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France: Database EVAFISC Lawful

(Oct. 11, 2011) On August 24, 2011, the Conseil d'Etat, France's Supreme Court for administrative matters, rejected the request of a Swiss subsidiary of the British bank HSBC to have the database EVAFISC set aside. EVAFISC is designed to identify taxpayers residing in France who hold undisclosed bank accounts abroad. (Conseil d'Etat, Décision No. 336382, Conseil d' Etat website (Aug. 24, 2011) [enter decision number in search box].)

EVAFISC is an important tool used by the French authorities in the fight against tax evasion. It also is designed to encourage the owners of foreign bank accounts to voluntarily disclose such accounts. The database was created by a ministerial regulation issued by the Ministry of Finance and Budget and published in the JOURNAL OFFICIEL, France's official gazette, on December 5, 2009. (Arrêté du 25 novembre 2009 portant création par la direction générale des finances publiques d'un fichier de comptes bancaires détenus hors de France par des personnes physiques ou morales dénommé «EVAFISC», LEGIFRANCE (Dec. 5, 2009).)

On March 11, 2010, HSBC asked the Conseil d'Etat to issue an injunction suspending the application of the regulation and the use of the database, pending the trial on the merits. The Conseil d'Etat rejected the request, stating that HSBC neither showed there was an emergency necessitating such action nor raised serious doubts as to the legality of the regulation. (Conseil d'Etat, Décision No. 337458, Conseil d'Etat website (Apr. 19, 2010) [enter decision number in search box].) In its final judgment rendered in August 2011, the Conseil ruled that the Ministry of Economy and Budget had the authority to create the database. (Conseil d'Etat, Décision No. 336382, supra.)

It appears that EVAFISC, a few months after its creation, received a large quantity of customer data seized at the French domicile of Hervé Falciani by the French police acting on a warrant issued by the Swiss authorities. Hervé Falciani, a former information technology specialist at the HSBC bank in Geneva, allegedly stole the data. The decryption of the files found at his domicile allowed for the identification of 127,000 accounts belonging to 79,000 people, including 8,231 French residents or citizens, according to the public prosecutor of Nice. The French tax authorities, however, stated that a list of only 3,000 fraudsters was constituted. The use of this data by the French authorities caused a major controversy, bordering on a diplomatic incident, between France and Switzerland. (Evafisc: le Conseil d'Etat rejette la requête de HSBC, LEMONDE.FR (Aug. 24, 2011).)