WE SHALL OVERCOME

"We Shall Overcome" is a protest song that became a key anthem of the US civil rights movement. The lyrics of the song are derived from a gospel song by Reverend Charles Tindley. The song was published in 1947 as "We Will Overcome" in the People's Songs Bulletin (a publication of People's Songs, an organization of which Pete Seeger was the director and guiding spirit). (source: Wikipedia)

WHAT HAS BEEN OVERCOME?
It has been almost a year since I titled the February 2008 issue “I HAVE A DREAM” after the most famous speech in the world, written and delivered by the Reverend Dr. Martin Luther King, Jr. Numerous comments and statements have been made about the outcome of the 2008 presidential race and the election of the 44th American president, and I hope that my article will not be redundant.

I maintain exactly what I stated a year ago: “While I am sure [Martin Luther King] would find that the U.S. has yet to realize his dream of unity and brotherhood, I also believe the current presidential race has already proven that the country has come a long way in accepting – and even embracing – diversity and difference.” This election has already undoubtedly fulfilled much of his dream, and it could also have a profound influence on the American people for the next four years and beyond.

I would simply add that I believe history is the primary source of wisdom. Again, I recall the very fierce debate during the 1960 campaign in which the hot topic was the fact that the candidate John F. Kennedy was Catholic. The majority opinion held that a Catholic could not be elected president because he was under the authority of the Pope and therefore could not freely govern the country. Of course, after he was elected this argument faded relatively quickly.

It is worth noting that this year’s post election reactions, including those of President Bush, John McCain, and other opponents, clearly showed respect and fair play. In less than 50 years, the United States of America has made much progress toward the vision of its founding fathers. This image nurtures my dream that President-elect Obama can even further advance the mission of reconciling the American people and promoting tolerance of differences.

CUSTODY IN FRANCE
I was recently reminded of the significant differences between the USA and France regarding police investigative procedures, particularly those that can lead to serious misunderstandings when foreigners find themselves under investigation at a police station in France.

As in all democracies, the proper balance must be kept between the authorization of efficient investigative tools – including detention – and the protection of people’s personal rights and liberties. For many reasons the balance between these two opposing interests is quite different in each country. In the USA, police officers are given a short window period in which to obtain custodies and search warrants from the District Attorney. The freedom of the citizen is the most important right.

In France, the police often implement the garde à vue procedure, which allows a police officer to detain anyone for 24 hours at a time, renewable once through simple approval of the Procureur de la République, the equivalent of the District Attorney, for the normal procedure. Even though the individual has the right to call a lawyer an hour after this procedure has begun, the lawyer’s presence does not have much influence on the procedure since he has extremely limited access to the file before the prosecution begins with the ruling of the Procureur de la République. At this early stage the lawyer can only advise his client on how to answer questions, which is already of great help.

What all this means is that the individual can go to the precinct on his own or be taken there by the police and, within minutes, be finger-printed, photographed, held for a series of interrogations, and placed in a cell until the matter is cleared. For the police officer, this is the normal procedure for anyone under investigation, even if it is just to make sure the person was not involved or was merely a bystander of the crime or felony committed. Even for French people who understand this procedure, undergoing the complete criminal identification process – including the emptying of pockets and bags and confiscation of cell phones – can make them feel as if they are being treated like criminals.

Someone I am helping, recently spent about six hours in custody in France and it is now obvious that this was simply to make sure that he was not involved in the criminal deed that was being investigated. Regardless of what the outcome was, this person felt very strongly that the French police had acted as if this person was a proven criminal and he was planning to sue the police officer for gross misconduct. I had the hardest time explaining that the French police were simply eliminating him as a suspect and in effect they were acting in his best interest. I do not underestimate the trauma that comes with this procedure; I understand that it is a normal reaction to feel outraged for having being degraded.

It happens that in both the USA and France a person is innocent until proven guilty in court. The situation I have just explained, among several others, leads many to believe that French law assumes a person to be guilty until proven innocent. It is indeed difficult to make the assumption that someone is innocent when the French administration, represented by the juge d’instruction, has the duty to investigate the innocence or guilt of a suspect. In real life this often means finding evidence that proves the detainee is guilty.

GUARDIANSHIP/CUSTODY ISSUE AFTER THE DEATH OF A PARENT (LE CONSEIL DE FAMILLE)
In this instance, too, foreigners find the French administration extremely intrusive, and French culture only makes the situation worse. One of the key legal concepts at stake here is “the best interest of the child,” which I have already addressed while dealing with topics of divorce and drafting a will. It is true that a French judge could evaluate the situation very differently from the parent, and this is even more likely when the parent is a foreigner.

There are three very different situations that require some explanation.

I - One is when there is a stable couple with children and one parent dies. Then the other parent automatically gets full custody of the children and there is just about no possibility of someone disputing this decision. Now because of French inheritance law linked to this legal concept, the children are the legal owners of a portion of the estate, which sometimes can make them quite wealthy. When the children are young, a family board is created, the members of which come from both sides of the family with special emphasis on including the family of the deceased. The chairperson is the family judge who has the territorial jurisdiction. In many instances the family board (le conseil de famille) never meets and the judge is the only one who protects the best interests of the children.

I saw how badly things can go in this situation while working with one of my clients. A widower with four children by the same spouse, he was referred to me by my notaire after he had been wrongly prosecuted for embezzlement. In reality, his only misdeed was mismanaging his children’s estate. Born a French citizen in Vietnam when it was French territory, he did not trust the administration and highly regarded paternal authority and prerogative in family matters. So he had one bank account opened for each child under his name. Even if one account could not be distinguished from the other, he himself knew exactly which account belonged to whom. While he managed these affairs well, he never documented the reasons for his arrangement. Also, legally he should have submitted a detailed financial report to the family judge for each child, allowing the judge to ensure that the interests of the children were protected. But instead, the judge never got anything but a copy of the bank statements without an explanation of who they belonged to. After he had failed to cooperate for a couple of years, the judge decided that he had stolen all the children’s money for his personal use and sent him to criminal court. We fixed the problem in two stages. First, I wrote a detailed letter explaining his entire set-up and some of the decisions he had made. Suddenly, things looked much better. After that he went to the bank and had each child’s name mentioned on the respective accounts so they could be easily identified. I never heard from him after that, but I know he continued to use my letter as a template, which made the bank statement copies meaningful. This situation well illustrates the fact that such obligations should always be respected and fulfilled, even if doing so means that the parent feels he has to prove his innocence.

II – When the parents are permanently separated, such as after a divorce, the surviving parent gets custody of the children unless he/she lost his/her parental authority in the separation. Family members of the deceased often find this arrangement difficult to accept, but it is virtually impossible for them to fight it successfully. On the other hand, they belong to the conseil de famille, which has considerable power. If they take their mission seriously, they can be quite successful at monitoring what is going on with the children. Yes, this does not deal with securing a healthy relationship between the children and the family members of the deceased; yes, this says nothing about the frequency of phone calls, visitation rights, access to emails, and so on. And yes, the French system in this case is all about money and not about relationships. But as far as I know, these rules are not going to be changed anytime soon, so my advice to these family members is to take full advantage of the options they do have in order to enrich their relationship with the children. Furthermore, the foreign parent can mention the best solution for the children in his/her will. Of course, the judge and conseil de famille can always object and decide something differently, but it is certainly a huge step in the right direction – and the only solution available.

III – When both parents are dead and the minor children need a new guardian, it can create a lot of tension between the two families as well as among family members of the same family. Often the judge chooses a family member who is related to the French parent and who lives in France. The foreign parent often chooses one of his family members who does not live in France.

I regularly get requests to help plan and manage this situation, and frequently after everything seems to be in place, it all falls apart because the couple has spoken to a French lawyer or notaire, or even just the French family members, who have all told them that doing this is a complete waste of time, energy, and money. They say that there is no guaranty that it will be implemented and it is unlikely a French judge would allow French children to leave France to live in another country. I then explain again that while all this may be true, it is the only available solution and more than worth the trouble, whatever the chances for success. If the documentation is well prepared, there is enough evidence to make it difficult to overrule the chosen solution. Sometimes the French vision prevails and nothing is done after all; sometimes the Anglo-Saxon visions prevails and the will and supporting documents are gathered and given to a trusted notaire.

This is for me an excellent illustration of the vast cultural differences that exist between the two worlds. In France the first answer can only be a NO and then the discussion starts to see if and when there can be another answer such as a yes. In the USA and many other Anglo Saxon countries, the first answer is YES and then comes the explanation of the limitations and the guidelines to comply in order to get the YES. Theoretically you get to the same result at the end but the process is radically different and therefore the chances of success quite different too.

OFFICE STAYS OPEN DURING THE CHRISTMAS SEASON
I will celebrate Christmas in Paris. Therefore, the office will stay open except for the 24th, 25th, 26th, 30th, and 31st.

Please allow me to wish all of you a

MERRY CHRISTMAS AND A HAPPY NEW YEAR.

I would like to remind everyone that there is no January issue.

Best regards,

Q & A

RUNNING A MERCHANT EBUSINESS IN FRANCE

QUESTION
I have dual nationality, American and Canadian, and I am wondering if as a French resident I need to create a French business. My company is located in the Netherlands and I will be selling their products only over the Ebay website and getting paid through PayPal. Is it true that if I declare the income generated by this business in France and just pay taxes I will be clean? Or should I create an American or Canadian company to run this business?

ANSWER
Your question raises an interesting topic which is often completely overlooked. That said, the way you present it is quite misleading. The issue needs to be presented differently before it is addressed.

The first important fact to state here is that you are a French legal and fiscal resident and you wish to run a business in France. Until recently, the retail industry operated very simply: a shop was needed to sell a product. Nobody would have challenged the statement that running a shop is in effect running a business.

Now the Internet has revolutionized the concept of retail and indeed Ebay is an excellent example. It is now possible to sell items simply by posting pictures and descriptions of them. Furthermore, the goods can be stored anywhere, even in a different country. So the impression that one is engaged in a retail business is highly diluted. But if you put things for sale on Ebay in such a way that you make a living doing so, then you are a merchant in the most traditional meaning of the word: you buy at one price and sell at a higher one to cover your expenses and make money with the margin.

So, if you allow me the comparison, Ebay is effectively the window and shelves of your “virtual” shop. PayPal is your cash register, and you use this account to receive and make payments. The company in the Netherlands has a warehouse, which is the basement of the shop where the inventory is stored.

Considering the above, you are running a business in France that should be registered in France and taxed accordingly. Therefore, creating an American or Canadian corporation does not address the issue in the least. But because French taxes are expensive, many people in your situation are tempted to create another arrangement to avoid paying them. In theory it is possible to incorporate your business in the USA or Canada since the Web does not know any frontier as such. The company could be registered under the address of a lawyer or C.P.A. office or even your parents. Then you would be mentioned as the owner-officer of the company, and if you gave a local address then chances are you would be considered as a fiscal resident of that country, which would not be true since you are actually a French resident. If you give your French address, it is likely that the money the company pays you will bear not only French income tax but also French social charges, since your status is that of a French resident who has a foreign employer. This is what you wanted to avoid in the first place. So there is no legal way for you to run this business while living in France without paying social charges. Also keep in mind that even if you are exceedingly careful and keep your chances of getting caught extremely low, this does not make the set-up any more legal; it just makes it safer.

THE PAYMENT OF THE CONDOMINIUM CHARGES BY THE RENTER

QUESTION
Recently when we received our annual rent and condominium-charges increase, we learned that the heating expense for 2007 had increased by 156%. Many of the tenants joined together to write a letter to the management company demanding a copy of the bill. Until the matter is resolved, we are paying our rent and the old charges, but not the new ones. When we received a copy of the bill, it showed that our gas consumption was through the roof! For the entire building it went from around 7,800 euros to 20,000 euros. All of the apartments, as far as I know, use electricity for everything else, including heating water. So even though there should not be any gas consumption in the summer, the bill showed that we consumed the same amount of gas in the summer as we did in the winter months. Something is clearly wrong here.
As you can imagine, GDF will not speak to us because the tenants are not on the bill. The management company will not do anything. I just received a letter from the management company stating that I owe 787 euros and need to pay it right away to éviter tout contentieux. It is as if they just ignored the letter we sent signed by all the tenants. I do not want this to continue any longer, nor do I want them to go after my guarantor. I really feel there is a serious error.

ANSWER
You address a very pertinent issue here. Too many people focus on the risk of a sharp increase in rent, which in France is quite difficult to do, and overlook a similar increase in the condominium charges, which is easily done, as the law puts no limit on it! To fight it on your own, you would be starting an uphill battle with little chance of winning. Let me explain how this is possible.

Concerning rent increase, a couple of years ago the French government specifically established a new ratio that makes it difficult to effect a sharp increase. Before that, the ratio depended on the cost of building construction, which could be much more variable.

While payment of condominium charges is supposed to be a simple process, in reality it is not. In principle, the tenant pays an estimated amount for one year and later the management company closes the books, adjusts the amount owed by the tenant, and either refunds the tenant or calls him for more money.

The reality is that the management company takes a long time to close the year’s books, and the landlord is sometimes tempted to ignore the obligation to refund money if the tenant paid too much, but will ask for money if the estimated amount paid was insufficient. Also, and this is the crux of your situation, the copy of the bill is almost certainly not a fake document; it would be much too dangerous for the management company to produce one. At the same time, I share your desire to know more about what happened. You are owed an explanation, which can be that either the cost of the previous years was far too low or the increase is probably fraudulent. Keep in mind that in this situation the property manager has an obligation to the tenants to close the books once a year, presenting the total bills for the condominium charges on one side and the monthly payments on the other. My guess would be that this has not been done for previous years. So you have some legitimate requests.

I presume that the firm that is le syndic (the building manager) is also le gestionnaire (the property manager) and the two divisions of the same company are not talking to each other. Therefore the GDF bill was passed from one division to the other so that the money could be collected from the tenants. Meanwhile, the right hand, or the property manager, refuses to hear your claims against the left hand, the building manager, and therefore will not pass this information on, let alone pass on a copy of the letters sent by the tenants.

This is a bad situation to begin with since the firm will do everything possible to protect its interests, which means that each division will cover for the other in a combined effort to prevent information from leaking outside. If you communicate this explanation to the other tenants once it is confirmed to be true – and this is quite easy to find out since the building manager often puts such notices in the hallway or other common areas – then you should get together to find a united solution. You will have a much better chance of success with a large number of people, since their action carries a lot more weight. Also, do not underestimate the possibility that the landlord who arranged to have the apartment managed by this firm could be interested in this information and explanation. This could be the tipping point of your struggle since GDF could indeed pass on the information to a co-owner and even more certainly to a member of the Board, especially the President.

As for the statement éviter tout contentieux, it is a formulaic phrase which at this point poses nothing more than an empty threat. I know you are in a tricky situation and that you do not want the guarantor to be forced to pay on your behalf. But keep in mind that the management company can access this money in no time and your action will then be defeated. If you are alone in this fight you will never be heard because no financial risk is created. If you are going to get some leverage, the company needs to feel a financial pinch.