The headline says it all and I thought it was so charming that I had to share it with you. This article was published earlier this month in the Luxembourg publication Paperjam.lu and it begins with this comment:
En 2009, on célébrait l’investiture de Barack Obama. Aujourd’hui, la Place espère ne pas subir la loi des États-Unis. (In 2009 we celebrated the investiture of Barack Obama. Today la Place is hoping it will not have to submit to American law.)
Late November a coalition of Luxembourg banking associations, the Luxembourg branch of the American Chamber of Commerce and the association of American banks in Luxembourg sent a letter to the newly appointed American Ambassador to Luxembourg asking that the law either be repealed or that negotiations start to talk about the impact of the law on European banks.
One of the signatories to this letter is Jean-Jacques Rommes, CEO of l’Association des Banques et Banquiers, Luxembourg (ABBL) who is continuing to speak out. You can find his excellent presentation on FATCA which he gave to a meeting of Democrats Abroad back in December here: FATCA: Turning US persons into toxic liabilities.
Rommes is quoted several times in the Paperjam article but I thought this one summed it up quite nicely:
Ils ont tiré unilatéralement avec une législation d’application extraterritoriale. Tout le coût est pour nous et tout le bénéfice pour les États-Unis » (they (US) have unilaterally fired on us with extraterritorial legislation. All the cost is for us and all the benefit is for them.)
Paperjam goes on to quote the response of the American Ambassador to Luxembourg which appeared in an interview he had with another publication:
Robert Mandell indique, très diplomatiquement, qu’il fera remonter les plaintes à l’administration centrale, mais qu’elles resteront sans doute lettre morte. « J’ai déjà fait part (de ces inquiétudes, ndlr.) aux plus hauts niveaux du ministère (dont il dépend, ndlr.). Mais je pense personnellement que le Congrès savait très bien ce qu’il faisait quand il a voté la loi. » Évidemment, l’ambassadeur américain n’est pas payé pour mettre en doute la compétence de ses employeurs.(Robert Mandell indicated very diplomatically that he will pass along the complaints to the central administration but they will most likely not be taken into account. “I already have informed the highest levels of government. But I think personally Congress knew exactly what it was doing when they voted for this law.” Clearly the American Ambassador is not paid to doubt the competence of his employers.)
You can read the full text of Mandell’s interview with Delano in the December 2011 print edition which can be found here.
Well, at least the ambassador to Luxembourg seems to at least recognise that FATCA is an issue. I would imagine that a banking centre like Luxembourg will be very hard hit by FATCA. Here is a link to a presentation that the head of the Luxembourg Banking Association, Jean-Jacques Rommes, gave to some US expats recently about FATCA. You can see his powerpoint slides at the bottom of the page.
I heard, Don (no independent confirmation of this) that the US Ambassador to France will not touch this one with a ten foot pole.
That’s a great presentation by Rommes. I think an email is in order thanking him for his efforts.
I’m just amazed that it took this long for EU entities to wake up. Most EU citizens are still completely in the dark. I’m talking to a fellow blogger right now about it here:
He’s been in the EU for twenty years and had no idea about any of this.
Thank you for posting the well-written piece on FATCA by the Luxembourg Bankers Association.
I think the congressional committee (and probably some think tank) that dreamed up FATCA either underestimated the inevitable blow-back of “mass citizenship renunciations and lost capital investment” or was so intoxicated with US imperial hubris, that they understood but just didn’t care.
Below is an old but for-telling piece from zerohedge.com about FATCA titled: “It’s Official – America Now Enforces Capital Controls.”
Whether due to incompetence or arrogance, FATCA is in fact, an act of war against the American Diaspora. Most countries embrace their Diaspora; the United States is trying to destroy it.
New Barrie McKenna article in the Global and Mail. US feeling heat and starting to back down on FATCA(In my opinion this is the to keep the pressure up). I am really pissed of at Barrie McKenna as the people he keeps mentioning (Americans in Canada) are mostly Canadian citizens who affirmatively decided to become Canadian citizens in most cases years ago.
Brilliant find…but reading this has made me positively fume if this proves to be correct next week when they release this info:
“….implementing the new regime will be hugely costly, dangerously extraterritorial and may run afoul of privacy laws….One option being explored is having financial institutions report to their home countries’ government, which could transmit information to the IRS, she said.”
He better not be referring to the EU. That is absolutely shameful if that is the “solution” to the breach of privacy laws.
Additional article from the UK that seems to indicate the UK is fighting hard over several key FATCA provisions. (This article might be a day or two out of date to what Barrie McKenna is reporting).
The info here is even worse though:
“The UK Treasury is lobbying hard – not against the principle of data exchange but to try to find ways to soften its application…It has noted, for example, that passing information to the Americans would probably breach Britain’s Data Protection Act. So it is looking for ways the reports can be passed to the UK Government, which would then pass them across to the US. ”
Looks like everyone has already rolled over if they are negotiating from the position of “OK, but let’s soften it down a bit” instead of where there should be negotiating from, which would be “No way are you getting any of this data. It breaks our privacy laws and is detrimental to our premier industry”. I lose more hope every day that FATCA will ever be repealed.
I really think that all of these countries are going to sell out their citizens with ties to the US. Gosh, I really have to get this renunciation thing done soon. I think the FACTA goes into effect in 2013.
@Spartacus – What I am hoping for is that the US starts the slow process of recognition of its diaspora and that we can start negotiating with the homeland in matters that concern us
@Don – If the info was passed from the bank to the local government to the IRS I guarantee you that a number of people will magically disappear from the list – Europeans with political connections for example.
I don’t think that the battle is over yet. The cost is prohibitive. The EU public has yet to be informed (and will remain uninformed if the govs have anything to say about it) about how this will effect them. I think the Evening Standard piece does a nice job of sorting it out for them. 🙂
Yep I just ran this “pass it through our governments” proposal and my French husband said, “Oh that’s so the politicians can get their friends off the list.”
At least from the Canadian perspective they already send non resident account info(on US “residents”) to the US for many years(Thats why when they implemented FATCA without regard for this existing agreement it was assumed they were going after Expats as the CRA wouldn’t share info on Canadian residents). However, if you actually look at a T5(what you will fill out to get an interest bearing bank account) or T1(General personal income return) from CRA they have never ask any questions about nationality other than voter registration. My impression is Canadian law or regulation that asked question of national origin even if on behalf of a foreign government would be a major “charter” violation. It is also my understanding from the Canadian perspective is once information is handed over to the CRA/Federal Government it becomes even more sensitive than info held by the private sector.
The US fully recognizes the Diaspora. The trick is to get them to value the Diaspora, instead of punishing it.
Barrie McKenna updated an old article at the G&M today also.
A Finance department official echoed the unease, saying the government is worried about potential conflicts with Canadian laws, including “the protection of privacy and Canadians’ fair access to banking services.”
Exact same things I have been discussing for a while.
@Spartacus – last summer when I was in Oregon for a family reunion my sister-in-law asked me how many Americans there were abroad. When I replied, “Oh, about 6 million,” there was silence. “So many?” she asked. Yep. It was a very uncomfortable moment. None of the homeland Americans liked hearing it. I think they genuinely thought a)I was an odd exception and b)the numbers are relatively few and are composed almost entirely of people who are “temporarily” abroad. At that moment I came to the conclusion that American Diaspora is an oxymoron for a lot of homeland folks. They just can’t wrap their heads around the concept. And sometimes when I try to explain it to them I feel like the Grinch who stole their Christmas because it really does makes them unhappy.