Is it possible to question tax officers working for the tax authorities, the FIOD or public prosecutors as witnesses in a civil provisional examination when a criminal investigation of fraud is still pending? According to newspaper reports, this is indeed possible. Het Financieel Dagblad, a Dutch financial newspaper, reports a ‘groundbreaking decision’ from the Supreme Court on 7 September 2018. However, is this decision as groundbreaking as alleged?
What was the matter?
In 2009, the Dutch Tax and Customs Administration received a letter that was said to have come from the Internal Revenue Service (IRS, federal tax authorities of the US). In this letter, an asset manager is accused of embezzlement and money laundering. Following this, the tax authorities start a tax audit, followed by a criminal investigation by the Public Prosecution Service. However, research by the asset manager showed that the letter was false. It did not come from the IRS but was written by a former employee of the asset manager who wanted to denounce abuses and had also spoken to tax authorities officials. Because the asset manager was still under suspicion, he wanted to know the ins and outs of the matter. The examining judge was asked to interrogate a number of employees of the tax authorities, the FIOD and public prosecutor as witnesses, but that request was almost entirely rejected.
Next came an original step: the provisional witness examination
In a civil procedure, a subdistrict court was asked if it would be possible to hold a provisional witness examination so that the employees of the tax authorities, the FIOD and public prosecutors could be interrogated as witnesses, among others. The thought must have been: one way or another, I’m going to get there. The former employee (or the whistle- blower) was also mentioned as a witness. The subdistrict court allowed the request. Then, the State of the Netherlands intervened in the debate and appealed to the court of appeal. This court ruled that it is not permitted to question civil servants of the tax authorities, the FIOD and public prosecutors as witnesses, because – in short – it cannot be ruled out that questioning these witnesses could mean an interference with criminal proceedings.
The Supreme Court’s decision
The Supreme Court annulled the court's decision, giving a number of grounds which in themselves cannot qualify as being groundbreaking. For example, it was considered that a provisional examination of witnesses is only permissible with a view to civil proceedings. Such an examination cannot be admitted if it is requested to clarify facts for proceedings before another court (for example a criminal court). We already knew that. Furthermore, the Supreme Court repeated the criteria for the rejection of a provisional examination of witnesses. According to the Supreme Court ‘the mere circumstance’ that (in short) the same questions can be raised as in a procedure before another court (here: the criminal court), is no ground for rejection.
The key point is in the use of the words ‘the mere circumstance’. The decision by the Supreme Court, implies that this is too general a statement and you can understand why. Such a general limitation of the right of a provisional witness examination is going too far. However, the Supreme Court does not leave it at that and adds that a request for a provisional witness examination may be rejected if it is plausible that asking the same questions as in the other proceedings will effectively lead to a disruption of the investigation in that other court. Thus, the bar for a rejection of the provisional witness examination is set somewhat higher.
However, in anticipation of the referral procedure the Supreme Court instigated something that can make it rather difficult for the interrogator in the preliminary witness examination. For example, if a witness will not be able to declare anything that in the opinion of the civil court may be relevant to the civil proceedings, a request for the interrogation of such a witness may be rejected on that ground. Furthermore, the Supreme Court also pointed out that the judge before whom a witness is interrogated can prevent the answering of questions that are not deemed to be of importance.
According to the Supreme Court, the judge can also use this competence if there is a substantial interest in the non-disclosure of certain facts, or if the witness has a duty of confidentiality on the basis of which he/she is entitled to invoke a right of non-confidentiality but fails to do so. And it is a fact that officials of the tax authorities are legally bound by confidentiality. All in all, this Supreme Court’s decision seems to have limited rather than broadened the possibilities to examine officials of the tax authorities, the FIOD or the public prosecutor.
This hardly seems groundbreaking
But this does not mean that the provisional witness examination cannot be useful in cases in which the claimant is also a suspect in an adjoining criminal case. For example in cases of unlawful behaviour by officials of the FIOD or members of the Public Prosecution Service, which is generally difficult to prove. Hearing civil servants under oath can then offer a solution.