Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



U.S. Couple Launches NAFTA Claim over Income Trusts Decision

A year after the Canadian Minister of Finance announced that Ottawa would tax money paid to shareholders by income and energy trusts, a Chicago couple has launched a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA).  Marvin and Elaine Gottlieb have filed a Notice of Intent to Submit a claim under NAFTA alleging that the elimination of the tax-free status of energy and income trusts cost them $6.5 million in damages.  While the tax measures will not take effect until 2011, there was a significant sell off of the investment vehicles in the weeks following the announcement of the measure.  The Gottliebs are alleging that the move is discriminatory because the measures were aimed at trusts which have a high degree of U.S. ownership.  It remains to be seen whether such an allegation meets the narrow scope of NAFTA Chapter 11.

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