Wealthy Argentinian loses Swiss legal battle to stop bank data exchange

The Swiss Federal Court has rejected a request from an account holder to prevent his bank details from being passed on to his country of residence under the automatic exchange of information. © Keystone / Laurent Gillieron

An affluent Argentinian entrepreneur objected to information on assets he held in Switzerland being sent to Buenos Aires. The automatic exchange of financial data is designed to combat tax evasion. Switzerland’s Federal Court, in its first decision on this issue, rejected his request.

Alfredo Alberto Román, 80, is one of Argentina’s wealthiest citizens, and he holds assets in Switzerland in a family trust. When a Swiss-Argentinian treaty on automatic transmission of financial data came into force in 2018, Román attempted to prevent information about his trust being sent to Argentina.

The Federal Tax Administration (FTA) rejected his request to block the data transmission, and in 2020 Román lost on appeal at the Federal Administrative Court. He then decided to file an appeal with the Federal Court, the country’s highest judicial authority.

The Federal Court considered the case sufficiently important to grant it a public hearing on June 6, 2023. Gotham CityExternal link was in attendance. The Court published its decision on July 14, making it clear that the plaintiff had lost the argument.

The ‘crane tsar’

Known in Argentina as the “crane tsar”, Román built the largest cargo port in Buenos Aires as part of his logistics empire. When he sold the majority of his company in 2008, he became the 11th-wealthiest person in Argentina. According to Forbes, his fortune amounts to $800 million (CHF705 million).

Román claims to be in good standing with the Argentinian tax authorities. In his Swiss legal case, he maintained that “the absence of the rule of law in Argentina compromises data security and therefore jeopardises the life, liberty, and assets of people subjected to the automatic exchange”. Román’s defence lawyers emphasised that their client and his family risked being kidnapped or extorted.

The defence team also denounced the “Argentinian authorities’ disregard for personal-data protection, […] the endemic corruption among Argentinian officials, the increasing activity of criminal groups, and the Argentinian government’s lack of integrity”.

This argument did not convince the Federal Court. The judges concluded that the “alleged risk to [the Román family’s] security […] is linked to their fortune, which is, based on the evidence, already public knowledge in Argentina, so we do not believe that the automatic exchange of information would expose them to additional risk in this regard”.

For years the Argentinian press has suggested that the $800 million attributed to Román is a significant underestimate. In 2020 the magazine La Política Online claimed that the patriarch held at least that amount abroad.

According to revelations published in 2016, Román was close to the former Argentinian president Mauricio Macri, who led the country from 2015 to 2019. Román allegedly supported Macri’s campaigns.

‘Technical error’

The FTA had agreed not to transmit information about the Román family trust until the legal proceedings in Switzerland were concluded. However, the Federal Court ruling acknowledges that the data were nonetheless sent to Argentina in 2020.

“The Federal Tax Administration indicated that the denounced transmission had occurred due to a technical error, but that it had proceeded with the cancellation of the corresponding transmission dated September 1, 2022”, the Federal Court wrote.

Román is represented by David Wilson and Ksenia Iliyash at Schellenberg Wittmer.

Wilson responded to a Gotham City inquiry with the following statement:

“Once bitten, twice shy – our clients, like many Argentinian citizens, were unfortunately victims of abusive practices by the Argentinian authorities in the past. Several Argentinian officials have been charged with abuse of power, violation of tax secrecy, and perjury, and the director of the Argentinian tax administration was even charged. We therefore regret that the Federal Court chose to ignore the legitimate concerns of tax-compliant Argentinian citizens regarding the risk of misappropriation of data transmitted by Switzerland under the automatic exchange system.”

In a comment published on LinkedIn, Wilson also condemned the FTA’s data “leak”:

“In this case, the FTA transmitted information concerning the trust’s settlors [the people who established the trust] to the Argentinian authorities in 2020, despite the fact that the exchange should have been suspended throughout the appeal and despite the FTA’s specific commitment to block the automatic exchange until the matter was settled. Yet the Federal Court refuses to decide whether the unjustified data transmission during the legal proceedings deprived the lawsuit of its purpose. This is scandalous, especially because it’s not an isolated leak but rather one of several leaks made by the FTA to the detriment of a number of our clients and over several fiscal periods!”

In the same comment, Wilson suggested that clients from several countries have also challenged the implementation of automatic exchange:

“The Federal Court focuses on the fact that the foreign state (in this case Argentina) ensures adequate data protection […]. I look forward to seeing how the Swiss courts will rule in cases involving countries that do not meet these criteria, like Saudi Arabia, Mexico, etc.”

Wilson says he has filed an appeal with the European Court of Human Rights (ECHR).

Document relevant to this article: Federal Court – Decision of June 6, 2023

Adapted from French by Katherine Bidwell/gw