The Zurich Cantonal Supreme Court increased the fines imposed on art collector and financier Urs E. Schwarzenbach in two cases. Both cases concerned VAT evasion in connection with the importation of works of art.
According to two recently issued judgments of the Zurich Supreme Court, the fines for Schwarzenbach were increased from CHF 2.5 million to CHF 3.1 million and from CHF 6 million to over CHF 7 million. In both cases, Schwarzenbach is accused of multiple VAT evasion.
Hundreds of millions of additional tax claims
The 74-year-old Swiss financier, art collector and hotel owner has been involved in various legal disputes for years. Describing his financial situation to the court as “very bad overall”, Schwarzenbach faced a three-figure one million additional tax claim from the canton of Zurich in another case.
Two cases recently decided by the Zurich Supreme Court involve significantly lower amounts.
Artwork abducted by private jet
In one of the trials, the Federal Office of Customs and Border Security (BAZG) accuses Schwarzenbach of importing dozens of artworks into Switzerland between 2008 and 2013 without paying VAT. The Zurich Supreme Court fined him CHF 3.1 million for multiple tax evasion.
Schwarzenbach is said to have brought the artworks to Switzerland on his private jet. An employee then pushed them through the green gate at customs into a luggage cart.
Indicted in federal court
The present decision is the second decision of the Supreme Court of Zurich on the matter. He had to reconsider by order of the Federal Supreme Court. In May 2018, the Bülach District Court fined Schwarzenbach a fine of 4 million francs, and the Zurich Supreme Court reduced this amount to approximately 2.5 million francs in June 2020.
On the other hand, both Schwarzenbach and BAZG defended themselves with complaints to the Federal Supreme Court. Schwarzenbach demanded acquittal, BAZG fined 4 million Swiss francs.
As the Federal Supreme Court dismissed Schwarzenbach’s appeal, the Supreme Court was only required to re-determine the amount of the fine in accordance with the Federal Supreme Court’s specifications on this matter.
But the case is still not closed: it goes back to federal court. Both the Federal Customs Administration (FCA) and Schwarzenbach again appealed against the Supreme Court’s decision.
a repeat offender
The second case recently decided by the Supreme Court concerned VAT evasion while importing works of art. However, the procedure was somewhat more complicated than the first procedure.
BAZG accuses Schwarzenbach of abusing the so-called transfer procedure to avoid VAT. The transfer procedure makes it possible to pay VAT later.
Schwarzenbach is said to have imported 83 duty-free works of art into Switzerland from 2008 to 2013 and evaded 11 million francs in taxes. The Zurich district court fined him 6 million francs in February 2021.
Timeout requests
Schwarzenbach argued in both the district court and the supreme court that the claims were time-barred. The Supreme Court saw it differently. The district court fined Schwarzenbach 6 million francs, while the high court has now increased it to 7.07 million francs.
Penalties for the two defendants are now higher. The fine for a former manager of a gallery is now CHF 1.37 million instead of CHF 1 million.
Even the fine imposed on another defendant, the lawyer, was quadrupled. The high court saw him not only as an aide but as an accomplice and fined him as a lower court of 1.99 million francs instead of 500,000 francs.
The Supreme Court decision is not yet final, but it can still be appealed to the Federal Supreme Court. (SDA/shq)