It had to happen. My disgust at French political intrigue has
lead to a possibly unacceptable dosage of spirit, but kindly excuse
the end, which justifes the means.
So, what has happened? The French Trust Register has been
declared unconstitutional, but has now been ressurrected with a
reduced level of access. Only certain administrations can now
consult it. It s no longer open to journalists and members of the
French the tax paying public.
The attempts by several organisations, whether State of
other forms of sponsorship attempting to render Fiscal policy
objectives criminally enforceable has met with its limitation, a
legal abyss. On cannot conflate sectarian economic viewpoints by
nature "soft" if not woolly, with law and property rights,
particularly when the legislation concerned is linguistically
unable to apprehend the full legal effects of the targeted set of
foreign property rights. Treating trusts as a contractual mandate,
as is the French administrative tendency, has propagated a freedom
for manoeuvre outside the strict legal definition, notably at the
O.E.C.D. level by M Saint-Amans, and internally by Sénateur Pierre
Marini. That is doomed to conceptual failure for imprecision and
deeming something to be something which it is not. The Common
Reporting Standard treating everyone concerned administratively as
being an "account holder" irrespective of actual entitlement being
one example of the exponential idiocy stemming from assuming that
one or more isolated case is sufficient to define the remainder.
That is an example of fiscal policy crashing when attempting to
land on the legal terrain of the reality of correct constitutional
assessment, declaration and payment of taxes. The laws of taxation
and collection of revenue do not equate with the implementation of
fiscal policy, except of course in France.
Tax Research LLP, being but one of the visible, dare I say
re"visionary" tips of the underlying iceberg of politically
inspired ignorance which will sink their titanic cross-border
canoe.
It is clear now the the near hysterical attempts being made at
the European level to kill off the trust have a further Beechers
Brook to leap here. Having lost traction during the Brexit process,
one can hardly hope for further assistance or understanding in that
upcoming disinstitutionalisation.
The full text of Décision n° 2016-591 QPC du 21
octobre 2016 is set out at this link, in French obviously, and
therefore the underlying principles of the invalidation may not be
familiar to those outside the French culture to which the decision
is addressed. Being slightly livid at the lack of responsible legal
scholarship involved in the French miss-assimilation of the trust
concept, the following is liberally showered with a degree of
quasi-socratic irony that I hope the reader will enjoy, with a
proposal for a cocktail of hemlock at the end.
It is clear that the French administration and executive going
to Parliament have overstretched their constitutional capacities,
and were, what is more, aware that they were so doing in order to
stymie the legal qualities of the property arrangements as not
being sufficiently French to merit international recognition
without reclassifying it as a form of contractual mandate
equivalent to an investment account. For example, Patrick
Saint-Amans, to whose superior I presented a proposal at Bercy in
the 1990s for using a combined trust and SCI to hold the succession
to Bordeaux Vineyards evidently did not understand anything in it
but a threat to his training and understanding. Perhaps I did not
emphasise the fact that this was a valid method of holding
agricultural property in England enough, but then the British have
always had a closer relationship with Bordeaux than the Parisian
cares to appreciate.
It will not however be lost on those members of the European
Parliament who judge it as a means of an elite to elude their
notions of "ethical" taxation, but neglect the fact that it is a
legitimate means of property ownership and management that will
only be seen as sinning in the eyes of the blinkered beholder.
What did the Decision actually say?
5. En favorisant, par les dispositions contestées, la
transparence sur les trusts, le législateur a entendu éviter leur
utilisation à des fins d'évasion fiscale et de blanchiment des
capitaux. Il a ainsi poursuivi l'objectif de valeur
constitutionnelle de lutte contre la fraude et l'évasion
fiscales.
6. La mention, dans un registre accessible au public, des
noms du constituant, des bénéficiaires et de l'administrateur d'un
trust fournit des informations sur la manière dont une personne
entend disposer de son patrimoine. Il en résulte une atteinte au
droit au respect de la vie privée. Or, le législateur, qui n'a pas
précisé la qualité ni les motifs justifiant la consultation du
registre, n'a pas limité le cercle des personnes ayant accès aux
données de ce registre, placé sous la responsabilité de
l'administration fiscale. Dès lors, les dispositions contestées
portent au droit au respect de la vie privée une atteinte
manifestement disproportionnée au regard de l'objectif poursuivi.
Par conséquent, sans qu'il soit besoin d'examiner les autres
griefs, le deuxième alinéa de l'article 1649 AB du code général des
impôts doit être déclaré contraire à la Constitution.
The Conseil admitted that the objective of the struggle against,
not the elimination of, tax evasion and fraud was a constitutional
"value".
The fact that the names of the Constituant (read Settlor), the
beneficiaries (read contractual) and the administrators of a trust
(misread anyway, note that the term trustees is not a contractual
one), grants the person consulting the Register information on the
manner in which the individual intends his property to be disposed
of. That is a reference inter alia to the French right to keep
one's testamentary, or here assimilated dispositions private.
The insidious thing is that the French administration knew that
it was acting unconstitutionally when it introduced the legislation
to Parliament, as did the Parliament itself. That is the problem
with drinking dirty stirred martinis before voting. Shaken Martinis
imply a degree of icy self questioning before the political
stirring,intoxication, then carousing.
The French have contented themselves with stirring it to
date.
The Conseil stated that Parliament had not set out the
motivation for allowing public consultation, it obviously did not
dare to, nor limit the circle of person able to consult the
Register, composed as it was of tax information confided to the Tax
administration by declaration. The Register therefore had violated
the constitutional right to a vie privée of the
subject in a manner manifestly disproportionate to the objective
pursued.
The Hunting of the Snark?
It is clear that that principle, at that point, becomes a a
relative concept rather than the absolute right of confidentiality
granted at Common Law: Dave Hartnett's case (Oops!), or
better R (on the application of Ingenious Media Holdings
plc and another) (Appellants) v Commissioners for
Her Majesty's Revenue and Customs (Respondent) is one case
where such an abuse was well and truly "whacked" by the Supreme
Court on 19th October, 2016. Putting the same on a register does
not absolve the administration from compliance with elementary
constitutional principles, that same constitution which grants it
the privilège or charge to
extract taxes from the Body Politic, if I may be forgiven that
heady cocktail of wildly different but in effect parallel
constitutional terms from both sides of the Manche -. reminiscent
of a dirty Vodka Martini. Back to the makers and shakers, not to
the quakers at Tax Research LLP.
The French judgment was founded on the basic principle of
proportionality, unfortunately not a fundamental Breach of what we
would describe in England as an absolute common law right to
confidentiality, and the application of that principle to
the éléments declared in a ta declaration.
The problem here is that the French delegation of powers between
the various state organs is a social contract phenomenon. Each
citizen's rights in relation to the whole may be strong, but they
are merely relative in relation to the remaining social fabric of
the contractual republican separation of power. I personally am
grateful to be living and working within a system of entrenched and
vibrant common law principles under a constitutional ejectable
monarchy cum democracy. At least I do not need to mount a barricade
and call upon fellow "idealists" to defend my rights. They are
there, no matter how power flushed individual civil servants such
as Mr Hartnett become. Power corrupts by its over exercise in the
pursuit of ideals ....
The Conseil therefore based its finding upon the now trite
theory of "proprortionality" in relation to the guarantee of
"la vie privée", the area of the subject's existence
outside arbitrary State regulation and influence. It is very much
wider that the term private life. That inherently includes the
right to dispose of one's property freely, and without necessarily
everyone else being able to scrutenise the manner in which it is to
be done. Tax Research et al. kindly note! Whilst it is clear that
one of the unsaid aims of the Conseil was to preserve the
confidentiality of testamentary dispositions, the article 792 bis
CGI dispositive does treat trust disposals on death as that, albeit
wrongly. That is where the ugly head of the iceberg of the
misconstruction of legal concepts on a "pseudo-ethical" basis of
ignorance raises its hydra like head.
It is worth noting that both Laurent Fabius and Lionel Jospin
sat on the Conseil that determined the issue. It was therefore
incontrovertibly an objective decision.
However, the French Government has made so much of its attempts
to moralise - monetise?- everyone else's laws of property and
incidentally markets that it might attempt now to restrict access
to a limited circle or invent a new reason for breaching
quasi-testamentary confidentiality, rather than losing its
financial and political international investment. Its agents abroad
such as those within the OECD and the IMF, not yet the UN may still
yet be able to stir dirty cocktails of misundstanding and serve
these to their audience at these institutions.
Since 22nd October, the offending article 1649AB CGI has been
amended so as to grant access to the Register only to certain
adminstrations alone; not to the general taxpaying public.
For the Bar at the European Parliament, not in honour of the
departing Farage, may I propose the following stirred libation,
noting the reversion to imperial:
- 3 ounces gin -- London dry gin of course
- 1 ounce vodka ( Ukrainian by way of solidarity: Russia being
geographically in Europe)
- 1/2 ounce blonde Lillet (probably best to put that Bordeaux
concoction in rather than the real Kina Lillet, one can't avoid a
slight concession to French intellectual hypocrisy in a European
context)
- please don't stir it, it would improve the taste from the
slight bitter touch, "Mais" to quote Ian Fleming
" n'enculons pas des mouches"; at last not all
of them at the same time .......