The Fifth Circuit Court of Appeals reversed the district court's denial of the government's motion to compel production of foreign bank account records required to be kept under Treasury Department regulations by the target of a grand jury investigation (the "witness"). The witness stated he would not comply with the subpoena, citing his Fifth Amendment privilege against self-incrimination. The Fifth Circuit stated that the Fifth Amendment did not protect the witness in this case, instead finding that the government's request fell within the "Required Records Doctrine," under which the government may require that certain records be kept and produced without the protection of the privilege against self-incrimination.
The witness was a target of a grand jury investigation to determine whether he used Swiss bank accounts held with UBS to evade his federal income taxes. His name and records were among the documents provided to the US government by UBS as a part of its deferred-prosecution agreement with the Justice Department.
The Required Records Doctrine applies where "first, the purposes of the United States' inquiry must be essentially regulatory; second, information is to be obtained by requiring the preservation of records of a kind which the regulated party has customarily kept; and third the records themselves must have assumed 'public aspects' which render them at least analogous to public documents."
The Fifth Circuit noted that where the record-keeping requirements apply almost exclusively for people engaged in illegal activity, the doctrine would not apply – for example, the government cannot require those engaged in illegal gambling or selling illegal substances to keep records of these acts. Here, however, the Fifth Circuit reasoned that there is nothing inherently illegal about having a foreign bank account and the purposes of the record-keeping regulation serve purposes other than criminal law enforcement. As such, the record-keeping requirement was "essentially regulatory" within the meaning of the doctrine.
Next, there was no argument that bank records are of the type customarily kept by the witness in this case. Finally, the court noted that although bank records are typically private, they are analogous to subpoenaed medical records, which have been found to posses sufficient "public aspects" to satisfy the Required Records Doctrine.
In summary, the record-keeping and production requirements of the U.S. Treasury Department with respect to foreign bank accounts have been held by the Fifth Circuit, along with the Ninth Circuit (In re M.H., 648 F.3d 1067 (9th Cir. 2011)) and the Seventh Circuit (In re Special Feb. 2011-1 Grand Jury Subpoena Dated Sept. 12, 2011, No. 11-3799, 2012 WL 3644842 (7th Cir. Aug. 27, 2012)), to fall outside the protection of the Fifth Amendment privilege against self-incrimination.