MALTA’S ADOPTION OF THE ‘CHAMBAZ

PRINCIPLE’

Robert Attard

Discussion

Recapitulation of what the case of Chambaz v. Switzerland was all about.

The adoption of the ‘Chambaz Principle’ in Case 160 of 2012 of the Court of Appeal decided on 25/2/15.

Malta Institute of Management

Chambaz v. Switzerland

(ECtHR Application no. 11663/04)

Facts of the Case (i)

Chambaz is a Swiss national who lives in Bermuda. He was the subject of a tax investigation which involved a number of companies registered in offshore jurisdictions.

The Swiss Tax Authorities asked Chambaz for information relating to his income which Chambaz refused to give. The Swiss tax authorities fined Chambaz for failure to provide information and Chambaz appealed.

While the appeal proceedings were pending the federal tax authorities filed fresh proceedings relating to tax evasion. Chambaz requested access to his investigation file but his request was refused.

Facts of the Case (ii)

Meanwhile, Chambaz lost his appeal. Chambaz filed a case in the European Court of Human Rights (ECtHR) alleging a number of human rights violations.

He argued that his right to a fair trial (Article 6 ECHR) had been violated because the requirement to produce information to the tax authorities amounted to forcing him to incriminate himself.

Chambaz submitted that the refusal of access to his tax investigation fail was a violation of the principle of equality of arms in litigation.

Judgement

The ECtHR found multiple violations of Article 6 ECHR. The ECtHR concluded that there was a violation of Article 6 ECHR because the Swiss Courts had forced Chambaz to incriminate himself. The ECtHR noted that by putting Chambaz under pressure to provide documentation which was potentially incriminating in the course of an investigation for tax evasion the Swiss authorities had violated Chambaz’s right to silence.

The ECtHR found that the Swiss authorities denial to give Chambaz access to the investigation file did not pursue a legitimate aim because the authorities’ denial to provide access to the investigation file was ascribed exclusively to Chambaz’s uncooperative ‘attitude’ in the course of the proceedings.

The Chambaz Principles

2 not 1. Principle 1 - Grants taxpayer right of access to

information, but not only. Principle 2 - Nemo tenetur se ipsum accusare (right

not to incriminate oneself). Meanwhile, in Malta.

Malta Institute of Management

Case 160 of 2012 of the Court of Appeal

Facts of the Case

VAT Appeal pending in front of the ART. ‘Numerical’ case with VAT Dept and taxpayer taking

diametrically opposed views. Taxpayer argued VAT Dept owed him credits for input VAT. VAT Dept argued that taxpayer owed VAT Dept output VAT. In the course of the initial hearings taxpayer asked

Department to file a copy of its VAT file in the acts of the ART.

VAT Department objected to the request. ART ordered the Department to produce the VAT file. The VAT Department appealed.

VAT Dept’s Grounds of Appeal Documents requested were privileged

documents (637 COCP). Documents requested were subject to

official secrecy and could not be produced in Court.

Submission of documentation requested not in the best interest of justice.

Taxpayer’s Arguments

Right of access to key information concerning taxpayer.

Ratio of right to official secrecy is to protect sensitive information pertaining to taxpayers and not stopping taxpayers from acceding to information pertaining to them.

Need for transparency in the pre-trial stage. Last but not least, the Chambaz principle

(the ECtHR delivered the Chambaz judgment a few weeks after the first-tier judgment).

Court’s Conclusions

Referred to the first Chambaz principle. Explained that the whole issue revolved around a

human rights issue (right to fair hearing). All Courts and Tribunals (and not just Constitutional

jurisdictions) were bound to ensure that FHR are respected.

Interestingly, spoke of the tax file as ‘belonging’ to the taxpayer.

Referred to importance of equality of arms principle. Dismissed the appeal confirming an excellent

judgment of the ART.