• What Takes Weeks in Singapore Takes Years in Israel / Adv. (CPA) Daniel Paserman (June 2008)
  • June 30, 2009
  • Law Firm: Gornitzky & Co. - Tel Aviv Office
  • Two recent judgments of the Supreme Court dealing with the subject of reliance on legal opinions as criminal defence have raised a great deal of interest amongst the business community.

    In both these judgments, known as the "Tnuva" and the "Tagar" cases, the issue was deliberated in the context of restrictive arrangement offence under the Israeli Antitrust Law, and it was held that reliance on an erroneous legal opinion might, under certain circumstances, not constitute a defence against criminal liability. In criminal law, ignorance of the law (ignorantia iuris), including in cases of mistake vis-à-vis the existence or understanding of a criminal prohibition, does not constitute a defense against criminal liability unless "the mistake was reasonably unavoidable". The accused in the above two cases argued that they relied, in good faith, on the legal opinion of their lawyers, which later on transpired to be mistaken and therefore their mistake was reasonably unavoidable and they must be exempted from criminal liability for the offence committed as a result of that mistake. In the Tnuva case, the Chief Justice, Dorit Beinish, ruled that where there is an actual option of turning to a competent authority to receive a pre-ruling, then turning to a private lawyer may not be sufficient in order to prove the defence of mistake regarding the legal situation. This finding is also relevant in the matter of tax laws and securities laws offences, which also have mechanisms for receiving prior approval from the authority in charge.
    Many arguments can be raised against the Supreme Court in the Tnuva case. Beyond the criticism on the substantive level, one of the serious questions in this regard is whether imposing of the duty to make a pre-ruling application is practical. Professionals in the field can testify that receiving a pre-ruling from a competent authority may take many months, may involve lengthy negotiations and the final result may be far from the original request sought. This difficulty is due to the lack of manpower in the various authorities, expressed in the workload of the officials of the authority, buckling under the workload.
    In Singapore, a growing country with 4 million citizens, the application process for a pre-ruling is effective and quick, conducted in accordance with business standards. In a matter handled by our office, the tax inspector responded to a pre-ruling application within 3 days and sent a letter with details of the data and facts to be completed by the assessee within 7 business days. In effect, in less than 6 weeks from the date of submitting the original application, the assessee received a signed ruling.
    Singaporeans have learned that in the modern world in order to stimulate business activity, the government must provide a professional, efficient and speedy response to the business community. This concept is seen in all forms of Singaporean government. Government officials travel throughout the world, meet with businessmen and offer them encouragement packages and incentives in order to persuade them to invest in Singapore. We can only hope that the "Ariav Committee" for opening the capital market to competition and for the promoting of Israel in the international market will learn from the Singaporean experience.
    Adv. (CPA) Daniel Paserman is a partner in the Law Offices of Gornitzky and Co.