Can I Be Extradited For Commiting A Tax Crime?

treatyExtradition, the formal surrendering of a person by one country to another country in order that the fugitive may be prosecuted or punished, often depends on the existence of an extradition treaty.  While the United States has attempted extradition proceedings in the absence of a treaty, the US courts have generally not supported these attempts and so, the bite of law enforcement may be somewhat limited in the absence of an appropriate extradition treaty.

An extradition treaty is in the nature of an agreement or contract between its signatory countries.  Extradition treaties have been signed between the US and over one hundred nations throughout the world.

Most treaties contain a list of crimes for which extradition may be granted such as murder; voluntary manslaughter; rape; unlawful abortion; kidnapping; burglary; larceny; embezzlement; fraud; bribery and so on.

Modern Treaties Permit Extradition For Felony Offenses

The more modern extradition treaties embrace a so-called “dual criminality approach”. Under this approach the act in question must be a crime under the laws of both the USA and the country where the fugitive is taking refuge.  Under these treaties, generally speaking, all felonies are extraditable offenses.  Such modern treaties also delineate various classes of offenses the commission of which would not be grounds for  extradition (these include for example, military and political offenses; offenses carrying capital punishment; crimes that are punishable under only the laws of one of the treaty signatories; crimes committed outside the country seeking extradition; instances when the fugitive is a national of the country in which extradition is sought and so on).

Certainly many tax crimes rise to the level of felony offenses. Traditionally, however, tax crimes were excluded from the list of treaty offenses for which extradition would be granted on the historical grounds that these involved the sacrosanct “revenue matters” of a particular country.  As a general matter, the courts in one country were not very willing to become involved in the revenue matters of another because such interference could lead to questioning of that country’s fiscal and tax policy matters. Due to the diversity among various economic systems, these were areas in which other nations did not wish to venture.

Modern Day Extradition For Tax Crimes

This traditional viewpoint is changing, however. With increased globalization, strong revenue pressures being felt worldwide due to economic downturns, and encouragement of global cooperation by such international organizations as the OECD and the Commonwealth Secretariat, the various nations are evidencing more of a willingness to pull together when it comes to fiscal matters.  The present trend is clearly to include tax offenses in extradition treaties. (see e.g., US-France Extradition Treaty at Article 2(6)).  In addition, a large number of mutual assistance treaties and/or executive agreements covering international tax enforcement cooperation, particularly tax information exchange agreements, have been signed. More will undoubtedly follow.  As a result, the likelihood of success for the US government to obtain extradition for tax crimes is decidedly becoming more favorable.

As a practical matter enforcing the terms of an extradition treaty is a very time consuming and expensive undertaking.  The extradition process begins with a request submitted through diplomatic avenues.  In the USA, the extradition request works its way through the Department of Justice and then, if approved there, to the Department of State.  It may then be presented to a federal judge who will order a hearing to determine various initial matters, for example, whether the request was made in compliance with the relevant treaty, whether probable cause exists that the fugitive committed the specified offense and so on.  If the various requirements are satisfied, the judge will certify the case for extradition at the discretion of the Secretary of State. It is inconceivable that the US government would pursue small time cases via the extradition pathway. In fact, other less formal methods may be used such as deportation through the country’s immigration laws, or even in some extreme cases use of so-called “irregular rendition” which simply means kidnapping or deceiving the fugitive!

Virginia La Torre Jeker J.D., has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has 30 years of experience specializing in US and international tax planning as well as international commercial transactions. She has been based in Dubai since 2001; prior to that time she worked in Hong Kong for 15 years as a US tax consultant for international law firms, major banks (including HSBC) international accounting firms (Deloitte) and trust companies. Early in her career she worked in New York with the top-tier international law firm, Willkie Farr & Gallagher.

Virginia is regularly asked to speak at numerous conferences and seminars for various institutes and commercial organizations; publishes a vast array of scholarly works in her area of expertise, been interviewed by CNN and is regularly quoted (or has her articles featured) in local and international publications. She was recently appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. She was a guest lecturer at the University of Hong Kong, LL.M Program (Law Department) and served as an adjunct Business Law professor at the American University of Dubai and at the American University of Sharjah where she also taught the legal / ethical aspects of internet law and internet based transactions.

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