Diplomatic Privilege: When is a “congestion charge” a tax?

by Peggy McGuinness

Public international law concerns itself with topics ranging from the weighty issues of war and peace to the seemingly silly questions of whether foreign diplomats and consular officers should be exempt from paying parking tickets and bridge and tunnel tolls.   But silly questions have a way of creating waves that can lead in unpredictable directions.   The current US Ambassador to the Court of St. James, Robert Tuttle, caused a stir last year when he announced that US diplomats should be exempt from the "congestion charge" that drivers must pay to enter central London during certain hours.  The area covered by the congestion charge includes Grosvenor Square, where the US embassy is located.  By all accounts, the fee has succeeded in lowering traffic in the targeted areas, and cities in the US have considered adopting similar programs.   But it is not cheap — around $14.00 or so daily per car — and the US embassy has racked up over $500,000 in back fees so far (over 34,000 individual infractions), ranking number one among the congestion fee scofflaws. 

London Mayor Ron Livingstone ("Red Ken") went so far as to say, "It would actually be quite nice if the American ambassador in Britain could pay the charge that everybody else is paying and not actually try and skive out of it like some chiselling little crook."   ("Skive" is one of those great Briticisms, like "gobsmacked," that has no similarly punchy equivalent in the American vernacular.)  A NY Times editorial has agreed:  The US should pay up.

But there is a good argument that diplomats should get a pass here.  The centuries old customary international law of diplomatic immunity is premised on the idea that the envoy of the sending state should have broad immunity from the laws of the receiving state (taxes, criminal prosecutions, civil liability) because she is the representative of the foreign sovereign, and gains her immunity derivatively from the sovereign.  Being able to speak and act free from the threat of arbitrary arrest, detention, or financial coercion, is central to the task of being a diplomat, and therefore central to international relations.  It is also fundamentally reciprocal:  you don’t arrest our diplomats, we won’t arrest yours.  All this is codified in 1961 Convention on Diplomatic Relations, which, among other things, exempts diplomats from "all dues and taxes, personal or real, national, regional or municipal …"  Moreover, the inviolability of diplomatic premises — a central pillar of the law of diplomatic protection and immunity — is, arguably, at issue in the London spat.  A receiving state could raise driving "fees" to such a level as to make it impracticable for diplomats to come and go from the embassy.

London Transport claims that the congestion charge "is not a tax," adding " it’s a charge for a service and gives no privileges to any VIPs, so we do not see why diplomats should be exempt." They do concede that embassies would be immune from having the vehicles seized in a bailiff action or from being "clamped" (i.e., the "Denver boot.")  At least one embassy that had previously objected (the UAE) recently started complying. 

Now, foreign diplomats and consular officers in New York (assigned to the UN or to consulates) have created resentment and even prompted a few harsh words from NYC mayors over the years for unpaid parking tickets.  The millions of dollars in back tickets were resolved, in part, by a 2002 agreement between NYC and the State Department and by legislation that permits the US to withhold aid to certain countries in proportion to the amount owed to NYC in back-summonses.   And, most important for this debate, the diplomats have alsways paid the bridge and tunnel tolls in the NY area and elsewhere in the US without a grumble. 

So, is it a "tax" or a user fee?  Should the US pay up or continue to "skive?"

http://opiniojuris.org/2006/05/09/diplomatic-privilege-when-is-a-congestion-charge-a-tax/

4 Responses

  1. Interesting question PM. If one accepts the definition of “tax” as a charge imposed on an activity for the general and direct support of government (as distinguished from a charge for a specific good or service furnished by the state — e.g., electricity or a subway ride) this would seem to qualify, no?

  2. Interesting question, indeed. The charge probably does not ‘represent payment for specific services rendered’ (as in the let-out clause of article 23 (1) of the 1961 Convention), simply because the service in question is not very specific. After all, the charge is not for specific roadworks in the City of Westminster, but for the use of the streets generally. This probably doesn’t equate to charges like the tolls for bridges and tunnels mentioned in the post.

    But what is the meaning of the phrase ‘dues and taxes in respect of the premises of the mission‘ (also article 23 (1))? This is unlikely to extend to the cars used by the mission, as article 20 carefully differentiates between the premises and ‘means of transport’.

    Incidentally, the Mayor’s name is Ken, not Ron. Hence the nickname ‘Red Ken’…

  3. Another incidental comment: I hear that Bratislava has a similar scheme, there labelled as a municipal tax. There is therefore much more agreement there that diplomats are exempt.

    I am also told that the Austrians are examining the legal situation in Bratislava and in London, and that they are currently paying the English congestion charge, until a decision has been reached. This may be a good political solution for the moment.

  4. John, Tobias —

    Thanks for the comments (and the correction on “Ken” v. “Ron”– strange typo there). I agree that the congestion charge does not exactly seem like a user fee for services within the meaning of article 23, though oftentimes bridge and road tolls are thrown into general revenue accounts and could also be cosntrued as taxes rather than user fees. Perhaps it depends on where the revenue is directed. I also agree that the congestion fee is not what is meant as “dues and taxes in respect of the premises,” as premises generally refer to the real property. That still leaves open an inviolability argument.

    The Bratislava situation is an interesting counter-example.

    Tobias, I look forward to keeping up with your blog.

    Peggy

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