Economic crime unit Økokrim announced on Wednesday it would appeal parts of the Transocean judgment, Norway’s largest ever tax fraud case. The Oslo city court acquitted all parties to the nine-year investigation earlier this month, but the unit said it would appeal three of the five matters involved.
When the case was dismissed, Økokrim was also ordered to pay court costs amounting to NOK 41 million (USD 6.6 million). Chief prosecutor Morten Eriksen had two weeks to appeal the court’s verdict, reported newspaper Dagens Næringsliv (DN).
Økokrim decided to challenge three issues. While the Transocean case was decided under criminal law, the unit argued earlier judgments under civil litigation had reached the opposite conclusion to the Transocean verdict.
“If the judgment is upheld, there is much to suggest that the tax laws, tax treaties with other countries and disclosure obligations under the tax laws in practice have little content on very important areas,” said Eriksen. “It is difficult to understand that can be the case, and the consequences will be very dramatic.”
“When taxpayers make artificial constructions of reasons for taxation, it becomes difficult for the court to decide if it falls within the law or not,” he said. “This will depend on whether you assume artificial formalities or realities. The Supreme Court should ultimately have to decide.”
Through the Ministry of Finance, the Norwegian government made compensation claims against the Transocean case defendants worth almost NOK 1.9 billion. The ministry declined to comment on whether it had been involved in the decision to appeal.
The Skattetaten tax administration’s legal director Jan Magnus said the agency had the right to comment on whether the verdict should be appealed, but had not done so. “We have had a dialogue with Økokrim where we have informed about our tax law considerations in the court’s judgment,” he said. “But when it comes to the compensation claim in the case, Skattetaten will undertake an independent consideration of the appeal question. This is in line with the cooperation agreement Skattetaten has with Økokrim.”
The two proceedings that were dropped concerned a group contribution from 2001, and whether Transocean company Arcade should have paid tax to Norway in 2001 and 2002. Thommessen tax lawyer Sverre E Koch was also removed from the appeal cases, acquitting him fully from further appeal.
Law professor Thore Bråthen from the BI Norwegian Business School estimated a Supreme Court appeal could drag the case out until 2018. The chair of the Norwegian Bar Association’s tax law committee, Bettina Banoun, previously warned Økokrim against appealing the case. She said the economic crime, tax and government legal authorities had already “destroyed the lives of three tax advisers for nine years,” and nothing would be achieved through a new legal marathon.