World Association of Truck Drivers and Transporters: This association based in Geneva has 400 million dollars and is tax free!

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They are three inconspicuous letters on trucks that traverse the world. TIR. The blue signs on the front and back read “Transport international routier”. If a truck has a TIR carnet, a truck driver can cross the border without paying customs duties or being checked. Until recently a very lucrative business, which is now coming under pressure from the free movement of goods in Europe.

Behind this guarantee system is a discreet, opaque international organization worth millions, plagued by internal power struggles, whose leading members have been targeted by Geneva’s judiciary since 2017: the International Road Transport Union (IRU).

Huge reserves

The IRU is said to have built up assets of up to CHF 1.9 billion in 2015 – it itself disputes the figures. But in recent years there have been losses of half a billion francs – due to bad investments in a real estate project in Turkey, various media have revealed. According to the 2022 annual report, there are still about 400 million francs in the treasury. Research by Blick now shows that the state sees nothing of this money. The institution has been exempt from tax by the Geneva Treasury since 2009 because it is considered a non-profit organization.

There are clear criteria for the tax exemption. This means, among other things, that a tax-exempt company cannot hoard money, cannot engage in paid work and must use its funds for its charitable purposes. Is this the case with the IRU?

To answer this question we have to take a look at the “IRU Foundation for Road Traffic”. It was founded in 1988 by the IRU itself. The foundation that pays taxes is actually the “working arm” of the IRU, wrote the “Tages-Anzeiger” in 2020. But that’s not all: the foundation was created “for tax reasons” because “the IRU does not do business “. The capital of the IRU Foundation comes from the sale of Carnet TIR.

IRU: Foundation was established «independently»

The IRU sees it differently, although they confirmed to Blick that the foundation and its affiliates are engaged in commercial and non-commercial activities.

According to spokesperson John Kidd, the foundation – “independent”, he emphasizes – “is to achieve the same goals as the IRU”. The media spokesperson stressed that the Carnet-TIR was “non-commercial” and that the IRU was a non-profit organization.

“We need to have enough reserves for the TIR system and to cover any liability claims,” says Kidd. “Any surpluses generated by operational activities or financial investments are reinvested so that the IRU can continue to fulfill its mission.”

In short: walk on, there is nothing to see.

Exploitation of tax secrecy

But politicians are concerned. “It is shocking to hear that a structure with such assets is exempt from taxes,” said Geneva SP councilor Sylvain Thévoz (48). “This raises questions about the rigor of the checks carried out.” Thévoz suspects that tax secrecy is widely used in Geneva at the expense of the public interest.

“Today it is impossible to know what amounts are withheld from the Treasury and how extensive the checks on tax exemptions are. It is a black box and democratically very problematic.”

Federal intervention

The recent history of the IRU has also been turbulent. In 2020, there was a power struggle on the executive floor, as the “Tages-Anzeiger” wrote. It was about the independence of the IRU from the foundation. According to the trade register, the Federal Supervisory Authority Foundation (ESA) has now appointed two commissioners.

What exactly they do is unclear. A spokeswoman says that the ESA will act if it has indications that the functioning or assets of a foundation are in danger, criminal offenses have been committed or that there are shortcomings in the organization.

In a report that Blick saw, Ernst & Young’s accounting firm recommended that the foundation be separated from the association. The reason is the “risk of confusion”. From a tax point of view, this risk was described as “significant”. This is just one of many risks, the list stretches for about seven pages.

In 2017, the public prosecutor’s office in Geneva also initiated proceedings for improper management, fraud and abuse of powers of representation. The trial has not yet been completed, the prosecutor said when asked by Blick.

Source:Blick