41.00 OBTAINING FOREIGN EVIDENCE 
 AND
 OTHER
TYPES OF ASSISTANCE FOR CRIMINAL TAX CASES

Updated June 2001

41.01 INTRODUCTION

41.02 OBTAINING FOREIGN EVIDENCE OR OTHER TYPES OF 

      ASSISTANCE UNDER MUTUAL LEGAL ASSISTANCE TREATIES

41.02[1] Background

41.02[2] MLATs Currently in Effect

41.02[3] The Extent of Tax Coverage in MLATs

41.02[4] Designation of a Central Authority to Administer the MLAT for Each Treaty Partner

41.02[5] Public Law Enforcement Purpose of MLATs

41.02[6] Matters for Which Assistance Is Available under MLATs

41.02[7] Types of Assistance Available under MLATs

41.02[8] Procedures for Making Requests for Assistance

41.02[9] Contents of a Request

41.02[10] Limitations on Use of Evidence or Information Obtained

41.02[11] Obligation to Return the Items Provided

41.03 MUTUAL LEGAL ASSISTANCE UNDER FOREIGN STATUTES WHERE 

NO FORMAL TREATY RELATIONSHIP EXISTS

41.04 OBTAINING FOREIGN EVIDENCE UNDER TAX INFORMATION EXCHANGE 

AGREEMENTS AND TAX TREATIES

41.04[1] Background

41.04[2] Tax Information Exchange Agreements (TIEAs)

41.04[3] TIEAs Currently in Effect

41.04[4] Information Exchange under Tax Treaties

41.04[5] Tax Treaties Currently in Effect

41.04[6] Scope of TIEAs and Income Tax Treaties

41.04[7] Designation of a Competent Authority to Administer TIEAs and Tax 

Treaties for Each Treaty Partner

41.04[8] Procedures for Making Requests For Information

41.04[9] Contents of a Request

41.04[10] Confidentiality of Information Obtained

41.04[11] Possible Problems with Exchanging Information under TIEAs 

and Income Tax Treaties

41.05 USING LETTERS ROGATORY AND OTHER JUDICIAL PROCEDURES TO 

OBTAIN EVIDENCE IN CRIMINAL TAX CASES

41.05[1] Background

41.05[2] Deposition by Stipulation, Notice, or Commission

41.05[3] Depositions by Letters Rogatory

41.05[4] Procedures for Obtaining Assistance by Letters Rogatory

41.05[5] Problems with the Letters Rogatory Process Generally

41.05[6] Specific Problems with the Letters Rogatory Process When Used in 

Criminal Tax Cases

41.06 USING COMPULSORY MEASURES TO OBTAIN FOREIGN EVIDENCE

41.06[1] Background

41.06[2] The Use of Subpoenas or Summonses to Obtain Foreign Evidence Directly

41.06[3] The Use of Subpoenas to Obtain Testimony of a Nonresident Temporarily in 

the 

United States

41.06[4] The Use of Compelled Directives to Obtain Disclosure of Financial Matters 

Covered by Foreign Secrecy Laws

41.06[5] The Use of Subpoenas Issued to 

United States

 Citizens or Residents Abroad

41.06[6] Jurisdictional Conflicts Arising from the Use of Certain Unilateral Measures

41.07 CONCLUSION

                       41.01  INTRODUCTION

      This section provides a detailed analysis of the various means 

available to federal prosecutors for obtaining foreign evidence and other 

types of international assistance in criminal tax cases.  The means analyzed 

here include mutual legal assistance treaties (MLATs) and similar processes, 

tax information exchange agreements (TIEAs) and tax treaties, 

court-sponsored procedures for taking foreign depositions, including letters 

rogatory, and the use of unilateral compulsory measures, such as subpoenas, 

for obtaining foreign evidence.

      Obtaining foreign evidence and other types of international assistance 

under the various processes described here usually requires considerable 

amounts of time and can cause significant delays in an investigation or 

trial proceeding. Thus, a prosecutor should initiate seeking such evidence 

or assistance through the appropriate process as soon as possible.

      It is extremely important to remember that no 

United States

 

investigator or prosecutor should contact foreign authorities or witnesses, 

whether by telephone or other means, or undertake foreign travel, without 

obtaining the proper clearances or authorizations.  Prosecutors under the 

jurisdiction of the Department of Justice are required to coordinate and 

clear all such contacts and travel through the Office of International 

Affairs ((202) 514-0000).

       41.02  OBTAINING FOREIGN EVIDENCE OR OTHER TYPES OF

       ASSISTANCE UNDER MUTUAL LEGAL ASSISTANCE TREATIES

41.02[1] Background

      Mutual Legal Assistance Treaties (MLATs) create a routine channel for 

obtaining a broad range of legal assistance for criminal matters generally, 

including, inter alia, taking testimony or statements of persons, 

providing documents and other physical evidence in a form that would be 

admissible at trial, and executing searches and seizures.  These treaties 

are concluded by the United States Department of Justice (primarily the 

Criminal Division) in conjunction with the United States Department of 

State.  An MLAT creates a contractual obligation between the treaty partners 

to render to each other assistance in criminal matters in accordance with 

the terms of the treaty. It is designed to facilitate the exchange of 

information and evidence for use in criminal investigations and 

prosecutions.  Unfortunately, while many of the MLATs currently in force 

cover most 

U.S.

 tax felonies, several others have only limited coverage, at 

best, for tax offenses. 

41.02[2] MLATs Currently in Effect

      As of  June 1, 2001, the 

United States

 has MLATs with the following 

jurisdictions: Anguilla, 
Antigua
 
&
 
Barbuda
, 
Argentina
, 
Australia
, 

Austria

, 

the 
Bahamas
, 
Barbados
, 
Belgium
, 
Brazil
, the British Virgin Islands, 

Canada

, 

the Cayman Islands, the 
Czech
 
Republic
, 
Dominica
, 
Estonia
, 

Grenada

, Hong 

Kong
, 
Hungary
, 
Israel
, 
Italy
, 
Jamaica
, 
Latvia
, 
Lithuania
, 

Luxembourg

, 

Mexico
, 
Montserrat
, 
Morocco
, the 
Netherlands
 (including the 

Netherlands

 

Antilles and Aruba), 
Panama
, the 
Philippines
, 
Poland
, 
South Korea
, 

Spain

, 

St. Christopher and Nevis, St. Lucia, St. Vincent & the Grenadines, 

Switzerland, Thailand, Trinidad & Tobago, Turkey, the Turks and Caicos 

Islands, Ukraine, the United Kingdom, and Uruguay.

41.02[3] The Extent of Tax Coverage in MLATs

      The MLATs with Antigua & Barbuda, Argentina, Australia, Austria, 

Barbados, Belgium, Brazil, Canada, the Czech Republic, Dominica, Estonia, 

Grenada, Hong Kong, Hungary, Israel, Italy, Jamaica, Latvia, Lithuania, 

Luxembourg, Mexico, Morocco, the Netherlands (excluding the Netherlands 

Antilles and Aruba), the Philippines, Poland, South Korea, Spain, St. 

Christopher and Nevis, St. Lucia, St. Vincent & the Grenadines, Thailand, 

Trinidad & Tobago, Turkey, Ukraine, and the United Kingdom cover all 

criminal tax felonies under the Internal Revenue Code.  The remaining MLATs 

contain a variety of restrictions regarding assistance for tax offenses.  

Thus, the Swiss MLAT excludes tax and similar fiscal offenses from its scope 

except in cases involving organized crime.  However, assistance is available 

from the Swiss under one of their domestic mutual assistance statutes 

(referred to as an "IMAC") in any tax matter where a foreign tax authority 

can establish "tax fraud" as the term is used under Swiss law. Historically, 

the Swiss had considered the conduct underlying most U.S. criminal tax 

felonies as civil in nature, and establishing "tax fraud" as the term is 

used under  Swiss law had been a considerably difficult task. FN1]  

However, with the advent of the new Income Tax Treaty with Switzerland, the 

concept of tax fraud has been expanded and this expansion applies to 

requests made for mutual legal assistance under an IMAC.  See Note 1, 

supra.  The Cayman and Bahamian MLATs generally exclude offenses 

relating to tax laws except for tax matters arising from unlawful activities 

otherwise covered by the MLATs. FN2] Furthermore, each of these 

three treaties contains specific limitations on the use of evidence obtained 

for covered offenses, and, thus, evidence obtained for some other offense, 

is generally not available for tax purposes in civil or criminal 

investigations or proceedings which are subsequently conducted. FN3]

41.02[4]    Designation of a Central Authority to Administer the

            MLAT for Each Treaty Partner

      Every MLAT specifies central authorities to act on behalf of each 

treaty partner to make requests, to receive and execute requests, and to 

generally administer the treaty relationship. Under all of the MLATs to 

which the United States is a party, the central authority designated for the 

United States is the Director, Office of International Affairs (OIA), 

Criminal Division, U.S. Department of Justice.  [28 C.F.R § 0.64-1.]  

The central authority for the treaty partner is generally an entity located 

within the ministry of justice or its equivalent agency. 

41.02[5] Public Law Enforcement Purpose of MLATs

      The central authorities make requests under MLATs on behalf of law 

enforcement and judicial authorities in their respective countries who are 

legally responsible for investigating and prosecuting criminal conduct.  For 

the United States, such authorities include federal and state prosecutors, 

as well as  governmental agencies responsible for investigating criminal 

conduct,   or government agencies responsible for matters ancillary to 

criminal conduct, such as civil forfeiture.  Private parties are not 

permitted to make requests under MLATs.

41.02[6] Matters for Which Assistance Is Available under MLATs

      Assistance is available under the MLAT once an investigation or 

prosecution has been initiated by an appropriate law enforcement or judicial 

authority in the requesting state.  Thus, the United States may initiate a 

request for assistance under an MLAT when a criminal matter is at the trial 

stage, or is under investigation by (1) a prosecutor, (2) a grand jury, (3) 

an agency with criminal law enforcement responsibilities, such as the 

Criminal Investigation Division of the Internal Revenue Service, or (4) an 

agency with regulatory responsibilities, such as the Securities and Exchange 

Commission.

41.02[7] Types of Assistance Available under MLATs

      Generally, MLATs provide for the following types of assistance:

      a.    serving documents in the requested state;

      b.    locating or identifying persons or items in the requested state;

      c.    taking testimony or statements from persons in the requested 

      state;

      d.    transferring persons in custody in either state to the other for 

            testimony or other purposes deemed necessary or useful by the 

            requesting state;

      e.    providing documents, records, and articles of evidence located 

            in the requested state;

      f.    executing requests for searches and seizures in the requested 

      state;

      g.    immobilizing assets located in the requested state;

      h.    assisting in proceedings related to forfeiture and restitution; 

      and

      i.    any other form of assistance not prohibited by the laws of the 

            requested state.

      MLATs are specifically designed to override local laws in the 

requested states pertaining to bank secrecy and to ensure the admissibility 

in proceedings in the requesting state of the evidence obtained.  Thus, for 

example, MLATs typically contain provisions which, in conjunction with 

certain statutes, are directed at securing the admissibility of business 

records, or establishing chain of custody over an evidentiary item, without 

having to adduce the in-court testimony of a foreign witness.

41.02[8] Procedures for Making Requests for Assistance

      To make a request for assistance under a particular MLAT, a prosecutor 

or investigator should contact OIA at (202) 514-0000, request to speak to 

the attorney in charge of the country from which assistance will be 

requested, and collaborate on the preparation of the request.  Once the 

Director of OIA signs a request, it must be translated into the official 

language of the requested state, unless the particular MLAT provides 

otherwise.  The request will then be submitted in both language versions 

(English and the official language of the requested state) to the central 

authority of the requested state.

41.02[9] Contents of a Request

      Generally, MLATs require that a request contain the following 

      information:

      a.    the name of the authority conducting the investigation, 

            prosecution, or other proceeding to which the request relates;

      b.    a description of the subject matter and the nature of the 

            investigation, prosecution, or proceeding, including the 

            specific criminal offenses which relate to the matter;

      c.    a description of the evidence, information, or other assistance 

            sought; and

      d.    a statement of the purpose for which the evidence, information, 

            or other assistance is sought. 

      In addition, MLATs require that the following information be provided 

to the extent that such information is available:

      e.    information on the identity and location of any person from whom 

            evidence is sought;

      f.    information on the identity and location of a person to be 

            served, that person's relationship to the proceeding, and the 

            manner in which service is to be made;

      g.    information on the identity and whereabouts of a person to be 

            located;

      h.    a precise description of the place or person to be searched and 

            of the items to be seized;

      i.    a description of the manner in which any testimony or statement 

            is to be taken and recorded;

      j.    a list of questions to be asked of a witness;

      k.    a description of any particular procedure to be followed in 

            executing the request;

      l.    information as to the allowances and expenses to which a person 

            asked to appear in the requesting state will be entitled; and

      m.    any other information which may be brought to the attention of 

            the requested state to facilitate execution of the request.

41.02[10] Limitations on Use of Evidence or Information Obtained

      Generally, MLATs have provisions resticting the use of information or 

evidence furnished under their provisions, including conditions of 

confidentiality.  Accordingly, the law enforcement authorities of the 

requesting state must comply with these restrictions in using the 

information or evidence in the course of an investigation or prosecution.  

Although some MLATs are more restrictive, generally, once the information or 

evidence properly used in the investigation or prosecution becomes a matter 

of public record in the requesting state, it may be used for any purpose.

41.02[11] Obligation to Return the Items Provided

      Generally, MLATs provide that all original documents, records, or 

articles of evidence provided pursuant to an MLAT request must be returned 

as soon as possible to the state providing such items unless that state 

waives the right to have the items returned.  Items are typically returned 

by the prosecutor through the central authority.  Generally, copies of 

documents provided under an MLAT need not be returned unless the state which 

provides such copies specifically requests their return.    

 41.03  MUTUAL LEGAL ASSISTANCE UNDER FOREIGN STATUTES WHERE NO FORMAL 

        TREATY RELATIONSHIP EXISTS

      New effective approaches have been recently developed for obtaining 

assistance from countries with which the U.S. has no MLAT relationship.   As 

a result, letters rogatory issued by a court are no longer the exclusive 

means of securing formal legal assistance from a country with which the 

United States has no MLAT relationship.  Thus, there are a number of 

non-Mutual Legal Assistance Treaty countries with which OIA has established 

a practice of making and receiving formal legal assistance requests, dealing 

directly with its counterpart office in the foreign ministry of justice. 

      Such requests typically follow a format similar to that employed under 

MLATs, and are sometimes referred to as "MLAT-Type" requests.  Legal 

assistance in these circumstances is provided to the extent permitted by 

relevant domestic legislation.  Countries in this category include Ireland, 

Japan, New Zealand, Channel Islands, Isle of Man, and Liechtenstein.  

Contact the appropriate OIA Team at (202) 514-0000 for further details.

   41.04 OBTAINING FOREIGN EVIDENCE UNDER TAX INFORMATION EXCHANGE 

   AGREEMENTS AND TAX TREATIES

41.04[1] Background

      Tax information exchange agreements (TIEAs) and income tax treaties 

constitute bases for obtaining foreign-based documents and testimony, often 

in admissible form, for criminal and civil tax cases and investigations.  

These pacts are concluded by the United States Department of Treasury, with 

the assistance of the Internal Revenue Service and the Tax Division of the 

Department of Justice, and are administered by the Director, International, 

of the IRS.  For the purposes of obtaining foreign evidence, TIEAs are more 

specialized and effective than tax treaties. 

41.04[2] Tax Information Exchange Agreements (TIEAs)

      TIEAs are agreements which specifically provide for mutual assistance 

in criminal and civil tax investigations and proceedings.  This assistance 

comprises obtaining foreign-based documents, including bank records, and 

testimony in admissible form.  TIEAs are statutory creatures of the Internal 

Revenue Code. See 26 U.S.C. §§ 274(h)(6)(C) and 927(e).  

This statutory framework initially authorized the Secretary of the Treasury 

Department to conclude agreements with countries in the Caribbean Basin 

(thereby qualifying such countries for certain benefits under the Caribbean 

Basin Initiative), but later expanded this authority to conclude TIEAs with 

any country.

41.04[3] TIEAs Currently in Effect

      As of June 1, 2001, the United States had TIEAs in effect with the 

following countries:  Barbados, Bermuda, Costa Rica, Dominica, the Dominican 

Republic, Grenada, Guyana, Honduras, Jamaica, Marshall Islands, Mexico, 

Peru, St. Lucia, and Trinidad & Tobago. FN4]

41.04[4] Information Exchange under Tax Treaties

      The United States has income tax treaties with more than 50 countries 

in the world.  There are two principal purposes of these treaties:  (1) to 

reduce or eliminate double taxation of income earned by residents of either 

country from sources within the other country; and (2) to prevent avoidance 

and evasion of the income taxes of the two countries party to the treaty.  

To address the latter purpose, almost all U.S. income tax treaties contain a 

provision for exchanging information, similar in concept to TIEAs.  The 

Treasury Department places great importance on information exchange in these 

tax treaties and will not enter into a treaty relationship with any country 

that cannot meet the minimum standards of information exchange. 

41.04[5] Tax Treaties Currently in Effect

      As of June1, 2001, the United States had income tax treaties in force 

-- including exchange of information provisions -- with the following 

countries: Australia, Austria, Barbados, Belgium, Bermuda, Canada, China, 

Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, 

Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, 

Japan, Kazakhstan, South Korea, Latvia, Lithuania, Luxembourg, Mexico, 

Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, 

Portugal, Romania, Russia, Slovak Republic, South Africa, Spain, Sweden, 

Switzerland, Thailand, Trinidad & Tobago, Tunisia, Turkey, Ukraine, the 

United Kingdom, and Venezuela.  

      The Treasury Department is very active in the negotiation of new 

income tax treaties, as well as the renegotiation of income tax treaties 

currently in force. Thus, new treaty partners should be added to this list 

regularly.

41.04[6] Scope of TIEAs and Income Tax Treaties

      Under most of the TIEAs and tax treaties to which the United States is 

a party, requests for assistance may be made for any civil or criminal tax 

investigation or proceeding regarding any tax year not barred by the statute 

of limitations of the state seeking the information.

41.04[7]    Designation of a Competent Authority to Administer TIEAs and 

            Tax Treaties for Each Treaty Partner

      Every TIEA and tax treaty specifies competent authorities to act on 

behalf of each treaty partner to make requests, to receive and execute 

requests, and to administer generally the treaty relationship.  The 

Director, International (DI), Internal Revenue Service, has been designated 

to act as the Competent Authority for exchanging information under TIEAs and 

tax treaties under the authority of the Secretary of Treasury.  The specific 

office acting under the direction of the DI to make and receive requests for 

information under TIEAs and income tax treaties is the Exchange of 

Information Team.  The competent authority for the treaty partner is 

generally an entity located within the ministry of finance or its equivalent 

agency.  

41.04[8] Procedures for Making Requests For Information

      If you wish to explore making a request for evidence or information 

under a TIEA or tax treaty, simply call the general number for the Exchange 

of Information Team ((202) 874-1624) in the Office of the DI and ask to 

speak to the Exchange Analyst who is responsible for the country where the 

information is located.  Usually, the investigator or prosecutor in charge 

of the case will draft the initial version of the request and forward this 

draft to the Exchange Analyst, or the Revenue Service Representative (RSR) 

in charge of the country where the information is located, FN5]  for 

review.  Subsequently, the request is formalized and sent to the foreign 

Competent Authority for execution.

41.04[9] Contents of a Request

      A request under a TIEA or income tax treaty should contain, 

inter alia, the following:

      a.    The taxpayer's (defendant's) name and address, and, if 

            applicable, social security number, place and date of birth, and 

            whether the taxpayer is a citizen of the United States;

      b.    The names and addresses of pertinent entities affiliated with 

            the taxpayer and the nature of such affiliations;

      c.    A brief resume of the case with particular reference to the tax 

            issues; 

      d.    A detailed statement of the information sought and why it is 

      needed;

      e.    A statement of the efforts made to secure the desired 

            information prior to the request and why the efforts were not 

            successful (including comment on any relevant data supplied by 

            the taxpayer and the reasons for considering such data 

            inadequate);

      f.    If the records of a foreign affiliate of the taxpayer are to be 

            examined, the name and address of the custodian of the records 

            and a document authorizing the custodian to permit the 

            examination or an explanation as to why the authorization was 

            not obtained;

      g.    All pertinent names, addresses, leads, and other  information 

            that may be helpful in complying with the request; and

      h.    Requests for bank account information should specify the branch.

      To the extent known, the following information should also be 

transmitted with the request:

      i.    Date upon which a response is required (e.g., for statute 

            of limitations purposes) or any other facts indicating the 

            urgency of the information;

      j.    Information concerning the importance of the case and any other 

            facts which make the case unusual or worthy of preferential 

            treatment; and

      k.    The taxable years and approximate tax liability or additional 

            income involved.  

41.04[10] Confidentiality of Information Obtained

      All of our TIEAs, and virtually all of our tax treaties, currently in 

effect contain language requiring that information obtained under such 

agreements be used only for tax purposes. Obviously, such language can raise 

troublesome issues for a prosecutor conducting a grand jury investigation 

directed at both tax and non-tax crimes.  Indeed, recently certain treaty 

partners have resisted executing requests for information made in such cases 

based on their view that the obligation of confidentiality forbids use by a 

grand jury considering non-tax crimes.  To address this situation, the 

Treasury Department and the Justice Department jointly decided to undertake 

using cautionary instructions to the grand and petit juries in such cases. 

      Under this approach, the prosecutor would caution the grand jury, as 

would the trial judge the petit jury, that the evidence obtained under the 

tax agreement could not be utilized to draw inferences of guilt regarding 

the non-tax offenses.  This approach would also require the trial judge to 

ignore the evidence for the purposes of a defendant's motion to dismiss 

under Fed. R. Crim. P. 29.

41.04[11]   Possible Problems with Exchanging Information under TIEAs and 

            Income Tax Treaties

      Although exchanging information under TIEAs and tax treaties has been 

relatively successful, there are a variety of problems which can arise.  For 

example, officials of some countries having civil law systems balk at 

executing tax treaty requests in criminal tax cases, especially those 

arising from grand jury investigations.  This hesistancy arises from the 

belief that tax treaties, which they consider to be part of an 

administrative governmental process, should not be used for 

judicial matters. This problem can be aggravated where non-tax 

offenses are also under investigation, given the ever-present provision in 

these agreements dealing with confidentiality.  See 41.04[10], 

supra.  Also, certain countries will provide treaty partners only 

with information which currently exists in their tax files regarding a given 

taxpayer, and will not undertake to gather information from other sources, 

including third parties.  Finally, some treaty partners, even if they will 

undertake to gather information from sources other than their tax files, 

will not obtain and provide financial information, such as bank records, 

because of bank secrecy laws. 

    41.05  USING LETTERS ROGATORY AND OTHER JUDICIAL PROCEDURES TO OBTAIN 

           EVIDENCE IN CRIMINAL TAX CASES

41.05[1] Background

      Before the advent of tax treaties, MLATs, TIEAs, and other types of 

mutual assistance agreements, law enforcement authorities (just as private 

litigants) primarily relied upon deposition by stipulation, deposition by 

notice, deposition by commission, and letters rogatory, all judicially 

sponsored procedures, to obtain evidence abroad in both civil and criminal 

cases.  See Fed. R. Crim. P. 15.  This section briefly explores the 

basics of these various procedures and their limitations, especially in 

criminal tax cases.

41.05[2] Deposition by Stipulation, Notice, or Commission

      There are three types of procedures under which a U.S. prosecutor can 

obtain foreign source testimony without the assistance of foreign 

authorities, assuming the witness is willing to testify voluntarily and the 

foreign country's laws do not prohibit the litigant's taking of that 

testimony.  

      First, the parties to the litigation may agree to take testimony 

abroad by stipulation.  See Fed. R. Crim. P. 15(g).  Under this 

procedure, the parties simply agree as to the necessary circumstances of the 

deposition, i.e., the official before whom the testimony will be 

taken, the time and place of the deposition, the type of notice to be given, 

the manner in which the deposition is to be conducted.   If the parties can 

so agree, the stipulation procedure is the most expeditious method of taking 

foreign testimony. 

      Second, a litigant may take a foreign deposition by notice.  

See Fed. R. Crim. P. 15(d), providing that depositions in criminal 

matters shall be taken and filed in the same manner as civil actions (as 

provided for in Fed. R. Civ. P. 28(g)).  Under this procedure, the moving 

party may arrange a deposition "on notice before a person authorized to 

administer oaths in the place in which the examination is [to be] held, 

either by the law thereof or by the law of the United States,..."  Fed. R. 

Civ. P. 28(b)(1).  This party must make the necessary arrangements for the 

deposition, such as assuring the presence of the witness, scheduling the 

services of an appropriate foreign official, a reporter for the transcript, 

and, if necessary, an interpreter. 

      Third, a litigant may take a foreign deposition by commission.  

See Fed. R. Crim. P. 15(d), providing that depositions in criminal 

matters shall be taken and filed in the same manner as civil actions (as 

provided for in Fed. R. Civ. P. 28(g)).  Under this procedure, the moving 

party may arrange a deposition "before a person commissioned by the court, 

and a person so commissioned shall have the power by virtue of the 

commission to administer any necessary oath and take testimony,..."  Fed R. 

Civ. P. 28(b)(2).  This procedure is similar to the notice procedure except 

that the court appoints the person, i.e., the commissioner, before 

whom the deposition is to be taken. 

      Each of these procedures is available to United States prosecutors 

handling criminal tax cases, FN6] but, as mentioned above, only 

where the foreign-based witness voluntarily submits to the deposition and 

the particular country does not object to the evidence taking within its 

borders.  The latter condition becomes prohibitive if the state in question 

is a civil law country.  Such jurisdictions are inclined to regard evidence 

taking by any person other than their own legal authorities as violative of 

their sovereignty.  Where such circumstances bar any of these three 

approaches and no treaties or agreements for assistance are available, the 

last resort is usually to a letter rogatory to obtain evidence abroad.

41.05[3] Depositions by Letters Rogatory

      The traditional method used by United States litigants to enlist the 

assistance of foreign authorities to obtain evidence abroad, in both civil 

and criminal cases, is a letter rogatory, also known as a letter of request. 

      Basically, a letter rogatory is a formal request from a court, in 

which an action is pending, to a foreign court to perform some judicial act.  

If the foreign court honors the request, it does so based on comity rather 

than any sort of strict obligation.  As this definition suggests, a letter 

rogatory can usually only be used in a proceeding which has actually 

commenced, such as in the post-indictment stages of a criminal case or the 

post-complaint stages of a civil case, but this is not an iron-clad rule. 

FN7]  The route of a letter rogatory is quite circuitous and 

involves many diverse entities in an uncoordinated process.  Typically, a 

litigant initiates the process by applying to the court, before which the 

particular action is pending, for the issuance of a letter rogatory, 

supporting the application with a set of complicated and formalistic 

pleadings. 

      Upon signature by the court, the letter rogatory must be transmitted 

through diplomatic channels, which involves not only the U.S. State 

Department but also the foreign ministry of the country involved.  The 

foreign ministry delivers the request to the country's ministry of justice, 

which in turn delivers it to the foreign court originally contemplated to 

execute the letter request. If the request is successfully executed, the 

evidence must retrace the path of the request.

41.05[4] Procedures for Obtaining Assistance by Letters Rogatory

      The procedures for utilizing the letters rogatory process, once a 

prosecutor has secured the court's leave to do so under Fed. R. Crim. P. 15, 

are not as well defined and standardized as those for obtaining assistance 

under MLATs, TIEAs, and tax treaties.  For example, the channel for sending 

a "letter request" (the term often employed for a letter rogatory request, 

especially for the countries following the common law system of the United 

Kingdom) to certain countries is the State Department, as generally 

described above.  However, for certain countries, such as the United Kingdom 

and Hong Kong, OIA has developed an expedited channel for transmitting 

letter requests, so that certain stopping points along the way of the 

traditional channel have been eliminated, thereby speeding up the overall 

process.

      Also, the form of the letter request can vary according to the country 

of destination.  Thus, the best approach for initiating a letter request is 

to follow the initial phase of the MLAT procedure, namely, contact OIA 

(202-514-0000) and request to speak to the attorney in charge of the country 

from which assistance is sought.

41.05[5] Problems with the Letters Rogatory Process Generally

      While the letter rogatory procedure is the traditional method of 

obtaining assistance abroad, it is certainly not without its flaws.  Thus, 

there is no obligation that the foreign country honor the request; the 

foreign country's enabling legislation, if any, may not provide any 

exceptions to that country's bank secrecy laws; there are no mutually agreed 

upon procedures which ensure the obtaining of evidence in admissible form; 

the multiple stages of the process, involving diverse entities, generate 

serious time delays; and, the procedure may not be available at all crucial 

stages of a proceeding, e.g., the investigation of a criminal 

offense, where it may be needed most.  To address these critical problems, 

law enforcement authorities developed new methods to gather foreign 

evidence, such as the MLAT.

41.05[6]    Specific Problems with the Letters Rogatory Process When

            Used in Criminal Tax Cases

      In addition to the problems which afflict the letters rogatory process 

generally, prosecutors seeking to obtain foreign evidence through this 

process for tax cases may face a unique roadblock in jurisdictions following 

the common law tradition of the United Kingdom. FN8]  This possible 

obstacle is the international rule of comity that one nation will not 

directly or indirectly enforce the revenue laws of another nation.  

      In its most basic form, the rule is that the courts of one country 

will not enforce a judgment for taxes issued by the court of another 

country. FN9]  The rule seems to have originated in two opinions of 

Lord Mansfield in 1775 and 1779. FN10]  However, the modern bedrock 

of the rule seems to be the House of Lords' decision in Government of 

India v. Taylor, [1955] 2 W.L.R. 303 (hereinafter India v. 

Taylor), FN11] where the tax authorities of India sued to 

collect moneys in the United Kingdom based on a tax judgment issued by an 

Indian court.  While most common law jurisdictions, including the United 

States, seem to accept this basic form of the rule as elementary and without 

dispute, FN12] its application beyond this realm has varied.   In 

one of its broader forms, the rule prohibits one country from granting 

another country's request for information or evidence for any tax-related 

proceeding in the requesting country, either in a civil  or criminal  

matter. 

      In any event, until the decision was overturned, there had been 

serious fallout from the decision of the United Kingdom Court of Appeal in 

In re State of Norway's Application, [1987] 1 Q.B. 433 (C.A.), where 

that Court construed the rule to operate in the broader sense.  Thus, the 

United Kingdom and the common law countries which follow its legal precedent 

were rejecting the letter rogatory requests of U.S. tax authorities based on 

the dicta in that decision.  Fortunately for U.S. prosecutors seeking 

foreign evidence in tax cases, the House of Lords, the highest court of the 

United Kingdom, reversed the Court of Appeal in In re State of Norway's 

Application, [1989] 1 A.C. 723 (consolidated appeals and cross appeals), 

holding that simply providing evidence to another state for that state to 

use to enforce its revenue laws does not constitute the direct or indirect 

enforcement of another state's revenue laws.  This decision should 

dramatically enhance mutual assistance from countries following English 

Common Law in civil and criminal tax cases, especially between governmental 

authorities.

   41.06 USING COMPULSORY MEASURES TO OBTAIN FOREIGN EVIDENCE

41.06[1] Background

      The United States tax authorities do not always have an effective 

mutual assistance means available to them for obtaining evidence abroad.  

For example, in a "pure tax" case involving evidence in the Cayman Islands 

or the Bahamas, United States authorities cannot use a tax treaty,  and the 

current MLATs with these countries exclude assistance for pure fiscal 

matters from their scope. Thus, the United States may have to resort to 

unilateral action, such as a subpoena, to obtain the needed evidence.  The 

various types of unilateral compulsory process which can be directed at 

obtaining foreign-based evidence will now be explored.

41.06[2] The Use of Subpoenas or Summonses to Obtain Foreign 

         Evidence Directly

      One form of process used by government attorneys to obtain evidence 

abroad is the subpoena power applied directly to a domestically-based entity 

having some relationship to the foreign-based entity holding the records.   

If a Department of Justice attorney, or an Assistant United States Attorney, 

wants to use a grand jury or criminal trial subpoena to obtain evidence 

located in a foreign country, the prosecutor must obtain the concurrence of 

the OIA, Criminal Division, before both issuing and enforcing such subpoena.   

In determining whether to concur in such actions, OIA considers the 

following factors:  (1) the availability of alternative methods for 

obtaining the records in a timely manner, such as use of mutual assistance 

treaties, tax treaties or letters rogatory; (2) the indispensability of the 

records to the success of the investigation or prosecution; and (3) the need 

to protect against the destruction of records located abroad and to protect 

the United States' ability to prosecute for contempt or obstruction of 

justice for such destruction.   Once the concurrence of OIA to issue and 

enforce a subpoena for foreign records has been obtained, the prosecutor 

will then be required to plead a so-called comity analysis and the 

enforcement court will be required to balance the comity factors in favor of 

the government before the subpoena can be properly enforced. 

41.06[3] The Use of Subpoenas to Obtain Testimony of a Nonresident

         Temporarily in the United States

      Prosecutors assisting federal grand juries in their investigations can 

subpoena critical witnesses, such as foreign bankers, who are temporarily 

found in the United States.   United States courts have held that the 

principle of comity between nations does not require one state to relinquish 

its compulsory process on a potential witness, temporarily within that 

state, simply because his testimony may subject him to criminal prosecution 

in the other state. Furthermore, such a witness must produce documentary 

evidence notwithstanding claims that the attorney-client relationship of the 

other state is broader than that of the jurisdiction issuing the subpoena. 

41.06[4] The Use of Compelled Directives to Obtain Disclosure of 

         Financial Matters Covered by Foreign Secrecy Laws

      Prosecutors can obtain court orders compelling an account holder to 

direct a foreign bank or other institution to disclose to the prosecutor 

matters protected by foreign financial secrecy laws.   The Supreme Court has 

ruled that an order directing an account holder to sign a 

hypothetically-framed disclosure directive does not violate his Fifth 

Amendment privilege against self-incrimination. 

      Foreign courts have had mixed reactions to these directives.  A court 

of the Cayman Islands, a dependency of the United Kingdom, has held that 

such compelled disclosure directives do not constitute voluntary and freely 

given consent for disclosure as required under the secrecy laws of that 

jurisdiction. For other countries which do not have such stringent secrecy 

statutes and which follow the British common law, there is authority that 

such disclosure directives do constitute valid consent under the common law 

duty of a banker to keep the financial affairs of an account holder 

confidential.   

      Prosecutors have enjoyed widespread success in using compelled 

disclosure directives to obtain financial records from most countries, and, 

indeed, have used voluntary disclosure directives to gather financial 

records from virtually every country.  The use of disclosure directives is 

preferred over the use of compulsory process directed against U.S.-based 

branches or offices of financial institutions to obtain financial records 

located abroad, because using disclosure directives involves no real 

jurisdictional conflicts (except when seeking evidence in countries like the 

Cayman Islands) and lessens the inclination of most foreign countries to 

block production of the evidence. 

41.06[5] The Use of Subpoenas Issued to United States Citizens or 

         Residents Abroad

      Prosecutors can also use compulsory process to obtain documents or 

testimony from U.S. citizens or residents located in foreign countries.  

Thus, federal law enforcement attorneys may issue court-ordered subpoenas to 

any such individuals in any federal proceedings, criminal or civil, under 

the provisions of 28 U.S.C. § 1783, and seek sanctions under 28 U.S.C. 

§ 1784, if there is any failure to appear or produce documents. 

41.06[6] Jurisdictional Conflicts Arising from the Use of Certain 

         Unilateral Measures

      The use of certain of these unilateral measures, especially the 

subpoenas on domestic financial institutions for foreign-based records, is 

controversial and leads to protracted litigation which often fails to secure 

the intended result.  Indeed, these jurisdictional controversies led the 

Justice Department to adopt Section 9-13.525 of the United States Attorneys' 

Manual (USAM), described supra, which requires the concurrence of OIA 

for both the issuance and enforcement of such subpoenas in Department 

criminal matters.  When U.S. authorities resort to the enforcement of such 

measures, they encounter strong opposition from many different quarters.  

For example, the financial institutions served with process typically resist 

strenuously and raise every possible issue for resolution, including the 

bedrock of their position, the jurisdictional conflict between the laws of 

the two countries involved.  Even when these institutions suffer an adverse 

decision of the U.S. courts, they often choose to be subject to sizeable 

contempt sanctions  rather than produce the subpoenaed or summonsed records.  

See, e.g., In re Grand Jury Proceedings (Bank of Nova 

Scotia), 691 F.2d 1384 (11th Cir. 1982). Officials of foreign 

jurisdictions also object to the use of these measures, by instructing their 

foreign ministries to complain to the U.S. State Department, entering 

amicus appearances in the protracted litigation, and sometimes 

directing their own law enforcement authorities to take blocking measures, 

which may include the seizure of the foreign-based records to thwart 

production.  Needless to say, production of the evidence sought by the use 

of certain of these unilateral measures is not a foregone conclusion.

      At all events, as mentioned above, before a Bank of Nova 

Scotia-type subpoena can be authorized by the Criminal Division 

(see USAM., Section 13.525) or enforced by a district court, a 

prosecutor will need to establish that no alternative methods exist for 

obtaining the foreign records sought.

                        41.07 CONCLUSION

      New law enforcement treaties and agreements are continually being 

negotiated and concluded by the various responsible authorities.  

Accordingly, new means for obtaining foreign evidence may appear on the 

horizon following publication of this analysis.  For further details 

regarding the matters set forth herein, or for developments following 

publication, contact James P. Springer, Senior Counsel for International Tax 

Matters, Tax Division, Department of Justice, at (202) 514-2427.

FN 1. Indeed, the Swiss authorities and legal scholars are 

accustomed to referring to the term "tax evasion" as a civil matter, even if 

the conduct involved would constitute a felony under our law, such as the 

act of filing a false federal income tax return, where there are no other 

badges of fraud involved .  Thus, when the Swiss refer to fiscal crimes, 

they use the term "tax fraud," which, until the new tax treaty with 

Switzerland was negotiated, had a much more restricted meaning under Swiss 

law than under U.S. law. See, e.g., U.S.--Swiss MLAT, Art. 1, 

Sec. 1(a), and Art. 2, Secs. 1 and 2; J. Knapp, Mutual Legal Assistance 

Treaties as a Way to Pierce Bank Secrecy. Case W. Res. J. Int'l L. 

405-08, 418-20 (1988); J. Springer, An Overview of International Evidence 

and Asset Gathering in Civil and Criminal Tax Cases, 22 Geo. Wash. J. 

Int'l L. & Econ. 277, 303-08 (1988); Aubert, The Limits of Swiss Banking 

Secrecy under Domestic and International Law, 273 Int'l Tax & Bus. Law. 

273, 286-288 (1984). However, the Protocol to the new Income Tax Treaty with 

Switzerland expands the concept of tax fraud to include many of the badges 

of  fraud set forth in Spies v. United States, 317 U.S. 492, 499 

(1943), and the Memorandum of Understanding for the new Income Tax Treaty 

with Switzerland makes this expanded concept of tax fraud applicable to 

requests for mutual legal assistance made under an IMAC.

FN 2. Cayman MLAT, Article 19; Bahamian MLAT, Art. 2.

FN 3. Swiss MLAT, Art. 5; Cayman MLAT, Art. 7; Bahamian 

MLAT, Art. 8.

FN 4. On July 21, 1993, the United States and Colombia 

signed a TIEA that has not yet been placed into effect.

FN 5. Revenue Service Representatives (RSRs) are 

strategically posted at various US embassies throughout the world and 

represent the interests of IRS vis-a-vis the particular countries for which 

the RSRs are respectively responsible.  In certain situations, the RSRs will 

be responsible for sending and receiving requests for information.  In any 

event, no matter which country may be involved, contact should first be made 

with the Exchange of Information Team, and the Exchange Analyst on this Team 

who is responsible for the country where the information is located will 

specify the applicable procedures for making a request for information.

FN 6. The Federal Rules of Criminal Procedure, 

i.e., Fed. R. Crim. P. 15, specifically provide for these procedures, 

but in criminal cases, depositions, foreign or otherwise, can only be taken 

by order of the court, made in the exercise of discretion and on notice to 

all parties (Notes of the Advisory Committee on Rules), in contrast to the 

practice in civil cases where depositions may be taken as a matter of right 

by notice without permission of the court.

FN 7. See, e.g., United Kingdom Evidence 

(Proceedings in Other Jurisdictions) Act 1975, Secs. 1 and 5 (allowing for 

compulsory process to obtain evidence in the United Kingdom for judicial 

requests of foreign courts in civil proceedings which have been instituted 

or are "contemplated" and in criminal cases which have been instituted); 

Evidence Ordinance of Hong Kong, CAP. 8, Part VIII, Secs. 75 and 77B 

(allowing for compulsory process to obtain evidence in Hong Kong for 

judicial requests of foreign courts in civil proceedings which have been 

instituted or are "contemplated" and in criminal cases which have been 

instituted or are likely to be instituted if the evidence is obtained); 

United States

 v. Reagan, 453 F.2d 165, 171-74 (6th Cir. 1971) 

(affirming district court's issuance of a letter rogatory even though 

criminal case was in pre-indictment stage but noting some contrary 

authority).

FN 8. The number of countries which follow British common 

law is quite large, since both the present and former dependencies of the 

United Kingdom

 fall into this category.  For example, the 

Bahamas

, 

Singapore
, the Cayman Islands, and 
Hong Kong
 follow this legal precedent.

FN 9. Her Majesty, Queen in Right, Etc. v. 

Gilbertson, 597 F.2d 1161 (9th Cir. 1979) (hereinafter 

Gilbertson), aff'g, 433 F. Supp. 410 (D. Oregon 1977).

FN 10. Gilbertson, 597 F.2d at 1164.

FN 11. For authorities relying primarily on 

India

 v. 

Taylor

, see, e.g., State of Norway's Application, 

[1987] 1 Q.B. 433, 445-46 (

C.A.

); R. v. Chief Metropolitan Stipendiary 

Magistrate, [1988] 1 W.L.R. at 1207, 1214-15; 

United States

 v. First 

National City Bank, 379 

U.S.

 378, 395-96 & n.16 (1965).

FN 12. See, e.g., First Nat'l City Bank, 379 

U.S.

 

at 396 (Harlan, J., dissenting on other grounds); Gilbertson, 597