Can You Keep a Secret? Financial Privacy in the Year 2000*
In the age of globalization, it has become increasingly difficult for the United States to enforce its domestic tax laws and preserve the integrity of its tax system. Not only has globalization created new opportunities for international trade and investment, but it has also fostered the growth of tax havens that facilitate tax avoidance and evasion. As a result, the U.S. government has increased its efforts in recent years to combat these harmful international tax practices. While the U.S. has entered into more than 75 international tax agreements that provide the U.S. and its treaty partners with the necessary authority to exchange tax information across borders,[1] the Department of Treasury is currently seeking expansion of the current U. S. treaty network to emerging markets, particularly in Latin America.
Effective January 1, 2000, the U. S. entered into a treaty with Venezuela which, outside of the NAFTA countries, represents the first country in Latin America that has an income tax treaty with the U. S. The Department of Treasury views the signing of the treaty as the first step towards the expansion of the U. S. treaty network in Latin America.
Additionally, the Internal Revenue Service (“IRS”) recently released the final withholding regulations on payments to nonresident aliens that effectively require extensive changes to the operating systems and procedures of international banks and their affiliates. While the IRS will allow certain foreign financial intermediaries attaining “qualified intermediary” status and their customers to avoid the burdensome information gathering and reporting requirements, the IRS continues to insist that the qualified intermediary’s country must have in place “Know Your Customer” (“KYC”) rules satisfactory to the IRS. Therefore, the new withholding regulations may be the mechanism by which the U. S. extends its KYC rules to foreign jurisdictions. In this connection, the IRS has announced that it will apply stricter audit and enforcement standards to financial institutions and their branches that are located in countries that are considered tax havens or that impose bank secrecy rules.
In light of the United States’ increasing involvement in the international exchange of taxpayer information, foreign clients with potential U.S. tax obligations frequently inquire as to whether their privacy may be adversely affected by tax information exchange agreements between the U.S. and their countries of residence.[2] Because the international relations (or lack thereof) between the U.S. and other countries vary in scope, each situation must be analyzed separately. However, the general trend in international relations reveals that privacy is becoming increasingly vulnerable to international tax information exchange practices.[3]
Recent efforts by the Organization for Economic Cooperation and Development (“OECD”) [4] and the international community to combat harmful tax practices have created an international legal and political climate in which jurisdictions fostering harmful tax practices are disfavored and stigmatized. [5] On April 9, 1998, the OECD released a Report on Harmful Tax Competition: An Emerging Global Issue. This Report emphasized that “governments cannot stand back while their tax bases are eroded through the actions of countries which offer taxpayers ways to exploit tax havens and preferential tax regimes to reduce the tax that would otherwise be payable to them.”[6] The general purpose of the 1998 Report was to initiate a gradual, step-by-step process by which OECD member countries could combat harmful tax regimes. [7]
On June 26, 2000, the OECD released a follow-up Report on Progress in Identifying and Eliminating Harmful Tax Practices. This Report listed 35 jurisdictions that qualified as “tax havens” under the criteria set forth by the OECD in 1998. [8] By listing these nations, the OECD intended not only to stigmatize these jurisdictions, but also invite them “to consider making commitments to the elimination of harmful tax practices.”[9]
In light of the international efforts to combat harmful tax practices and encourage the free flow of information across borders, it is important to distinguish between what the United States considers to be criminal tax evasion versus legal tax avoidance. [10]In United States v. Isham, the United States Supreme Court held that “[t]he legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.”[11] More than half a century later, Judge Learned Hand reiterated this sentiment in Helvering v. Gregory, holding that “a transaction, otherwise within an exception of the tax law, does not lose its immunity, because it is actuated by a desire to avoid, or, if one chooses, to evade taxation. Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose the pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”[12] Although it is oftentimes difficult to distinguish between evasion and avoidance, it is necessary to distinguish between these practices in order to understand the circumstances under which the United States and its treaty/information exchange agreement partners may divulge and exchange tax information.
Part I of this memorandum provides a general overview of the tax treaties and tax information exchange agreements entered into by the United States. Part I also discusses the three general types of information exchanges that may occur under these treaties and agreements. Part II discusses IRS procedures for gathering and transmitting taxpayer information. Part III gives a general introduction to bank secrecy laws and then focuses upon U.S. bank secrecy and the disclosure obligations of international financial institutions located in the United States. Part IV presents a general overview of the tax treaties, tax information exchange agreements, and bank secrecy laws of nine different jurisdictions including the Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Liechtenstein, and Switzerland. Part V discusses each nation’s tax haven status under the OECD’s 26 June 2000 Report on Progress in Identifying and Eliminating Harmful Tax Practices. In conclusion, this memorandum notes that financial privacy is fast becoming a historical relic. U.S. law continues to allow for third party permeation of banking secrecy and facilitates foreign government access to U.S. account information. This memorandum further suggests that although several of the other jurisdictions discussed continue to provide a refuge for individuals who wish to protect their financial interests and private information from disclosure, the general trend is that an increasing number of jurisdictions are making commitments to eliminate harmful tax practices by embracing international tax standards for transparency, exchange of information, and fair tax competition.
I. U. S. Income Tax Treaties and Tax Information
Exchange Agreements
While Section 6103 of the Internal Revenue Code provides that tax returns and return information are confidential and generally not subject to disclosure, such information may be disclosed to a competent authority of a foreign government pursuant to an income tax treaty or tax information exchange agreement.
The United States is currently a party to 63 enforceable income tax treaties.[13] Although differing in context and scope, each of these treaties contains provisions that provide for the mutual exchange of tax information between the U.S. and its treaty partners.[14] In addition, the United States is currently a party to 14 tax information exchange agreements.[15] Many of these agreements are modeled after the United States Model Tax Information Exchange Agreement.[16]
Three general types of information exchanges may occur under these tax treaties and information exchange agreements: automatic or routine exchanges, spontaneous exchanges, and specific requests.[17]
A. Automatic or Routine Exchanges
The laws of the U.S. and various treaty partners provide for the automatic or routine transfer of tax information.[18] Treasury Regulation sec. 1.1461-2(d) grants the IRS authority to routinely transmit information on IRS Forms 1042-S and 1001.[19] Where the tax information exchange agreement in question specifically provides for automatic exchanges, the competent authority of one state must transmit to the competent authority of the other state information that is likely to be relevant to and contribute significantly to the purposes for which information is exchanged. [20]
Information transferred under automatic exchanges is usually gathered by a contracting state while administering its own internal revenue laws. This type of information generally relates “to investment income received by residents of each country from sources within the other country or taxes withheld or income payments to residents of the other country.”[21] The advantage of this system is that the source country need not undertake any special investigations in response to specific requests for information by the other country since the information exchanged is automatically collected by the source country’s tax officials during the ordinary course of business.[22]
B. Spontaneous Exchanges
Some exchange of information provisions provide for the spontaneous exchange of tax information between treaty partners. The “spontaneous exchange of information” is defined by the Internal Revenue Manual as “the furnishing to a treaty partner, without a specific request, of information which is discovered during a tax examination or investigation which suggests or establishes non-compliance with the tax laws of a treaty partner.” [23] In addition to information on non-resident aliens and foreign corporations, spontaneous exchanges may include information pertaining to U.S. citizens and domestic corporations.[24]
The United States generally participates in spontaneous exchanges of information with countries that reciprocate information transfers. In particular, the Director of the IRS Examination Division is instructed by the Manual to carefully monitor reciprocity. [25] The Internal Revenue Manual provides that “the [IRS] currently will engage in Spontaneous Exchanges of Information with all treaty partners with whom [the U.S. has] treaties that permit such exchanges.” [26]
C. Specific Requests
When specific information is sought, the requesting state must specify the name of the taxpayer on whom information is sought and establish that the request is necessary to determine the taxpayer’s liability for a tax covered by the agreement. Specific requests received by the I.R.S. are not automatically granted. Rather, the U.S. Competent Authority [27] evaluates each request on a case-by-case basis to determine whether the request involves a taxpayer who is subject to the other country’s tax laws and that the information has been requested in good faith. [28] The U.S. generally rejects “fishing expeditions.” [29]
Once all procedural rules and treaty standards have been satisfied, the IRS may invoke its full investigative powers to obtain the information requested. [30] In addition, the IRS may use its authority to issue an administrative summons for obtaining information, even in cases where no U.S. tax interest is involved. [31] In lieu of relying on income tax treaties or tax information exchange agreements, the IRS may utilize “letters rogatory” to obtain information from foreign tax authorities. Letters rogatory are requests by a court or tribunal of one country to the court or tribunal of a foreign country to take testimony or obtain documents in the foreign nation for use of the requesting tribunal. U. S. courts are authorized to respond to letters rogatory pursuant to 28 U.S.C. §1782. While compliance with letters rogatory requests by a U. S. court is discretionary, letters rogatory have been used to obtain information from foreign tax authorities in lieu of relying on exchange provisions contained in international treaties.
II. IRS INFORMATION GATHERING PROCEDURES
Congress has provided the IRS with a number of investigative tools which may be used to compel disclosure from the taxpayer or a third party.[32] Section 7602 of the Internal Revenue Code provides that, in order to determine the tax liability of any person, the IRS may:
- Examine any books, papers, records, and other data that may be relevant or material to such inquiry;
- Summons the person liable for the tax, or certain other persons, to appear before it at times and places named in the summons to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
- Take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.[33]
While the attorney-client and attorney-work-product privileges can be raised as a defense to IRS summonses and discovery requests, an IRS summons may be used when a request for information pursuant to an international treaty was unsuccessful or a treaty is unavailable. For example, United States courts may issue subpoenas to U.S. nationals or citizens residing in foreign, non-treaty countries, requiring them to appear, testify, and produce relevant documents. [34] The IRS may also issue summonses or subpoenas directly to foreign banks by serving U. S. branches of the foreign bank. [35] Many foreign governments object to such subpoenas on the basis that they constitute an improper exercise of U.S. jurisdiction. [36]
Another critical issue that frequently arises in the course of IRS investigations is whether the United States can compel compliance with a subpoena or summons when that compliance would violate the laws of a foreign country. In Society Nationale Industrielle Aerospatiale v. USDC for So. Dist. of Iowa,[37] the U.S. Supreme Court held that the violation of foreign laws is not by itself sufficient to prevent compliance with a U.S. court-issued document request. In particular, the Court held that “[i]t is well-settled that [foreign “blocking” statutes] do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute. . . . The lesson of comity is that neither the discovery order nor the blocking statute can have the same omnipresent effect that it would have in a world of only one sovereign.”[38]
Additionally, the IRS recently finalized Treasury Regulation sec. 1441, which introduced major changes to the documentation requirements of foreign depositors receiving certain payments from U. S. withholding agents. In particular, the new Form W-8BEN, which must be provided to a U. S. withholding agent no later than January 1, 2001, requires that the “ultimate beneficial owner” provide significant personal information including the individual’s country of residence. Such information will be available to the IRS, which may forward the information to foreign tax authorities under the provisions of international income tax treaties and information exchange agreements.
III. Bank Secrecy Laws: a closer look at the disclosure obligations
of U. S. branches of international banks
Many nations have strict bank secrecy laws that prohibit employees of financial institutions from disclosing any financial information on clients.[39] Such confidentiality and secrecy laws impede the international exchange of information. Thus, the United States has conditioned its entry into a number of treaties on the promises of nations with strict bank secrecy laws that restrictions on disclosure will not impede the free exchange of information.[40]
The United States has gained significant recognition as a key financial center for the global economy. Because of this status, the U.S. has become home to many branches of international financial institutions. For non-resident persons holding deposit or other accounts with international banks located in the U.S., the privacy and confidentiality of account information is a major concern. Indeed, the confidentiality of financial information has become a global concern as the increased mobility of capital has been accompanied by an increase in the mobility of information about that capital.
Tax planners and investment advisers alike agree that no financial plan should ever depend upon bank secrecy prohibiting the transfer of financial information to regulatory agencies. According to Marshall J. Langer, author of a leading treatise on international tax planning:
“If the success or failure of any tax plan depends upon secrecy, look for another plan. There is no such thing as absolute secrecy. There is always some possibility that part or all of the plan will come to light. In many instances you will be under legal obligation to disclose it yourself."[41]
This is not to say that banks and nonbanks may freely disseminate information regarding customer accounts. In general, financial institutions operating in the United States are required to keep all of their customers’ banking records and transactions confidential. Yet "complete" financial privacy does not exist: there are broad exceptions to the rule of confidentiality. Under U.S. law, certain exceptional circumstances allow an individual's otherwise confidential account information to be passed to third parties, often with little recourse available to the affected customer. Because financial privacy cannot be guaranteed, persons utilizing international financial institutions with U.S. branches need to be cognizant of the situations and circumstances which could allow a bank to legitimately disclose account information to third parties.
International banks with branches in the United States are governed by both federal and state law. These laws regulate bank disclosures to third parties. Where the third party requesting disclosure is a foreign government, federal and state statutes interact with U.S. international law, and principles of international reciprocity, to create a somewhat different legal standard for disclosure of account information.
A. Federal Law
1. An Overview
There is no constitutional right of privacy in financial account information and transactions. In United States v. Miller[42], the U.S. Supreme Court held that the Fourth Amendment does not protect information disclosed to third parties. The court reasoned that because individuals disclosed information to banks, they could not have legitimate expectations of privacy in their bank records.[43] The Miller decision prompted Congress to enact laws that would provide banking customers with some assurance of privacy in their financial records and transactions.
Three federal laws have been enacted which govern the disclosure of customer information by financial institutions to governmental entities: (i) The Right to Privacy Act; (ii) The Third-Party Recordkeepers Act; and (iii) The Electronic Communications Privacy Act. These three statutes act in concert to create significant protection for the clients of financial institutions. In addition, the newly-enacted Gramm Leach Bliley Act, (“GLBA”) contains privacy provisions which limit the ability of a “financial institution” (as such term is broadly defined in GLBA, to include many non-banks, including broker-dealers) to disclose its customer information to non-affiliated third-parties and require such institutions to provide their customers with an opportunity to opt-out from such disclosures.
2. The Right to Privacy Act.
The Right to Financial Privacy Act (RFPA), enacted as 12 U.S.C. §3401 et seq., statutorily recognizes that the clients of banking institutions have a valid right to privacy in their accounts. Under the RFPA, the account records and customer information of persons using the bank's services, and persons for whom the bank acts as fiduciary, may not be disclosed to third parties. Where branches of the federal government, its agencies or departments, request disclosure of account information, the bank may not comply unless the agency first obtains a Certificate of Compliance and presents this to the bank. It is illegal for a bank to disclose customer or account information without a certificate.[44] The information protected under the RFPA includes all original and duplicate records relating to the customer's relationship with the financial institution, as well as information in the institution's records which may be derived from those records.
Although these broad provisions seem to ensure some degree of banking confidentiality, there are several provisions of the RFPA which significantly limit its protections.
a. The RFPA applies only to individuals and partnerships of five or fewer partners. Corporations and partnerships consisting of six or more partners are not covered by the RFPA.
b. The RFPA does not govern requests for disclosure made by the IRS. [45]
c. Banks are required to disclose account information pursuant to an administrative or judicial subpoena where the federal government [46] is seeking financial records in relation to litigation in which both the government and the account-holder are parties.[47] When a subpoena is issued, it is likely that the customer is under investigation and the records are necessary to further the investigation. In certain situations specifically involving federal grand jury subpoenas, the bank may not inform its customer of the subpoena or the disclosure to the government agency.
d. Where the information or transactions relating to an account lead a bank to suspect criminal activities, the bank is under an obligation to make a limited disclosure to the government under the Bank Secrecy Act. However, these disclosures may include only basic information about the customer. Specifically, the bank may provide the name of the customer, the type of account held, and the nature of the suspected illegal activity. [48]
e. The RFPA does not apply to commissioners who are appointed by courts to obtain information for criminal investigations in foreign countries. [49] Once appointed, commissioners are empowered by the court to receive bank disclosures of customer information.
Thus for individuals or small partnerships that are not involved in, or suspected of being involved in any illegal activity, the RFPA provides an assurance of bank confidentiality. However, as banking customers may be investigated on the basis of suspicion only, there is no guarantee that the information in an account will never be subject to disclosure.
3. The Third-Party Recordkeepers Act
The Third-Party Recordkeepers Act (TPRA), enacted as 26 U.S.C. §7609, regulates the disclosure of account information by recordkeepers such as banks to the IRS. Under TPRA, banks and other recordkeepers such as stockbrokers must comply with certain requirements and procedures to effectuate legal disclosures of customer information. TPRA provides that the IRS must wait twenty-three (23) days from the date of serving the summons upon the bank, before obtaining production. The IRS must provide notice of the summons to the person whose records have been requested within three (3) days of serving the bank. TPRA also empowers the customer with the right to move to quash the summons. If such a proceeding is initiated in a timely fashion, the IRS may not obtain production until the court has adjudicated the matter and ordered production of the information.
There are several exceptions to the notice requirements of TPRA including:
a. Where the summons seeks the collection of tax-liability which has already been determined;[50]
b. Where the summons seeks only to identify the customer holding a numbered account;[51] and
c. Where the summons seeks only to determine whether the relevant records are in the bank's possession.[52]
Under these three circumstances, the IRS need not notify the customer of the summons. A Recordkeeper's Certificate, issued by the IRS and stating that the twenty-three (23) day period passed without objection from the customer, protects the bank from liability for the disclosure.[53]
4. The Electronic Communications Privacy Act (ECPA)
The Electronic Communications Privacy Act (ECPA), enacted as 18 U.S.C. §2701 et seq., regulates disclosure of the contents of electronic communications to a government authority. This provision protects the confidentiality of financial information of customers of banks and other financial institutions where such information is transferred electronically. Under §2702(a)(1) "a person or entity providing an electronic communication service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service." The only exception under the ECPA is codified in §2703(c), which provides that disclosure of the contents of an electronic communication may only be made to the government, pursuant to a federal or state warrant. [54]
5. Securities Laws
While the three statutes mentioned above do protect the personal information of financial institutions, it is important for banking customers to know that greater financial privacy cannot be found by depositing funds in the account of a broker or investment company rather than a banking institution. Much like banks, financial institutions such as brokerage houses or investment companies keep their customers’ financial records confidential as a general matter. However, under 15 U.S.C. §78(a) et seq., (the Securities Exchange Act of 1934), the Securities and Exchange Commission (the “Commission”) requires members of national securities exchanges and their corresponding brokers or dealers to keep certain records on file and provides that any and all such records are subject at any time to examination by representatives of the Commission in furtherance of the protection of investors. Similar provisions apply to investment companies under 15 U.S.C. §80(a) et seq., (the Investment Company Act of 1940). Thus, customers of international banks cannot circumvent the disclosure rules of banks by depositing their money in alternative financial institutions.
B. State Law
1. The Role of State Law
The right to banking privacy has not been recognized by the Supreme Court, [55] and the federal statutes enacted to ensure banking confidentiality are relatively broad measures which provide limited protection to certain banking customers.[56] Under the supremacy clause of the U.S. constitution,[57] federal law supersedes state law where the two laws conflict. However, the Supreme Court has repeatedly placed the onus for protection of privacy upon the individual states. [58] Thus, although Federal laws provide some protection of privacy rights, the privacy laws of each state can significantly broaden or narrow the scope of these rights, provided that the state law does not directly conflict with its federal counterpart. It is often the case that the disclosure laws which are of greatest import in assessing a bank's disclosure obligations are those enacted by each state. The situation of international banks in the state of Florida provides an illuminating example of how state law can impact banking privacy.
2. Banking Privacy in the State of Florida
International Banks licensed and operating in Florida are subject to the Florida State Banking Code and federal banking regulation. Florida International Banking Law §663 et.seq. applies to a Florida-licensed international bank agency as though it were a Florida-licensed state bank.
In Florida, regulations regarding disclosure to third parties are relatively strict and have an underpinning in the state constitution. Section 23 of the Florida Constitution recognizes a broad right of privacy: "(e)very natural person has the right to be let alone and free from governmental intrusion into the person's private life." [59] In Winfield v. Div. of Pari-Mutual Wagering, the Florida Supreme Court recognized that this right of privacy extends to a right of privacy in financial institution records.[60]
The Florida Constitution only protects against intrusion by the government. Florida statues and case law provide for a right of privacy in banking information which extends to private third parties. The first case to recognize this right was Milohnich v. Florida National Bank of Miami Springs,[61] in which a District Court of Appeals of Florida found that financial institutions have an implied duty not to negligently, willfully, maliciously, or intentionally divulge the state of the customer’s account or other information regarding a customer's account to private third parties without the customer's consent.[62]
Banks may only disclose customer information to particular parties in certain situations. Florida Banking Law §655.059 entitled "Access to Books and Records; Confidentiality; Penalty for Disclosure,"[63] applies to both private and government requests for disclosure by financial institutions. Under §655.059, the books and records of financial institutions are confidential and may be made available for inspection and examination only:
a. To the Florida Department of Banking and Finance (the “Department”) or its duly authorized representative;
b. To any person duly authorized to act for the financial institution;
c. To any federal or state instrumentality or agency authorized to inspect or examine the books and records of an insured financial institution;
d. As compelled by a court of competent jurisdiction, usually by a court-issued subpoena or order;
e. As compelled by a legislative subpoena as provided by law;
f. Pursuant to a subpoena, to federal or state law enforcement (authorities) authorized to investigate suspected criminal activity;
g. As authorized by the board of directors of the financial institution in certain circumstances;
h. With respect to an international banking corporation (i.e., a foreign bank), to the home country supervisor of the foreign bank, which is the governmental entity in the bank's home country with responsibility for the supervision and regulation of the bank. Examination by the home-country supervisor is only permitted where:
(1) The supervisor provides advance notice to the Department that it intends to examine the Florida office of the foreign bank;
(2) The supervisor confirms to the Department that the examination's purpose is to ensure the safety and soundness of the foreign bank;
(3) The supervisor does not receive disclosure of the records pertaining to customer deposit, investment and custodial accounts; and
(4) The Department may at any time reserve the right to have an examiner present or to participate jointly in the examination. [64]
Violation of §655.059 is a felony of the third degree, punishable by fines and imprisonment. [65] Thus Florida law recognizes banking confidentiality and deters illegal disclosure by penalizing parties that engage in such behavior.
C. Access of Foreign Governments to Information from International Banks with U. S. branches.
1. In General
International banks are subject to the same confidentiality requirements and disclosure requirements as their U.S. counterparts. However non-resident clients often expect their U.S. accounts to be safe from intrusion by the U.S. or foreign governments and other third-parties.
Except for state law restrictions, there is little statutory or case law which governs or prohibits the right of access of foreign governments and their agencies to account information from banks in the United States. Tax and other types of treaties and agreements facilitate the exchange of financial information from the United States and its government agencies to other governments. In the United States, the government agency responsible for effectuating tax agreements and tax treaties is the IRS.
The Restatement (Third) of the Foreign Relations Law of the United States, states:
[A] Court or agency in the United States, when authorized by statute or rule of court, may order a person subject to its jurisdiction to produce documents, objects, or other information relevant to an action or investigation, even if the information, or the person in possession of the information, is outside the United States.[66]
In order to obtain financial information held by a bank located in the United States, a foreign government may issue letters rogatory or seek the court-appointment of a commissioner to whom the relevant disclosures may be made.
According to Federal Rule of Civil Procedure §26(b)(2), discovery may extend to any matter which is not privileged and which is relevant to the subject matter for the action. However, when a U.S. court is considering whether to allow a foreign government's request for disclosure, the court must consider the following factors:
The importance to the investigation or litigation of the documents or other information requested; the degree of specificity of the documents or other information requested; whether the information originated in the United States; the availability of alternative means of securing the information; and the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located. [67]
Thus courts must subject foreign requests for information to a considerably higher standard of scrutiny than U.S. government requests.
2. Case Law on U.S. Branch Disclosure to Foreign Governments
The case of Young vs. U.S. Dept. of Justice illustrates the relative ease with which a foreign government can access the information held in banks in the U.S..In Young, the bank records of a couple residing in Bermuda revealed frequent deposits of significant sums of money and travelers checks to an account at Chemical Bank (“Chemical”) held by Mrs. Young. This suspicious activity led Chemical to run a background check on the holder of the account. No criminal record was revealed. Several months later, the Attorney General (AG) of Bermuda requested information regarding the Young account from Chemical, but Chemical indicated that they would not disclose account information unless compelled by a subpoena. The Bermudan AG then requested assistance from the Executive Assistant U.S. Attorney, who sought and gained a court-appointment as a commissioner. The U.S. Attorney then relayed the disclosed records to the Bermudan AG. After the Youngs had been indicted, they brought this action alleging that Chemical and the Department of Justice had violated the RFPA in releasing account information to a foreign government. The court found no violation of the RFPA on the part of the bank or the Department of Justice.
In Barquero v. International Bank of Commerce, [68] the Mexican government authority responsible for taxation requested customer information from the International Bank of Commerce (“IBC”) in order to determine the tax liability of a Mexican national. Pursuant to a TIEA, the IRS obtained and served the IBC with an administrative summons for all information relating to the customer's accounts. The U.S. Court of Appeals for the Fifth Circuit upheld the U.S. - Mexico TIEA and assented to the IRS summons for disclosure of banking records.
In Intercontinental Credit Corp. v. Roth,[69] the court ordered the U.S. branch of an Israeli Bank to disclose information pursuant to a subpoena duces tecum. The information sought was not held in the U.S. branch of the bank. However, the Roth court noted that there had been many changes in "concepts of banking" [70] with the result that each branch of a bank could no longer be considered a separate entity. Although the New York branch of the bank claimed not to have a direct link to the relevant branch in Israel, the court suggested that there would be a centralized system of records located in Israel from which information could be accessed by the New York branch.[71]
Similarly, U.S. Courts have ordered Florida branches of foreign banks to comply with grand jury subpoenas ordering production of records located at branches of the banks in third countries, notwithstanding the existence of blocking laws or orders in those countries. [72]
3. Assessing Banking Confidentiality
International banks with U. S. branches and agencies may be subject to significant disclosure obligations. The location of the bank can affect account privacy as state law may enlarge or contract (but not contradict) federal disclosure obligations. The degree of confidentiality with which an account is treated depends largely upon the nature of the transactions effected through the account and whether the holder of the account is under investigation by local, state, federal or foreign governments. Where transactions may seem suspicious to the bank or other regulatory agencies or where the holder of the account is being investigated, the current regulatory framework allows banks to legitimately disclose customer information to third parties. Where such disclosure is court-approved, the banking customer will often have little recourse. Thus non-residents holding accounts with international banks in the United States must be aware that, under certain circumstances, their account information may be made available to third parties and particularly to third parties seeking to bring adverse proceedings against the account-holder.
IV. GENERAL OVERVIEW OF SELECTED JURISDICTIONS
A. Bahamas:
1.General Characteristics
The Bahamas is located in the Atlantic Ocean, 180 miles southeast of Miami. Nassau is the capital and financial center of the Bahamas and is located on the main island of New Providence. With a population of approximately 280,000, the Bahamas has a common law legal system. The Bahamas is relatively stable politically, and both political parties appear to be committed to maintaining the country’s offshore financial center status.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements.
The Bahamas is not a party to any tax treaties or any tax information exchange agreements.[73] In addition to maintaining its status as an offshore financial center, the Bahamas is considered a “no-tax” jurisdiction. Although property taxes are imposed on developed and undeveloped real estate, the Bahamas has no personal income tax, corporate income tax, value added tax, capital gains tax, withholding tax, gift tax, estate tax, or employment tax. [74]
While the Bahamas will generally not render legal assistance in fiscal matters that are primarily tax related, Bahamian courts may offer international legal assistance to governments requesting evidence relating to tax fraud. [75] The courts, however, generally avoid assisting foreign governments in conducting wide-ranging “fishing expeditions” for all potential tax-related information. [76] Although the Bahamas has entered into Mutual Legal Assistance Treaties (MLAT) with Canada, the United Kingdom, and the U.S., these treaties apply only to illegal narcotics, embezzlement, violence, fraud, and violations relating to currency or other financial transactions. [77]
3. Confidentiality and Secrecy Laws
The Bahamas has strict bank secrecy laws that were founded upon the English common law.[78] Section 10 of the Bank and Trust Company Regulation Act of 1965 (as amended in 1980) codifies these bank secrecy laws. [79] The Act provides for substantial fines and possible imprisonment for any breaches of secrecy under the Act. In 1924, the Court of Appeals in Tournier held that a bank’s duty of secrecy is founded upon the contractual relationship between the bank and its customers.[80] However, there are a few exceptions to this duty of secrecy. Bahamian banks may disclose private information of its customers where there is a duty to the public to disclose, where the interests of the bank require disclosure, or where the customer has given his/her express or implied consent to the bank to disclose such information. [81]
4. Tax Haven Status Under 26 June 2000 OECD Report
The OECD listed the Bahamas as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices. [82] Thus, the OECD has determined the following about the Bahamas: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy.[83]
B. Bermuda
1. General Characteristics
Bermuda is located in the Atlantic Ocean approximately 600 miles east of North Carolina and is considered one of the most prominent offshore financial centers in the world. With a population of approximately 60,000, Bermuda maintains the laws, institutions, and social customs of the United Kingdom. Since 1968, Bermuda has maintained a self government based on its own Constitution. Its external affairs are governed generally by the United Kingdom. As one of the oldest and most conservative tax havens in the world, Bermuda has a reputation for being well-governed and politically stable.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
As a virtually tax-free state, [84] Bermuda has not entered into any tax treaties with any other nations. However, on December 2, 1988, Bermuda entered into an Agreement Between the United States and the United Kingdom (On Behalf of the Government of Bermuda) for the Exchange of Information With Respect to Taxes. Article 3 of this Agreement provides the relevant exchange of information provisions. Paragraph 1 directs “the competent authorities of the Covered Jurisdictions [to] provide assistance as appropriate in carrying out the laws of the respective Covered Jurisdiction relating to the prevention of tax fraud and the evasion of taxes.” [85] Paragraph 2 further directs the competent authorities of each jurisdiction to consult with each other and “develop appropriate conditions, methods, and techniques for providing. . . assistance as appropriate in carrying out the fiscal laws of the respective covered jurisdictions other than those relating to tax fraud and the evasion of taxes.” [86]
Although the spirit of the exchange of information article is to encourage mutual cooperation, several provisions within the article condition the exchange of information upon adherence to principles of attorney-client privilege, confidentiality, and public policy. For example, paragraph 6 stresses that the information exchange provisions “shall not impose on either covered jurisdiction the obligation to provide information which is subject to the solicitor-client (or attorney-client) privilege in the hands of the person from whom the information is sought.”[87] In addition, paragraph 9 emphasizes that the provisions shall not impose on either jurisdiction the obligation: “(a) to carry out administrative measures at variance with the laws and administrative practices of [either jurisdiction]; (b) to supply particular items of information which are not obtainable under the laws of [either jurisdiction]; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process; [or] (d) to supply information, the disclosure of which would be contrary to public policy. . .” [88] Although the spirit of the information exchange provisions is to encourage mutual cooperation across borders, the numerous exceptions place a greater value upon preserving the laws and public practices of each country than on sacrificing public policy for the greater good of the other jurisdiction.
In addition to the tax information exchange agreement with the U.S., Bermuda entered into a Mutual Assistance in Tax Matters agreement with the U.S. in 1989. [89] As part of this agreement, the U.S. granted Bermuda certain business concessions in exchange for a promise to provide the U.S. with critical financial information on civil and criminal tax matters.[90]
3. Confidentiality and Secrecy Laws
Bermuda has no banking laws guaranteeing confidentiality or secrecy. However, under general English common law practices adopted by Bermuda, private information is not readily accessible by third parties.[91] In practice, the Bermudan government generally refrains from divulging information solely related to tax evasion.[92] Furthermore, before any information is exchanged under the U.S./Bermuda tax information exchange agreement, the Attorney General must consult with an investigative committee. [93]
4. Tax Haven Status Under 26 June 2000 OECD Report
Six jurisdictions reviewed by the OECD made public political commitments in advance of the June 26 Report to eliminate their harmful tax practices. [94] Bermuda, as one of these jurisdictions, made an advance commitment to eliminate harmful tax practices by the end of 2005 by embracing international tax standards for transparency, exchange of information, and fair tax competition.
C. British Virgin Islands
1. General Characteristics
The British Virgin Islands is a group of approximately 40 islands located 60 miles east of Puerto Rico and 180 miles northwest of Antigua. With a population of approximately 17,000, the British Virgin Islands has a legal system based on English Common Law. The British Virgin Islands has a politically stable government and is self-governed under the nation’s Constitution of 1967.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
The British Virgin Islands has tax treaties with Japan and Switzerland.[95] Although it has not entered into any exclusive tax information exchange agreements, the Double Taxation Relief Agreements with Japan and Switzerland contain provisions relating to the mutual exchange of tax information. [96] Although the British Virgin Islands entered into a Mutual Legal Assistance Treaty in 1990 as an extension to a treaty between the United States and the United Kingdom covering the Cayman Islands, [97] this treaty applies only to criminal matters and does not include purely fiscal and tax-related matters.
3. Confidentiality and Secrecy Laws
The British Virgin Islands applies basic principles of English Common Law relating to secrecy and confidentiality.[98] The Banker’s Books (Evidence) Act permits banks to produce records only under the direction of a court order.[99]
4. Tax Haven Status Under 26 June 2000 OECD Report
The OECD listed the British Virgin Islands as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices. [100] Thus, the OECD has determined the following about the British Virgin Islands: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy. [101]
D. Cayman Islands
1. General Characteristics
The Cayman Islands (Cayman) are located in the western Caribbean, east of Jamaica, and 460 miles south of Miami. Cayman is one of the world’s leading financial centers and the fifth largest banking center on the globe. [102] With a population of approximately 30,000, Cayman has a legal system based on English Common Law. Cayman is politically stable and remains a dependent territory of the United Kingdom. It does, however, maintain a high degree of internal political autonomy under its 1972 Constitution.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
The Cayman Islands are not a party to any tax treaties or any tax information exchange agreements. Cayman is a zero income tax jurisdiction with no gift tax, estate tax, business or value added tax, property tax, accumulated profits tax, or capital gains tax.[103]Although Cayman has not entered into any Mutual Assistance agreements relating solely to tax matters, in 1986 it entered into a Mutual Legal Assistance Treaty with the U.S. that covers tax information relating to crimes. [104] In 1999, Cayman passed the Proceeds of Criminal Conduct (Amendment) (Foreign Offenses) Law that brought fiscal offenses within the crimes under which the Cayman authorities will assist foreign nations.[105] However, in order for the Cayman authorities to provide information to the U.S., the alleged offense must satisfy the “dual criminality” test which requires that the offense be considered a crime under Cayman law.[106]
3. Confidentiality and Secrecy Laws
The Cayman Islands are known for their strict secrecy laws. Under Cayman law, attorneys, accountants, bank officers, and staff employees are strictly forbidden from disclosing or improperly distributing confidential information gathered from customers. [107] The Confidential Relationships Law imposes substantial criminal penalties on any individual who divulges confidential information.[108] The only circumstances under which Cayman will lend assistance to the U.S. are those pertaining to criminal matters where the offense is a crime under both U.S. and Cayman law. [109]
4. Tax Haven Status Under 26 June 2000 OECD Report.
The Cayman Islands have made an advance commitment to eliminate harmful tax practices by the end of 2005 by embracing international tax standards for transparency, exchange of information, and fair tax competition. [110]
E. Guernsey.
1. General Characteristics
As a part of the British Isles, Guernsey is located approximately 80 miles south of the U.K. and 20 miles off the coast of France. Known historically as a British tax haven, Guernsey has its own legislature, judicial system, and tax laws that are completely independent from the U.K. With a population of approximately 60,000, Guernsey is a politically stable nation.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
Guernsey is a party to double tax treaties with Jersey and the U.K. Although Guernsey has not entered into any specific Tax Information Exchange Agreements with the U.S. or other nations, under its tax treaties with Jersey and the U.K., tax authorities from these nations must exchange information necessary to prevent fraud and tax avoidance. [111] Because Guernsey has not entered into any mutual legal assistance treaties, the only means by which tax information is shared is through the exchange of information under its double tax treaties.
3. Confidentiality and Secrecy Laws
For a fee, the public has access to all records on the Register of Companies.[112] Information pertaining to directors and shareholders is on the public record.[113]
4. Tax Haven Status Under 26 June 2000 OECD Report
The OECD listed Guernsey as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices. [114] Thus, the OECD has determined the following about Guernsey: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy.[115]
F. Isle of Man
1. General Characteristics
The Isle of Man is a British crown dependency located in the Irish Sea, between Ireland and Scotland. With a population of approximately 71,000, the Isle of Man is independent from the U.K., both politically and constitutionally. The U.K., however, is responsible for matters of foreign affairs and defense. Although the Isle of Man has its own legal system based on English Common Law, the island has enacted its own special laws regarding direct taxation, company law, and financial supervision.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
The Isle of Man is a party to a double taxation treaty with the U.K.[116] This treaty directs the relevant authorities in each of these jurisdictions to exchange such information as is necessary to carry out the provisions of the treaty or for the prevention of fraud or the administration of statutory provisions against tax avoidance.[117] The treaty additionally provides that all information exchanged is confidential and must not be disclosed to any third parties, including the U.S.[118] Furthermore, no information may be disclosed that would disclose any trade secrets or processes.[119]
3. Confidentiality and Secrecy Laws
The Isle of Man has a strong tradition of secrecy and confidentiality.[120] Banks are generally prohibited from releasing information relating to clients’ financial affairs except when directed to do so by court order.[121] The Isle of Man’s Companies Acts 1931-1993 require companies to maintain at their registry information regarding the secretary, directors, and shareholders in addition to the location of the registered office and the company’s annual account statements.[122] However, companies are not required to disclose details of the beneficial ownership to the assessor of income tax or the collector of customs and excise taxes. [123] The Isle of Man requires sole traders, partnerships, and companies to submit records of their accounts every year to the income tax assessor. [124] Customs and excise inspectors also have the authority to inspect annual accounts.[125]
4. Tax Haven Status Under 26 June 2000 OECD Report.
The OECD listed the Isle of Man as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices. [126] Thus, the OECD has determined the following about the Isle of Man: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy. [127]
G. Jersey
1. General Characteristics
As the largest Channel Island, Jersey is located in the English Channel between England and France. Although the U.K. handles Jersey’s foreign relations and national defense, Jersey’s constitution states that the U.K. will not interfere in purely domestic or tax matters. Jersey enjoys both political and economic stability.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements.
Jersey is a party to double tax treaties with Guernsey and the U.K. Although Jersey has not entered into any specific Tax Information Exchange Agreements with the U.S. or other nations, under its tax treaties with Guernsey and the U.K., tax authorities from these nations must exchange information necessary to prevent fraud and tax avoidance. [128] Because Jersey has not entered into any mutual legal assistance treaties, the only means by which tax information is shared is through the exchange of information under its double tax treaties.
3. Confidentiality and Secrecy Laws
Like the Bahamas, Jersey has adopted the rule set forth by the English Court of Appeal in Tournier v. National Provincial and Union Bank of England which declares that bankers owe their customers a duty of confidentiality in relation to banking matters.[129]As soon as a customer opens an account in Jersey, the bank is bound by a duty not to disclose any information provided by the customer.[130] This duty extends for an indefinite period to all transactions through the account. [131] Furthermore, the bank must not divulge any confidential customer information collected from third parties.[132]
4. Tax Haven Status Under 26 June 2000 OECD Report.
The OECD listed Jersey as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices.[133] Thus, the OECD has determined the following about Jersey: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy.[134]
H. Liechtenstein
1. General Characteristics
Liechtenstein is a small principality located between Switzerland and Austria. With a population of approximately 30,000, the principality has the reputation of being a leading offshore financial center. Having modeled its laws on those of Austria and Switzerland, Liechtenstein is a civil law jurisdiction with most of its laws codified. In addition to enjoying economic stability, the political climate is stable.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
Liechtenstein is a party to a double-taxation treaty with Austria and has entered into mutual agreements with some Swiss cantons. [135] However, Liechtenstein is not a party to any tax information exchange agreements. Under no circumstances will Liechtenstein’s tax authorities lend assistance in tax matters to any foreign jurisdiction.[136] Section 7 of the Liechtenstein Tax Act provides for absolute tax secrecy. [137] Although Liechtenstein is a party to the European Convention on Legal Assistance in Criminal Matters, Liechtenstein will lend legal assistance only if the criminal offense in question is punishable by the laws of Liechtenstein and the state seeking assistance.[138]
3. Confidentiality and Secrecy Laws
In addition to its reputation as a strong enforcer of bank secrecy laws, Liechtenstein is known for its commitment to protecting attorney-client and fiduciary-beneficiary privileges.[139] Heavy sanctions are imposed for parties breaching professional secrecy. [140] Pursuant to the Banking Act, employees of banks and finance companies are strictly prohibited from divulging any information entrusted to them by their customers. [141] This obligation to treat all information as confidential lasts indefinitely.[142] The only exception to this rule is where criminal proceedings require disclosure. [143] In addition, the Lawyers and Trustees Acts require lawyers and trustees to treat all client information as confidential. [144] Lawyers have the right to remain silent during any court or administrative proceedings involving tax matters. [145] Under no circumstances will Liechtenstein grant assistance on tax matters to any foreign tax authority.[146]
4. Tax Haven Status Under 26 June 2000 OECD Report
The OECD listed Liechtenstein as a tax haven under its Report on Progress in Identifying and Eliminating Harmful Tax Practices. [147] Thus, the OECD has determined the following about Liechtenstein: (1) there is no or nominal tax on geographically mobile financial activities; (2) there is no effective exchange of information with respect to the regime; (3) the jurisdiction’s tax regime lacks transparency; and (4) the jurisdiction facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy. [148]
I. Switzerland
1. General Characteristics
Switzerland is located in central Europe and is known to have some of the world’s strictest bank secrecy laws. With a population of approximately 6.5 million, Switzerland enjoys political and economic stability. Although Switzerland’s civil and commercial codes are federal and apply throughout the nation, most taxes are levied by each of the 26 individual cantons as opposed to the federal government.
2. Tax Treaties, Information Exchange Agreements, and Mutual Assistance Agreements
Switzerland entered into an income tax treaty with the U.S. more than forty years ago.[149] In addition, Switzerland is a party to nearly 30 additional tax treaties. [150] Although the Swiss-U.S. tax treaty provides for the reciprocal exchange of tax information, the U.S. Treasury continues to push for more comprehensive information exchange provisions similar to those contained in more recent U.S. tax treaties and information exchange agreements.[151] Switzerland and the U.S. have entered into several mutual assistance agreements, including a 1973 agreement to provide assistance in tax matters involving organized crime figures, and a 1981 agreement providing information on insider traders. [152] Under a 1983 law, Switzerland agreed to provide international legal assistance in criminal tax matters.[153] This law, however, does not apply when there is simple tax evasion by Swiss standards. [154]
3. Confidentiality and Secrecy Laws
The Swiss government imposes substantial criminal penalties, including both fines and imprisonment, for violations of bank secrecy laws. [155] Only in criminal cases will the Swiss courts order this veil of secrecy to be lifted. [156] Because the Swiss government generally does not consider mere tax evasion to be a crime, the veil of secrecy is rarely lifted. [157] Only in cases where the taxpayer has falsified records, do the Swiss consider such acts a crime.[158] However, because the OECD and EU continue to exert pressure on the Swiss government to make simple tax evasion a crime, there is a growing risk that the Swiss and foreign governments may soon be able to penetrate the long-standing Swiss bank secrecy laws in matters involving tax evasion. [159]
4. Tax Haven Status Under 26 June 2000 OECD Report.
The OECD did not list Switzerland as a tax haven. [160]
Conclusion
Any individual concerned with the disclosure of private financial information and the transfer of such information between nations must first consider whether the country that he/she is engaged with: (1) is a party to any tax treaties which contain information exchange provisions; (2) is a party to any tax information exchange agreements; (3) has entered into any agreements to provide mutual assistance in tax matters; (4) has strict bank secrecy laws that are regularly enforced; and (5) has entered into any mutual legal assistance treaties. Today only a handful of jurisdictions remain completely independent from any tax treaties, information exchange agreements or mutual legal assistance treaties.
Although several of the jurisdictions discussed in this memorandum continue to provide a refuge for individuals who wish to protect their financial interests and maintain their privacy, the general trend is that an increasing number of jurisdictions are making commitments to eliminate harmful tax practices by embracing international tax standards for transparency, exchange of information, and fair tax competition. Bermuda’s advance commitment to the OECD to eliminate harmful tax practices by the end of 2005 is one example of a historically conservative tax haven reforming its information exchange practices. Similarly, the Cayman Islands, a country with no tax treaties or information exchange agreements, has also committed to eliminating harmful tax practices by the year 2005. It remains to be seen how a nation such as the Cayman Islands, which makes it a crime for attorneys, accountants, bank officers and staff employees to divulge confidential client information, will be able to reconcile these conservative policies with the international tax standards that it has promised to embrace. However, individuals concerned with the disclosure and transfer of their private financial information from places such as Bermuda and the Cayman Islands to the competent tax authorities of other jurisdictions such as the U.S. should consider the new commitments being made by these traditionally conservative tax haven jurisdictions.
Several of the historically conservative tax havens, however, continue to be listed by the OECD as harmful tax jurisdictions. Thus, individuals engaging in financial dealings in jurisdictions such as the Bahamas, the British Virgin Islands, Guernsey, Jersey, Isle of Man, Liechtenstein, and Switzerland are at less risk of having private financial dealings disclosed by the tax authorities in these nations than by the authorities in such places as Bermuda and the Cayman Islands which have recently committed to improving their information exchange practices. However, over the course of the next decade, the remaining handful of tax havens will likely begin to embrace international tax standards for transparency, exchange of information, and fair tax competition under continued pressure from the OECD and the international community.
*Invaluable assistance with the preparation of this study was provided by Adam Siegel, a 3rd year student at Cornell University Law School, and by Arianne deGovia, a 3rd year student at Harvard Law School. Additional support was provided by Mark Arnold, Patricia Hernandez and Michael Silva of Holland & Knight, LLP.
September 11, 2000, Andrew H. Weinstein