Mondaq.com is running the headline “The Netherlands to join Joint FATCA Statement”. This appears to be lifted from an English-language newsletter issued last week by Amsterdam-based law firm De Brauw Blackstone Westbroek. Don’t get the wrong impression, though — no agreement has yet been negotiated. The most recent news is that Finance Secretary Frans Weekers stated last week (link available in Dutch only) that the Netherlands is open in principle to joining FATCA. But the cross-border services providers have managed to miss (or to bury) the real news. Last week some Second Chamber members submitted written questions to Weekers (also in Dutch only; see here for Google Translate’s rendering). I’ve manually translated some of the interesting bits. I am disappointed by many of Weekers’ responses, both for their attitude towards the democratic process and their apparent lack of understanding about FATCA’s effects on bona fide residents of his country who have no financial connection to the U.S. besides their passports.
2. Waarom heeft u de Kamer niet vooraf geïnformeerd over het feit dat Nederland bereid is zich aan te sluiten bij de Foreign Account Tax Compliance Act (FATCA)?
2. Why was this Chamber not informed in advance of the fact that the Netherlands will join the Foreign Account Tax Compliance Act
The answer, of course, is that FATCA was intended, from beginning to end, as an imperialistic end-run around the sovereignty of other countries and their parliaments. And once financial institutions decided that fighting it would be too expensive, they wanted to make sure as quickly as possible that they could dump all the costs and all the harms on the taxpayers of each nation, while avoiding or delaying any potential for democratic consultation that might derail it. So they quickly went to the executive branch and lobbied it to surrender as quickly as possible. In country after country, we see the same plan being set in motion: cabinets will present their national legislatures with faits accomplis which those legislatures will then be cajoled, harangued, or buffaloed into passing. Weekers rambles on for nearly five hundred words to try to hide this fact, but he has to state the real reason at some point — so he pulls the old presenter’s trick of putting the bad news in the middle in the hopes that listeners will have forgotten about it by the time he gets to the end:
Antwoord: … Daarbij heeft een rol gespeeld dat de financiële sector inmiddels had aangegeven zich te willen richten op het kunnen voldoen aan de verplichtingen die FATCA aan hen oplegt en dat de benadering van de VS en de G5 landen (hiernade G5 benadering) juist uitgaat van het zoeken naar oplossingen voor juridische knelpunten enkostenvermindering voor het bedrijfsleven …
Answer: … another [factor] that played a role was that
the Masters Of The Universethe financial sector had already indicated its willingness to focus on satisfying the obligations that FATCA imposes on them, and that the approach of the US and the G5 countries (hereafter, “the G5 approach”) would serve to search for solutions to juridical bottlenecks and reduce costs for businesses …
Schouw and Koolmees went on to ask a number of questions about privacy laws — the same kinds of questions that lawmakers in every jurisdiction in the world have asked or are going to ask. Weekers has no answers yet besides “wait and see and trust us”. But when the two lawmakers suggest that responsibility should be taken out of his hands entirely and put in the hands of judges who will not act from political expediency, he responds quite negatively. Apparently he prefers weakening people’s rights by means of backroom dealings with the imperialistic bullies in the American IRS and Congress, rather than taking the risk that a court might put financial institutions in danger of increased operating costs:
10. Deelt u de mening van Eurocommissaris Reding dat deze jurisdictie kwestie, (wetten van der de landen met gevolgen buiten hun grondgebied die niet verenigbaar zijn met relevante EU-wetgeving op het gebied van gegevensbescherming en de hieraanverbonden rechten), het Internationaal Gerechtshof dient te worden voorgelegd?
10. Do you share the opinion of European Commissioner [Viviane] Reding that this jurisdictional question (laws of countries with consequences outside of their territories are not consistent with relevant EU legislation on data protection and associated rights) should be submitted to the International Court of Justice?
Antwoord: Het is mij niet bekend of Eurocommissaris Reding een dergelijke uitspraak heeft gedaan. Het heeftmijn voorkeur om jurisdictiegeschillen op te lossen langs de weg van gezamenlijk overleg, en waar mogelijk, met behulp van verdragen of coördinatie van wetgeving.
Answer: I am not aware that European Commissioner Reding has given such a statement. It is my preference to solve jurisdictional disputes by way of joint consultation, and where possible, by means of treaties or coordination of legislation.
Two D66 members indeed wrote Reding a letter about FATCA in January (in English) asking this question, but I have not been able to locate her response. Have any other commenters heard anything about this?
Aside from the above questions, Helma Neppérus of the centre-right VVD submitted her own set of six questions, among which the penultimate one asked about the territorial scope of data collection — seemingly suggesting that the Netherlands may be seeking information about Dutch expatriates. (Of course, drawing that implication requires you to presume that Weekers actually understood the question properly and understands what U.S. tax law is going to do to his country’s sovereignty.)
5. Welke informatie ontvangt Nederland van de Verenigde Staten over onze belastingplichtigen die in de Verenigde Staten woonachtig zijn?
5. What information will the Netherlands receive from the United States about our taxpayers who are resident in the United States?
Antwoord: Momenteel ontvangt Nederland van de VS reeds gegevens op verzoek en spontaan op basis vanhet belastingverdrag. Daarnaast is Nederland met de VS in overleg om op wederkerige basisautomatisch informatie uit te wisselen. De Nederlandse inzet daarbij is gericht op degegevenscategorieën die gebruikelijk worden opgenomen in de Nederlandse overeenkomsten inzake automatische gegevensuitwisseling, zoals loon, pensioenen, dividenden en interest. Als Nederland en de VS een overeenkomst zullen sluiten in navolging van de G5 landen en conformde aanbeveling van de Europese Commissie, dan zal Nederland van de Amerikaanse belastingdienst dezelfde informatie ontvangen over Nederlanders die in de VS rekeningen aanhouden bij Amerikaanse financiële instellingen als de VS op grond van FATCA ontvangt vande Nederlandse belastingdienst over Amerikaanse klanten van Nederlandse financiële instellingen.
Answer: At present, the Netherlands already receives data from the United States upon request and “spontaneously”, on the basis of the tax treaty. In addition, the Netherlands and the U.S. in consulation with each other reciprocally exchange information on an automatic basis. The Netherlands’ efforts are thereby focused on the categories of data which are customarily included in Dutch agreements on the subject of automatic information exchange, such as loans, pensions, dividends, and interest. Likewise, any agreement between the Netherlands and the U.S. will closely imitate the G5 and will conform with the recommendation of the European Commission, and then the Netherlands shall receive from the American IRS the same information about Dutch people who in the United States hold accounts with American financial institutions as the US shall likewise under FATCA receive from the Dutch tax service on American customers of Dutch financial institutions.
This is a very confusing question with an equally confusing answer. I checked as carefully as I could that I am not misunderstanding the scope of the word woonachtig. A trip to the dictionary gives such synonyms as gedomicilieerd (“domiciled”) and zetelend (“settled”). Neppérus appears understands what’s at stake with FATCA — the U.S. wants to collect information on residents of the Netherlands, despite the fact that IRS always tries to confuse the issue by referring to “U.S. taxpayers” — and she wants to know the extent of the alleged American “reciprocity”. But she asks her question in a strange form: about Dutch “taxpayers” who reside in the United States. The Netherlands, like all normal civilised countries, does not tax its non-resident citizens; if a Dutch person or anyone else resides in the U.S., his only sources of income which might be subject to Dutch tax are those with a Dutch source — about which the Netherlands already has information and doesn’t need to ask for anything from Washington. However, Weekers’ response only refers to Nederlanders die in de VS rekeningen aanhouden (“Dutch who hold accounts in the United States”) without mentioning the crucial distinction of residency/domicile at all. It’s hard to say what this actually means …
Anyway, a final translation note: in the coming week you might see some Anglophone media reporting Weekers’ title as “State Secretary” or “Secretary of State”. This is a literal but misleading translation of Staatssecretaris — that position is not at all like the similarly-named U.S. Secretary of State (the equivalent of the Minister of Foreign Affairs in a parliamentary system). Weekers’ position, rather, is roughly analogous to the U.S. Deputy Secretary or Undersecretaries of the Treasury. (If you can name them off the top of your head, that’s a sign that you spend entirely too much time reading about politics). Finance Minister de Jager himself does not appear to be getting involved publicly at this time.