early and favorable consideration to the protocol and give its
advice and consent to ratification.
Extradition For Fiscal Offenses – Including Possibly For Tax And Form Crimes
It is obvious that a movement away from “listed offenses” to “dual criminality” vastly widens the range of offenses for which extradition is possible. In 2003, Washington lawyer Bruce Zegaris wrote a fascinating article in which he analyzed the possibilities available for extradition for tax offenses. Excerpts include:
VI. INDIVIDUAL U.S. EXTRADITION TREATIES WITH RESPECT TO TAX CRIMES
U.S. extradition treaties concluded prior to 1970 do not permit extradition for fiscal offenses (e.g., tax evasion or exchange control) other than those that permit extradition for some customs offenses, or directly or indirectly authorize extradition for smuggling. 3 In mid-1970s, however, an important policy shift occurred in the United States and other countries,94 which made fiscal offenses extraditable.
Since the 1970s, all U.S. extradition treaties (except the new treaties with Switzerland and Ireland), 9 adopt the “straight dual criminality” or “straight dual criminality for federal offense” methods for defining extraditable offenses. They authorize extradition from the United States for fiscal offenses to the extent that the requested offense meets the dual criminality requirement.
Additionally, many of the treaties using the list method for state offenses plus the straight dual criminality method for federal offenses cite willful tax evasion as an extraditable offense.96 Several of the treaties also list exchange control offenses as extraditable offenses.97 Some recent U.S. extradition treaties explicitly provide that an offense will be extraditable if it relates to taxes, customs duties, currency control, or import and export of commodities, whether or not the laws of the requested state provide for the same kinds of controls • on currency • • or the import 98 or export of the same kinds of commodities. At least one extradition treaty authorizes the requested state to refuse extradition for offenses in connection with taxes, duties, customs, and exchange control if its competent executive authority “determines that extradition for any such offense would be contrary to the public police or other essential interests of” that country.
Clearly, most OECD governments and many other governments will include tax offenses in their extradition arrangements. Most regional organizations that engage in arranging the preparation of extradition treaties that are opened for signature and ratification include tax offenses by optional protocol.
Extradition From Canada For Tax and Form Crimes
In describing the 1988 protocol to the Canada US extradition treaty, he states …
Article 1 of the 1988 Protocol 5 to the 1974 Canada-U.S. Extradition treaty1°6 replaces Article 2 of the treaty. Article 2 had obligated a requested state to extradite for a list of offenses, none of which included fiscal offenses. Article 1 provides that under new Article 2(1) a requested state must extradite for conduct that constitutes an offense punishable by the laws of both states by imprisonment or other form of detention for a term exceeding one year or any greater punishment. In addition, new Article 2(2) requires a requested state to extradite notwithstanding conduct such as interstate transportation, use of the mails, or other facilities affecting interstate or foreign commerce. The requested state is also required to establish jurisdiction and form part of the offense in the United States or “that it relates to taxation or revenue or is one of a purely fiscal character.” Hence, both countries are obligated to extradite persons to the other country for a broad number of tax cases (e.g., pure tax cases, such as cases on income, estate, or excise, or general tax-related crimes, such as customs, making false statements or oath in the course of filing a return, or falsely answering inquiries of a revenue agent).
The United States and Canada have a rich relationship when it comes to tax enforcement cooperation. The two countries have simultaneously conduct criminal and civil audits. Revenue authorities have regular meetings to discuss outstanding tax cases. In a number of cases, the United States has prosecuted persons for evading Canadian excise tax, normally on alcohol or cigarettes. However, a split in the circuits exists as to whether the “revenue rule,”‘ °7 the common law policy that one country does not enforce a foreign country’s revenue judgments, controls U.S. enforcement of Canadian tax crimes. Indeed, Canada’s excise taxes on alcohol
and tobacco products have been so comparatively high that Canadians have bought U.S. products in order to try to defraud the Canadian Government of tax. The incidence of evasion of these taxes is so high in Canada that a thriving underground 108 economy has developed. One difficulty U.S. prosecutors experienced in Canada is the refusal of Canadian courts to accept double hearsay as admissible evidence in extradition proceedings. 09
To be forewarned is to be forearmed …
Non-reciprocal FATCA agreement + non-reciprocal extradition treaty = a very ugly vision of something I thought was inconceivable — Canada sending US -deemed, US persons (for tax purposes only) over the border to face a kangaroo court and imprisonment for crimes against the US extraterritorial tax regime. Even if it’s “highly unlikely” to happen at this point in time, the unrelenting drumbeat of the imperial, forever-exceptional, sovereignty-stomping high and mighty commanders of the country which was polled as being the greatest threat to world peace, makes me raise “highly unlikely” to “well ya never know”.
This should make us double our efforts to oppose CBT/FBAR/FATCA/TT/GILTI (what’s next?) at every opportunity, with whatever means possible. Take inspiration from some Syrian villagers, armed only with rocks and led by one tall Syrian man, who recently faced down some heavily-armed US storm troopers. The trick is to find chinks in their armour. We certainly know they do not occupy the moral high ground.
FATCA is a “form” of extradition. It’s simply an “extradition” of information, which could be used for the future extradition of the individual. No, we are not there yet. But, this does explain why it’s important to recognize the danger. It’s important that ALL treaties be subject to public scrutiny before they are signed. It’s important to oppose FATCA and the extra-territorial definition of US tax residency now!