Our Insights

You can download this press release as a PDF in English or Russian.

There have been press reports in Ukrainian media concerning the progress of the cases brought by President Yanukovych and his sons seeking annulment of the sanctions imposed by the EU against them. Some of these reports are said to be based on statements made by a supposed “spokesperson” of the Court of Justice of the European Union.*

Such reports assert that according to the spokesperson it was not correct for V.F. Yanukovych and his sons to have made their applications in the English language as opposed to the French language, and that this had hampered their cases. If, which it is hoped and anticipated is not the case, there was any such statement made by a Court spokesperson, it was wrong and should never have been made.

Not only is it inappropriate for a Court spokesperson to comment on pending cases, but the Court does not in any way discriminate against, or treat less expeditiously, cases in which the English (or any other permitted) language is the language of the case, and it would be wrong in principle if it did so. Article 35 of the then applicable Rules of Procedure expressly permits any one of a number of European languages (including English and French) to be chosen by the applicant as the language of the case, and the Court is very familiar with, and well able to conduct, cases in other permitted languages just as expeditiously as those in the French language.

This is just one more example of inaccurate press reporting in Ukraine which purports to be based on leaks from European Institutions, and which contributes to a false picture as to the content and course of the annulment applications of V.F.Yanukovych and his sons. In order to seek to correct this false picture, and to enable the public to see what is actually happening in the cases, the law firm Joseph Hage Aaronson had already, before this last incident, written on behalf of President Yanukovych and his sons to the Council of the European Union and other relevant recipients requesting their consent (prior to an application to the Court) to the public being given access to the files of their annulment applications, including access to all written pleadings of the parties and the orders of the Court. The Council and other relevant parties have not yet even replied to this request.

* e.g. Суд ЄС досі не призначив розгляд справи Януковича, який помилився мовою

Joseph Hage Aaronson is the only firm to achieve the top tier ranking in Band 1 for UK Contentious Tax by Chambers and Partners for 2018. It is also the 4th consecutive year that our team and individual lawyers have been named. The contentious tax team is led by five partners: Graham Aaronson QC, the leading tax silk of his generation, Simon Whitehead, Paul Farmer, Michael Anderson and Ray McCann. All are supported by a strong team of in-house barristers, solicitors and paralegals, bringing together the best qualities of the bar with those of a law firm to deliver a cohesive approach to advising and representing our clients throughout all stages of a dispute.

Ranked Lawyers:

Graham Aaronson QC is a renowned tax expert who acts for significant clients and organisations in high-profile disputes. Clients say he has “very significant depth and breadth of experience, and is always highly responsive.”

The “superb” Paul Farmer is experienced in acting in high-value tax cases. Sources note he is “extremely good at handling litigation.”

Simon Whitehead regularly advises clients on contentious tax matters, with a focus on corporation tax. Sources state he has “excellent technical knowledge and provides superb client service.”

Michael Anderson specialises in advising clients on complex and high-profile tax disputes. One client states he is “highly credible, and it is easy to develop an effective working style with him because he is very approachable and responsive.”

Philippe Freund is an accomplished tax lawyer experienced in working with clients in the financial sector. Sources note he is “technically very able, helpful and willing to make himself available at short notice to assist with queries and to provide support.”

View further commentary from the Chambers UK guide

Article originally published in Lexis®PSL

Arbitration analysis: The ever-growing use of technology in the practice of law continues apace. From the early days of word processing, bulk photocopying and faxes, through to email, video conferencing and webinars, to today’s world of big data and artificial intelligence (AI), practitioners’ day-to-day working lives have changed. But what does this mean for international arbitration? Richard Kiddell, partner at Joseph Hage Aaronson, provides his views on the topic.

Continue reading on Lexis®PSL (subscription required) or access the complete article in PDF format.

Possible Presage to ECJ Final Judgments in Apple, Starbucks, Amazon and Fiat Cases

Yesterday, the ECJ held that the General Court erred in law in concluding that a state measure granted to Spanish companies was not selective because the Commission had not identified a particular category of undertakings exclusively favoured by the tax measure concerned.

This judgment is supportive of the Commission’s arguments in the pending Apple, Starbucks, Amazon and Fiat cases and a first indicator of what the ECJ might ultimately decide. In these four cases, the Commission adopts a broad approach towards the reference tax system, which is deemed to be the general corporate income tax system of the respective Member States.

If the ECJ follows the same logic in the pending cases and the measures offered to Apple, Starbucks, Amazon and Fiat are found to derogate from the reference tax regime and to apply a different treatment to companies that are in comparable situations, then the Court could conclude that the measures are selective. This would appear to be the case even if the state measure is in principle open to all companies.

Please click here for the CJEU press release, here for the Commission press release and here for the CJEU judgment.

EU law principles are not limited to the EU/EEA

On 21 September 2016, the Court of Justice of the European Union (CJEU) found that the Agreement between the EU and Switzerland on the free movement of persons precludes legislation that denies a tax exemption for German teachers working in Switzerland.

One of the many agreements signed between Switzerland and the EU provides for free movement of persons on the basis of the rules applying in the European Community. Under German law, income from part-time activities as a lecturer carried out for a public establishment established in an EU/EEA Member State is exempt from tax up to a certain amount. Mr Radgen, a German national and resident, taught on a part-time basis at an establishment governed by public law in Switzerland. The activity was carried out under an employment contract between him and that establishment. The German tax authorities refused to apply the exemption on the ground that it did not apply in the Swiss context, as Switzerland is outside the EU and EEA. The CJEU, however, found that the difference in treatment was liable to deter resident German taxpayers from exercising their right to free movement by taking up employment in Switzerland and that German teachers in Switzerland were in a comparable situation to German teachers in Germany.

This case shows that EU law principles (in addition to the free movement of capital) are not constrained solely to the EU/EEA.

This article appears in the JHA October 2016 Tax Newsletter, which also features:
You can download the complete newsletter as a PDF here: October 2016 – Tax Newsletter.

1. Judgment in Six Continents v HMRC [2016] EWHC 2426 (Ch) by Christopher Kientzler
2. Etablissements Fr. Colruyt Case C- 221/15

On 14 January 2015 the General Court handed down its judgment in Gossio, a sanctions case.

Gossio concerned an application for annulment of Regulation 560/2005, Council Decision 2010/656/CFSP and Council Implementing Decision 2012/144/CFSP (establishing restrictive measures in view of the situation in Côte d’Ivoire), and of the decision of 17 May 2013 confirming and prolonging the above mentioned restrictive measures in so far as they maintained the listing of the applicant. Mr Gossio later amended his application to include annulment of Council Implementing Decision 2014/271/CFSP and Council Implementing Regulation 479/2014 in so far as they maintained his listing. Requests by Mr Gossio to the Council to remove his name from the relevant sanctions list had been repeatedly rejected.

Council Implementing Decision 2012/144/CFSP stated the following about Mr Gossio:
The General Court held that:
Case T‑406/13 Marcel Gossio v Council, 14 January 2015, currently only available in French

Has fled Côte d’Ivoire. Subject of an international arrest warrant. Involved in the misappropriation of public funds and in the funding and arming of the militia. Instrumental to the funding of the Gbagbo clan and of the militia. Also a central figure in illegal arms trafficking. The sizeable sums of money he has misappropriated and his familiarity with the illegal arms networks make him a continued threat to the security and stability of Côte d’Ivoire.

• The first plea (misuse of powers and manifest error of assessment) was rejected as regards the decision of 17 May 2013, but accepted as regards Council Implementing Decision 2014/271/CFSP and Council Implementing Regulation 479/2014.
  • On misuse of powers, there was no contradiction between the initial legal bases for the restrictive measures and the most recent grounds for maintaining them. There was no evidence to show that the procedure leading to the contested acts was intended to achieve anything other than the objectives stated in the decision and the regulation. The restrictive measures were not addressed solely to persons threatening the electoral process in Côte d’Ivoire. Their objective was to fight against obstruction of the peace and reconciliation process in Côte d’Ivoire, and the applicant had been deemed a threat to the country’s security and stability.
  • On manifest error of assessment, the Council had been correct in concluding that Mr Gossio had fled the country, as there was no evidence that his departure was motivated by fear for his life or of mistreatment. He had only been awarded refugee status after his listing. It was not for the court to pass judgment on the political situation in Côte d’Ivoire, so the applicant’s contention that the Ivorian authorities had not been impartial in issuing the warrant could not be considered. Moreover, it was not relevant that other persons considered by the Council as having fled and being the subject of an arrest warrant had seen the sanctions against them lifted. Other, additional grounds for Mr Gossio’s listing had been brought by the Council. The Council’s allegation of misappropriation of public funds had been based on presumptions raised in an introductory application by an Ivorian public prosecutor. The Council’s allegation that Mr Gossio was instrumental to the funding of the Gbagbo clan and of the militia was also justified as it was based on reliable evidence, including Reports of the International Commission of Inquiry on Côte d’Ivoire and a UN Security Council Report. However, as to Council Implementing Decision 2014/271/CFSP and Council Implementing Regulation 479/2014 the Council did not take into consideration certain changes in Mr Gossio’s circumstances, notably his meetings with the new Ivorian goverment and his public declarations of support for the peace and reconciliation process, the fact that Switzerland had lifted the sanctions against him and his acquired refugee status. The Council did not bring additional information or evidence to justify Mr Gossio’s continued listing under the aforementioned instruments.
• The second plea (infringement of fundamental rights) was rejected as regards the decision of 17 May 2013.
  • The applicant’s right to the presumption of innocence had not been infringed. This presumption did not preclude the adoption of asset-freezing measures (such as the sanctions under consideration here), which did not give rise to criminal proceedings and were subject to regular review.
  • The applicant’s right to carry on business, his right of property and the principle of proportionality had not been infringed by the asset-freezing measures. The first two rights were not absolute. The sanctions imposed on the applicant were precautionary measures which contributed to the implementation of an objective of general interest to the international community, namely the fight against obstruction of the peace and reconciliation process in Côte d’Ivoire. In view of this objective, the freezing of the applicant’s assets was not disproportionate. Moreover, Member States could make exemptions for basic and other expenses, and the sanctions measures were subject to regular review.
  • The applicant’s right to respect for private and family life and the right not to be subjected to inhuman and degrading treatment had not been infringed, for the same reasons as for the right to carry on business, the right of property and the principle of proportionality above. The sanctions did not target the applicant’s wife or children, none of whom was listed. Moreover, France had effectively already authorised the use of the applicant’s funds for necessary medical treatment.
• In conclusion, Council Implementing Decision 2014/271/CFSP and Council Implementing Regulation 479/2014 were annulled in so far as they affected Mr Gossio.

The Legal 500 has ranked Joseph Hage Aaronson in Tier 1 for Tax Litigation & Investigations.

“Joseph Hage Aaronson LLP is considered by some as the ‘pre-eminent firm for tax litigation in London, and, indeed, in the UK more generally’. The group is made-up of ‘phenomenal’ silks, experienced partners and forensic accountants, who have experience of UK and EU tax litigation and particular strength in corporation tax group litigation orders.” Read further commentary from The Legal 500

Leading Individuals:

Paul Farmer

Simon Whitehead

Despite the firm only having been created in March 2013, our tax disputes team is ranked in the top tiers for tax litigation and contentious tax in The Legal 500 and Chambers and Partners respectively: the first new firm ever to achieve top ranking in both publications in its first year.

You can download this press release as a PDF in Russian and English.

Following the Ukrainian authorities’ failed attempt to intervene in President Yanukovych’s application to the General Court of the EU for sanctions to be lifted, that Court has ruled that Ukraine must pay President Yanukovych’s legal costs.

President Yanukovych started proceedings for the annulment of sanctions in May 2014.

Four months later the Ukrainian authorities applied to the General Court of the EU for permission to intervene in the annulment case. President Yanukovych opposed that application. Subsequently in December 2014 the Ukrainian authorities informed the Court that they were withdrawing their application.

Following an application made by President Yanukovych’s legal team, the General Court ruled in March 2015 that Ukraine must pay the costs incurred by President Yanukovych opposing the Ukrainian authorities’ attempt to intervene in the annulment proceedings.

The General Court’s ruling has only now been made public (see link here).

President Yanukovych’s annulment proceedings are continuing before the General Court.

Joe Hage of Joseph Hage Aaronson LLP, President Yanukovych’s UK lawyer, said:

“This is an important ruling. President Yanukovych is challenging sanctions which were imposed by the EU on the basis of false criminal allegations made by the Ukraine regime, which he vigorously denies. The Ukraine regime’s attempt to intervene in the EU sanctions proceedings was politically motivated and misguided. President Yanukovych was right to resist this, and now Ukraine must pay his legal costs.

We continue to move forward with our application to have the sanctions against President Yanukovych annulled”.

END

Step UK Annual Tax Conference 2017

Keeping up with tax changes always presents a challenge and this election year has thrown up particular difficulties. Above all in the new regime for non-domiciliaries and offshore trusts. The residential nil rate band is now up and running whilst the pension revolution continues to perplex. Recent years have seen a whole battery of provisions aimed at UK residential property and change may be on the horizon in the area of BPR and APR. Meanwhile CGT continues to create difficulties. Add to this the professional conduct issues that arise for practitioners when giving tax planning advice and this year’s course is a must attend event.

Register online at www.step.org/tax17

Emma Chamberlain OBE TEP, private client barrister at Pump Court Tax Chambers and partner at Joseph Hage Aaronson LLP will be lecturing on Foreign doms – the new regime in Newcastle, Manchester and London, covering the following topics:
Packed with quality content, this conference provides essential guidance on the current and future developments in tax.

• Becoming deemed domiciled – the new IHT, CGT and income tax rules; avoiding deemed domicile
• Rebasing and cleansing – some problem areas
• Key check points for trustees settlor and beneficiaries
• Tainting of trusts and trust protections
• IHT changes to residential property and enveloping
• New two year rule
• Loans to purchase property
• Problem areas

View full programme

14 September, Newcastle
21 September, Manchester
29 September, London
12 October, Belfast
18 October, Bristol

Please click here to download this press release.

Please click here to download this press release (in Russian).