THE CONSTITUTIONAL COUNCIL WAS ASKED TO DECIDE UPON a priority matter of constitutionality on 25 July 2016 by the Conseil d'État (decision no. 400913 of 22 July 2016), under the conditions set out in Article 61-1 of the Constitution. This matter was put forth for Ms. Helen S., by Stéphanie Auféril Esq., Marine Dupas Esq. and Stanislas Pannetier Esq., attorneys admitted to the Paris bar. It was recorded by the General Secretariat of the Constitutional Council under number 2016-591 QPC. It relates to compliance with the rights and freedoms that the Constitution guarantees in the second paragraph of Article 1649 AB of the General Tax Code in its report from Law number 2013-1117 of 6 December 2013 relating to the fight against tax fraud and serious economic and financial crime.
In light of the following texts:
- the Constitution;
- Ordinance no. 58-1067 of 7 November 1958 as amended, concerning the basic law on the Constitutional Council;
- the General Tax Code;
-Law number 2013-1117 of 6 December 2013 relating to the fight against tax fraud and serious economic and financial crime;
- The Regulation of 4 February 2010 on the procedure applicable before the Constitutional Council with respect to applications for priority preliminary rulings on the issue of constitutionality;
In light of the following items:
- the observations made on behalf of the applicant by SCP Matuchansky-Poupot-Valdelievre, Attorney at the Conseil d'État and the Cour de Cassation, registered on 22 August 2016;
- the observations of the Prime Minister, registered on 22 August 2016;
- the documents produced and appended to the case file;
Having heard Olivier Matuchansky Esq., attorney at the Conseil d'État and the Cour de cassation, and Ms. Auféril Esq. for the applicant, and Mr. Xavier Pottier, appointed by the Prime Minister, at the public hearing of 11 October 2016;
And having heard the Rapporteur;
THE CONSTITUTIONAL COUNCIL DECIDED ON THE FOLLOWING:
The second paragraph of Article 1649 AB of the General Tax Code, in its report from Law number 2013-1117 of 6 December 2013 mentioned herein above, states: "A Public Registry of Trusts has been instituted. It mandatorily lists the trusts registered, the name of the administrator, the name of the settlor, the name of the beneficiaries and the date the trust was formed".
The applicant claims that these provisions fail to take into account the law in regard to private life and are tarnished by incompetence under the conditions of this right insofar as they allow the public free and unrestricted access to confidential information related to the composition of a trust. These provisions also fail to take into account the principle of equality before the law.
- On the merits:
The freedom proclaimed by Article 2 of the 1789 Declaration of the Rights of Man and the Citizen implies the right to respect for private life; Owing to this, collecting, recording, keeping, consulting and communicating information of a personal nature shall be justified by general interest and implemented in an adequate and proportional manner.
The Public Registry of Trusts instituted by the second paragraph of Article 1649 AB of the General Tax Code identifies all trusts, under Article 792-0 bis of this Code, and declaring them is made obligatory by the first and fifth paragraphs of this Article. These are trusts which the administrator, the settlor, or at least one of the beneficiaries has its fiscal domicile in France or which include a good or a right located here. For each trust, the registry includes the date the trust was formed as well as the name of the administrator, the settlor, and its beneficiaries. The fourth paragraph of Article 1649 AB refers to a decree in the Conseil d'État and the right to specify the means to consult this Public Registry.
By these disputed provisions, through emphasising transparency of the trusts, the legislature intended to prohibit their use for the purpose of tax evasion and money laundering. It also sought the objectives enshrined in the constitution of the fight against fraud and tax evasion.
Listing, in a registry accessible to the public, the names of the settlor, the beneficiaries and the administrator of a trust provides information on the manner in which a person intends to manage his or her estate. The result is an infringement on the right of respect for private life. However, the legislature, which did not specify the quality nor the motives that justify consulting the registry, did not limit the people that have access to the information in this registry, placed under the responsibility of the tax administration. Therefore, these disputed provisions have a clearly disproportionate effect on the right of respect for private life in regard to the objectives sought. As a result, without reviewing other grievances, the second paragraph of Article 1649 AB of the General Tax Code should be declared counter to the Constitution.
- On the Effects of the Ruling of Unconstitutionality:
According to the second paragraph of Article 62 of the Constitution: “A provision declared unconstitutional on the basis of Article 61-1 is revoked as from the publication of the decision of the Constitutional Council or at a later date stipulated in the decision. The Constitutional Council determines the conditions and the limits according to which the effects produced by the provision shall be liable to be challenged". In principle, the declaration of unconstitutionality should benefit the individual who brought up this priority matter, and the provision declared unconstitutional may not be applied in proceedings pending on the date of publication of the decision of the Constitutional Council. However, the provisions of Article 62 of the Constitution provide the latter with the power to set the date of repeal and to delay its effects in time and to reconsider the effects that the provision may produce before this declaration takes effect.
In this case, no motive should justify a delay of its effects of unconstitutionality. This should take effect from the date of the publication of this decision.
Article 1. - The second paragraph of Article 1649 AB of the General Tax Code in its report from Law number 2013-1117 of 6 December 2013 relating to the fight against tax fraud and serious economic and financial crime is unconstitutional.
Article 2. - The declaration of unconstitutionality of Article 1 shall take effect under the conditions set out in paragraph 8 of this decision.
Article 3. - This decision shall be published in the Journal officiel of the French Republic and notified in the conditions provided for in Section 23-11 of the Ordinance of 7 November 1958 referred to hereinabove.