## Facts

- The IRS issued an administrative summons to First National Bank of Chicago seeking records for U.S. taxpayers’ account maintained at the bank’s Piraeus, Greece branch.
- The summons sought information to assist in collection of an already-assessed federal tax liability.
- The bank disclosed limited information (that there was a single Greek account and an approximate balance) but refused to produce full records.
- The bank asserted that producing the documents would violate Greek banking secrecy law and expose its Greek branch personnel to criminal prosecution, including imprisonment.
- The evidentiary record included Greek statutory materials, expert testimony, and statements from Greek officials addressing the secrecy law and enforcement risk.
- The United States had potential alternative means to obtain the information through intergovernmental channels, including treaty-based mechanisms with Greece.

## Issues

1. Whether a district court abuses its discretion by enforcing an IRS summons when compliance would likely subject a respondent’s foreign employees to substantial criminal penalties under foreign law.
2. How to balance U.S. tax enforcement interests against a foreign sovereign’s interests and penal laws when compelled production would require violation of foreign secrecy statutes.

## Decision

- The Seventh Circuit reversed the district court’s order enforcing the summons.
- The court found the bank sufficiently demonstrated a concrete, non-speculative risk that compliance would expose its Greek employees to significant criminal penalties under Greek law.
- Applying an international comity interest-balancing approach, the court concluded the competing considerations weighed against compelling disclosure under the circumstances and declined to enforce the summons at that time.

## Legal Principles

- When a U.S. compulsory process order would require violation of foreign law, a court should apply an international comity balancing analysis rather than enforce automatically.
- Relevant factors include: the importance of the information to the U.S. enforcement objective, the specificity of the request, the location/origin of the information, the availability of alternative means, and the likelihood and severity of foreign sanctions and the foreign state’s interests.
- A party resisting production on foreign-law grounds must show a realistic and substantial risk of foreign penal consequences; a speculative risk is insufficient.
- The availability of treaty-based or diplomatic mechanisms to obtain the same information can weigh against compelling a domestic respondent to expose foreign personnel to criminal liability.
- Nonenforcement in a given case does not eliminate U.S. authority categorically; it reflects a case-specific balance of interests.

## Conclusion

The Seventh Circuit declined to compel a bank to produce Greek-branch records sought by an IRS summons where compliance would likely violate Greek secrecy law and expose employees to criminal prosecution, holding that comity-based balancing and available alternative channels favored nonenforcement on the record presented.


United States v. First Nat’l Bank of Chi., 699 F.2d 341 (7th Cir. 1983)