I have been hearing here (and elsewhere) that the American IRS has said that it might be inclined to treat dual US/Canadian citizens a bit more leniently. I imagine this is in response to the concerns that have been publicly raised by the Canadian government in response to the FATCA and the FBAR requirement.
I do not begrudge one whit this good news (if it is indeed true) but it does raise questions for us overseas Americans who are not residents of Canada and who are (or wish to be) dual-citizens (or who have family members who already are dual citizens) of another nation-state.
As I was researching citizenship issues for the Flophouse blog I came across a very intriguing idea: the principle of “master nationality.” (I’ve also seen this called “effective” or “dominant” nationality). Now I am not a lawyer and my interpretation of this might be incorrect but here is what I understand: A dual citizen living in one of his states of citizenship does not have the right to ask the other state (of which he is not a resident) for aid and protection against the state in which he resides. So a dual French/US citizen living in France, who one day has an issue with the French government, cannot go to the US Embassy in Paris and plead for American protection and help. The French government will not acknowledge that the other government has sovereignty over that citizen as long as he or she is on French soil. This person is French. Period. This principle is stated very clearly in the Charter of the Rights and Responsibilities of a French citizen which says:
En acquérant la nationalité française, vous bénéficierez de tous les droits et serez tenu à toutes les obligations attachées à la qualité de citoyen français à dater du jour de cette acquisition. En devenant Français, vous ne pourrez plus vous réclamer d’une autre nationalité sur le territoire français.
I think that is entirely fair. A dual should not be able to have the “beurre et l’argent du beurre.” However this does raise an interesting question: if I become a French citizen and can no longer claim the rights, benefits and protection of American citizenship on French soil (the “butter and the money from the butter”) how should the French government react to an attempt by the “other” government to impose its sovereignty on me in France? Or for that matter on my children who are dual nationals by birth?
Now the United States seems to have a slightly different take on it. The U.S. State Department says here that “However, dual nationals owe allegiance to both the United States and the foreign country. They are required to obey the laws of both countries. Either country has the right to enforce its laws, particularly if the person later travels there..” Now that just seems downright unworkable. In a situation where French (or EU) law conflicts with American law, the French are saying that I would be required to obey French and EU law as a French citizen residing in France but the American government seems to be insisting that I must obey American law when I am in France. Or, for another example closer to the U.S., does this mean the United States of America recognizes the sovereignty of the Mexican state over, and the application of Mexican law to, dual US/Mexican citizens residing in the United States? Would they recognize the sovereignty of the French state over me if I were a dual, travelled to the US and then requested the aid of the French embassy while I am on American soil? How would the French embassy respond to such a situation? (I imagine that they would quite sensibly apply the principle of “master nationality” in such a case.)
I find that I am unable to answer these questions (as I said, I am not a lawyer) however may I suggest that, from a purely practical standpoint (and as events in Canada in response to FATCA prove), there are real benefits to becoming a dual US/Other citizen since the U.S. government does seem to recognize that the other state does have sovereignty over that citizen and some say in how he or she is treated whether that person is living in the U.S. or not. The behaviour of the US IRS concerning Canadians and the FBAR regulations seems to confirm this since their leniency seems directly related to the Canadian government’s efforts on their behalf.
So for those of us who have been living outside the U.S. for many years, have come to love our host countries, but who have always been a bit fearful of the U.S. government reaction to our becoming citizens of our host countries (I was told in the strongest terms at the US Embassy in Paris years back that this was a *terrible* idea and I risked losing my American citizenship if I became a French citizen) that we effectively have nothing to lose and everything to gain by pledging allegiance to another state.
There are undoubtedly weaknesses and even outright errors in my analysis so please feel free to challenge me or give your take on it. It would be good to get some clarity on this.
As a dual US-UK citizen, I’d like to think that the UK would stick up for me if the IRS tried to heavily fine me and seize my assets in England.
The IRS can’t seize your asset in UK, only in the USA. Under a tax treaty, the IRS can request the other nation to collect, but Revenue Canada will not collect on a Canadian citizen.
Interesting concept. On your last paragraph, I agree completely. I think the US attitude on this is “If you are an American citizen, we have ultimate control over you no matter where you live.” I can’t find anything to prove me wrong.
Unfortunately, if you were born there, the only way to be completely free is to renounce. It sounds so crazy to me to even be saying these words, but that’s just the way that it is.
Victoria: thanks for this excellent post, and for informing us of the idea of “dominant nationality” which I hadn’t heard before. I will be posting on this subject today too.
“In America
When leaving or returning to the United States always present yourself as a US citizen (show your US passport and declare yourself to be a US citizen). When inside the United States and dealing with the local police or any other local, state or federal official, if a question comes up about your citizenship, tell them you’re an American. It’s that simple. Don’t mention your dual citizenship or that you are a citizen of another country unless specifically asked. Ninety-nine percent of the time the police and government officials don’t care because in the eyes of US law you are an American first and foremost and subject to our laws.
In Your Native Country
When returning to or leaving from your native country, always present yourself as a citizen of their country (show them your native country passport, not your US passport, and declare yourself to be a citizen of your native country). * When inside that country, be a citizen of that country. When dealing with the local police or any other local or federal official, if a question comes up about your citizenship, tell them you are citizen of that country. * If they ask where you live, tell them in America. Don’t mention your dual citizenship or that you are an American unless specifically asked. * In the eyes of that government you are citizen of that country first and subject to its laws and regulations* *even though you live in America.
If you go to a US embassy or consulate in your native country for help or assistance, represent yourself as an American. The embassy staff will probably ask about your dual citizenship. Why? Because as far as international law goes, your native country has legal claim on you first when you’re in that country. This may limit the kind of help the US embassy or consulate can give you, especially if you are in trouble with your native country’s laws and government. ”
http://www.newcitizen.us/dual.html
The UK has the notion of tax domicile and would probably considered
The article by Kannof (p. 117) says that the doctrine of State nonresponsibility,
The point of the quote from Kannof is that I am not sure newcitizen is correct. If the concept of dominant nationality says that the dominant country can assert its rights over the person. The 1955 Merge case would have gone the other way, if the woman claiming damages had lived in the United States with her husband instead of Italy. If her dominant nationality had been US, then she would have won the case.
That is an excellent link and quote, foxyladyhawk. Thank you.
I do know that there was one point in US history when the US did try to regulate duals through what were called the Bancroft Treaties between 1868 and 1937. France also negotiated with the Algerian government on this topic starting with the Evian Accords signed in 1962. This sort of thing has pretty much gone out of favor in modern times for reason that I give here:
http://thefranco-americanflophouse.blogspot.com/2011/06/pledging-allegiance-plural-nationality_02.html
Thanks, Petros. When I first read about it, I said to myself, “What an elegant idea.” When I saw that the French Charter was asking for that from me in the event I become a French citizen, I thought it was entirely reasonable. In France, I would be French. 100% d’accord!
I hope the French government would too on behalf of my French-American children (the “Frenchlings”). They have spent nearly all of their lives in France, were educated in the French public school systems, are native French-speakers and their father, aunt, uncle, grandmother and grandfather, cousins and so on are French. In addition, France has shown herself to be very protective of her citizens (sometimes in a manner that infuriates other nation-states :-). I could not imagine a world where the French government would simply throw them under the bus of American government policy just because they have an American mother.
What the U.S. State Department is saying is that, for example, because one is a dual-U.S.-Canadian citizen resident in Canada one cannot travel to Cuba without violating U.S. and being subject to the same penalties as any other U.S. citizen would be simply because the country of residence is Canada (where Canadian citizens are allowed to visit Cuba). While a dual-citizen, we are each subject to the laws of Canada and of the U.S. wherever in the world we go.
That is how the USA makes dual citizenship an undesirable quality. I cannot serve two political masters. I cannot serve two police states.