Cross-posted from the Flophouse. Just can’t get over some of the strange results of U.S. citizenship law. The more I think about it neither jus soli or jus sanguinis are good fits in a globalized world. So I had some fun writing this post and pointing out two rather famous Accidental Americans: Boris Johnson and Anne Sinclair. If you have a chance go read Boris Johnson’s 2006 post – as one of the Flophouse readers said, “I didn’t know Mr Johnson’s prose could be so entertaining to read.”
The United States of America allows for two methods for acquiring U.S. citizenship at birth: jus sanguinis (through an American citizen parent) and jus soli (through being born on U.S. soil). For the latter the U.S. has one of the most open-ended and generous terms around – the mere fact of being born on U.S. soil makes someone a U.S. citizen under almost all circumstances. (The only exceptions appear to be children of diplomats.)
Now it’s very rare to see Americans grumbling about the transmission of citizenship via jus sanguinis (blood). And that’s a bit odd when you think about it because it’s a status that is conferred , not because of anything the child did, but because he had a least one parent with that status. Sounds strangely medieval, doesn’t it? A little like saying that just because your father (or mother) was a peasant (or a lord), you get to be one too. How to square that with modern notions of democracy and voluntary participation in a political community? I don’t think you can – this is citizenship as a kind of aristocracy since it has nothing to do with merit and everything to do with inherited status. Not to mention that this form of citizenship transmission leads to some very strange situations. For example, the child of an American citizen born abroad is usually granted U.S. citizenship no questions asked even if that child never sets one foot in the U.S. for his entire life while resident aliens actually living in the U.S. who (one assumes) are delighted to be there have to jump through all sorts of hoops to be naturalized and may still suffer discrimination in the U.S. on the basis of their origins.
The other method of citizenship transmission, jus soli (place of birth), is much more controversial in the U.S. The media is filled with politicians railing against those “anchor babies” whose mothers allegedly slip over the border to give birth just so their children can be U.S. citizens. There is a great deal of righteous indignation about this and a modest amount of energy expended to stop it. However, the problem (and I question whether it really is one) of the “illegals” sneaking over the border to give birth is nothing compared to the millions of tourists, legal immigrants and visa holders who come to the U.S. every year to live and work and who sometimes do a very human thing while they are in the country: have children. Many of them merrily go on their way after a few years (back to the home country or to a third country) either not knowing that their children are American citizens or thinking that this citizenship is a status that goes away if it’s not activated. Not true. U.S. citizenship laws are strictly “opt-out” – one is an American citizen until one goes down in person to the local U.S. Embassy and renounces. This involves filling out forms and paying a 450 USD fee. It may even involve filing 5 years worth of back tax returns and FBAR’s. This is true even if the person in question was born in the U.S., left with his parents as an infant, and has spent the past 30 years thinking he (or she) is exclusively French, German, Chinese, or Indonesian. Contrary to what the citizens of the “greatest nation on earth” might think, not everyone is happy to wake up one day and discover that he or she is a citizen of said nation. Some are even downright angry about it especially when the U.S. attempts to assert its sovereignty over their persons.
Welcome to the world of the “Accidental Americans.” These are people who, through no fault or action of their own (they didn’t choose their parents or where they were born) are considered to be U.S. citizens by the U.S. government and are flabbergasted when agents of said government reach out and hold them to the obligations associated with that citizenship. “But, but, but,” you may sputtering at this point, “They can’t do that! I’m French (or British or Chinese or German).” Oh yes they can, mes amis, and they do. The consequences of this “involuntary citizenship” can range from being refused entry into the U.S. (even just to make a connection to a third country) without a U.S. passport to being chased down by the American “fisc” for tax returns and reports on their local bank accounts. The first can be dealt with rather easily – just don’t travel anywhere near the U.S. The second is a little harder to avoid these days since five governments in Europe (others to follow) have agreed to turn over information about these people to the U.S. government. Yes, this means that European governments will be denouncing their own citizens (duals, mind you, who may not even be aware they are Americans). This is going to be interesting to watch.
A surprising number of people are at risk here including some very high profile Europeans. This brings us to the case of one Boris Johnson, Lord Mayor of London. Up until fairly recently Mr. Johnson was an American citizen because he was born in New York, USA, something he was vaguely aware of but didn’t really pay much attention to until this event in 2006:
“Last Sunday lunchtime we were boarding a flight to Mexico, via Houston, Texas, and we presented six valid British passports. As soon as the Continental Airlines security guy saw my passport, he shook his head. ‘Were you born in New York?’ he asked. ‘Have you ever carried an American passport?’
Yes, I said, but it had long since expired. ‘I am afraid we have a problem,’ he said. ‘The US Immigration say you have to travel on an American passport if you want to enter the United States.’ B-but I’m British, I said, and my children chorused their agreement. Had the guy stuck around a moment longer, I would have told him how jolly British I was — but luckily for him he’d gone off in search of reinforcements.
When the ranking officer arrived, the story was the same. ‘I’m sorry, sir,’ he said, ‘but you’ll have to go to the US Embassy tomorrow morning and get a new American passport.’ But I don’t want an American passport, I said, inspiration striking me. I tell you what: I renounce my American citizenship. I disclaim it. I discard it.
‘That’s not good enough, sir,’ he said. ‘I need some official document saying that you are no longer American…’
You can read the entire story here but the end result of this was, faced with this assertion of U.S. sovereignty over his person, Mr. Johnson decided that it simply wasn’t worth it and he renounced. In his words, “That’s it. Entre nous c’est terminé. After 42 happy years I am getting a divorce from America.”
Is Boris Johnson’s case really that unusual? Not at all. Look, in addition to the millions of tourists and legal residents in the U.S. some of whom will have children there during their stay, there are 6-7 million Americans abroad and many of them have children too (most of their children are also citizens of their country of residence) who are considered to be U.S. citizens by the U.S. and are supposed to be holding U.S. passports and paying U.S. taxes. Failure to do this means that these people are technically lawbreakers and tax evaders in the eyes of the U.S. government. It really is that simple.
Another example close to my heart. Would any French person in the audience like to tell me where Anne Sinclair (famous French celebrity and Dominique Straus-Kahn’s wife) was born? If you answered, “New York, USA,” you win the prize. And that makes Anne Sinclair and her children as American as apple pie and baseball. If events had gone differently and DSK had won the 2012 French presidential election, France would have had its very own Franco-American First Lady.
Alas, it was not to be. 🙂
Thanks Roger. Okay, not sure if the US citizenship would be in effect for those born to foreign royals on US soil – although if they were there not officially as political entities, but just as students, might they not still possibly be subject to the US rules? I am unclear about that.
There must be many other wealthy or influential or well known figures (other than the Thai king) who we could cite in compiling a list or petition. If nothing else, it would be controversial and attract public interest in the problems that US citizenship based taxation causes.
Check out the 10 most recent Canadian MPs to hail from the United States, as well as a couple notables from way back (complete with slide show)
http://www.huffingtonpost.ca/2012/10/12/canadian-politicians-born-in-us_n_1961175.html
@bubblebustin
the four who are currently serving have just received “The Tweet”
@nobledreamer
Thanks!
Good work, nobledreamer. Mike Sullivan is one who I had some interesting correspondence with many, many months back, posted somewhere here. He was kind enough to respond, unlike many of our other government representatives — and he isn’t my representative.
@badger, that is an outstanding idea. Basically we could “out” all those US persons. 🙂
I like it. I really really like it.
@bubblebustin…
I tweeted 7 out of the 13 that I could find a twitter account on. Simple message…
If you were born in the US, and still an American, how do you feel about FATCA? http://yhoo.it/WhuZHV
Here’s a short list of prominent non-US resident people who may be US Persons. The last known country of residence is also listed:
1) Curt Glover Engelhorn, former shareholder of Boehringer Ingelheim, Switzerland
Why: American mother
2) Princess Ubolratana Rajakanya/ Julie Jensen, daughter of King of Thailand, Thailand
Why: US resident from pre-1972 to 2001, assumed Green Card holder or US citizen,
3) Queen Noor of Jordan/ Lisa Halaby, Jordan
Why: US born
4) Georgios A. Papandreou, former Greek Prime Minister, Greece
Why: US born
5) Children of Nicolas Hayak: former CEO/ Chairman Swatch, Switzerland (deceased: Jun 2010)
Why: Hayek was son of American father
6) Children of Maersk McKinney Moller, Primary owner of Maersk Shipping, Denmark (deceased: Apr 2012)
Why: Moller was son of American mother
7) Children of Princess Grace of Monaco, Grace Kelly, Principality of Monaco (deceased: Sep 1982)
Why: Princess Grace was US born
8) Children of Donald Hillsdon Ryan, founder, Mister Minit, UK (deceased: May 2005)
Why: Ryan was US born
9) Children of Mohammed Morsi, Egyptian President, Egypt
Why: Children were US born
10) DeAnne Julius, economist, former Bank of England board member, UK
Why: US born
11) John McAfee, software entrepreneur, Belize/ somewhere
Why: US born
@Innocente:
3. Queen Noor seems to have been told that she relinquished by obtaining Jordanian citizenship. That probably puts her in the same position as many of the Canadians here who never got CLNs. http://news.google.com/newspapers?id=7tBKAAAAIBAJ&sjid=uukMAAAAIBAJ&pg=1039,7210127
4. Papandreou was reported to have renounced his citizenship in 1964: http://news.google.com/newspapers?id=BKEeAAAAIBAJ&sjid=GKcEAAAAIBAJ&pg=1446,6698518
7. Princess Grace’s kids were unilaterally determined to be U.S. citizens by the State Department when they were born: http://news.google.com/newspapers?id=fKwpAAAAIBAJ&sjid=5vYDAAAAIBAJ&pg=4383,4662205
@Eric:
3. Queen Noor and 7. Princess Grace: thank you for the additional research.
4. Papandreou: Georgios Papandreou was the Greek prime minister from 2009 to 2011 and is the son of Andreas Papandreou. Georgios was born in St Paul, Minnesota while his father was a professor there. I can find no record of Georgios renouncing.
If I’m not mistaken, the American actor Johnny Depp lives in France.
great investigative work everyone.
@notamused
I believe Depp move back to the US for tax reasons
@James Jatras:
You’ve probably got more research resources than we do for compiling a really excellent list of prominent politicians/personalities/wealthy/famous persons who were born in the US – and who thus may be required to comply with FATCA and FBARs. What about a provocative press release posing that question in public: i.e. ‘Do these famous people living abroad have the duty to report to the IRS? ‘It’s a question of FBARs and FATCA’. Or, ‘Should the Queen of Jordan file US tax returns and FBARs?
The great thing about including foreign politicians and heads of state, are that they sign off on national accounts. To even raise the question demonstrates how insane and arrogant the US demands are in real life application. No-one cares about us, but FATCA and FBARs assume criminal activity is rampant – before the fact – so, how would it play out if the US were seen to presume that even foreign heads of state should shoulder ‘their fair share of US tax”?
Even if for various reasons (diplomatic status, etc.) they didn’t have a US reporting and taxable status, or were compliant (impossible to believe), just posing/raising the question, straightfaced , would not only bring that People magazine/National Enquirer popular spin to bear on the FATCA/FBAR/extraterritorial question, but it is very embarassing for the US to have to explain either way.
If the US says they can’t comment, it looks suspicious. If the US tries to explain that that famous individual is not a US taxable and reporting person, it raises public interest. If the US acknowledges the person is a US person – that is very interesting. Seems win win?
Has to be framed so that it doesn’t imply that the person owes US taxes or has done anything to evade them, but just pointing out these incongruous examples of how merely being born in the US can be used for the US to invent a taxable status – whether you’re Queen Noor, or OrdinaryJoeAbroadinCanada – might be sufficient?
Besides, the US public might get in an uproar if the US tried to duck the question of why only some should be subjected, but the wealthy and prominent heads of state or international politicians and their families aren’t. If the US public thinks that the wealthy inside the US, plus anyone no matter how ordinary – with mere US citizenship by birth, or any other US status should report and pay US taxes anywhere in the world, why would they support letting wealthy and prominent royals or heads of State be exempted? Levin et al were quite willing to try to skewer Eduardo Saverin, but what about the King of Thailand? What about Queen Noor? What about Boris Johnson? Probably those who are prominent abroad have never even tried to renounce – knowing that their status protects them.
Appeal in a way couched in popular phrases used by the IRS and Treasury : “when citizens abroad don’t pay their fair share of taxes ……” or any of the other ridiculous phrases about ‘paying for the privilege of having US citizenship’. Parody the common claims that the US will provide services – like rescue these US born persons (ex. Queen Noor, Boris Johnson, etc.) from jams abroad, and transport them out of conflict zones using US transports…
@bubblebustin – OK, I stand corrected. Isn’t there a heavy fine for moving back for tax reasons, though? 😉
*@notamused, I don’t think there is a heavy fine for moving back for tax reasons, but the Reed Amendment to the Immigration Act of 1996 contains the provison that if you renounce US citizenship for the reason of avoiding US tax then the Secretary of the Treasury may place your name on a blackist so that you are prohibited from ever visiting the US again for any reason, including visiting an elderly parent in a US nurshing home, as long as you live. As far as I know this provision has never been applied, but it is part and parcel of the law, so all it would take is “word from on high” to start applying enforcing it. Other than freeing yourself of the obligation of being subject simultaneously to the tax systems of two different countries when you are living abroad, there are probably few other reasons why a US citizen would find it necessary to renounce their US citizenship. Rarely, for example, do foreign citizens who immigrate to the US and become US citizens ever renounce their former citizenshp. It is not a liablity for them like it is for Americans who live abroad. From one day to the next Congress can and does enact laws like TARP and FATCA that adversely impact US citizens living in a foreign country without there being any mechanism to inform them of these new US tax law obligations.
There are a few countries which, as a condition for naturalization, require that you present evidence issued by your original country of citizenship that the other country no longer recognizes that you as its citizen. But the US is not among the nations that require you to renounce your former nationality to acquire US citizenship.
For many years, since 1970, the requirement for FBAR reports has been a law, but there was no real effort to enforce it. Then even though it is not a tax law, Congress turned enforcement over to the IRS and it has been enforcing it with a vengeance against overseas US citizens who never even knew there was such a law. Nobody but the IRS knows how many billions of dollars have been collected in fines and penalties from US citizens living abroad, not a few of which have had all or most of their savings for retirement literally confiscated by the IRS when they were informed of this law and came forward to “get right” with their unknown FBAR filing obligation.
Both US citizens who renounce their US citizenship as well as green card holders who cancel their US residency are subject to a US exit tax if their income is over a certain threshold level or if the value of their assets located anywhere in the world exceed a certain amount. This exit tax is similar to a capiital gains tax as if you had sold your assets for their value on the day prior to your renunciation or cancelation of you green card. Until you have renounced your US citizenship or canceled your green card when you relocate abroad, you continue to be subject to US taxation on your world-wide income by the IRS, and your estate is subject to US estate taxes.
@notamused, iamamused!
Your comment reminds me of a post I once made about how the USG is going to start charging non-resident US citizens to process their offshore tax returns because they net the US little in revenue!
@notamused:
I divide Americans abroad into four categories:
1) Emigrants
– A dual citizen or have at least a permanent non-US resident status
2) Accidental Americans
– “Involuntary US citizens”
3) Immigrant returnees
– includes naturalized US citizens and Green Card holders who return to their native country
4) Americans who live abroad
– Short-term expats, internationals and similar
To make my list, the American abroad needs to be prominent/ notorious, preferably wealthy and of types 1), 2) or 3). I consider Johnny Depp, Tina Turner, George Clooney, etc. to be in the category “Americans who live abroad” and so they don’t make my list.
Additional candidates:
12) Princess Angela of Liechtenstein/ Angela Brown, Principality of Liechtenstein
Why: born in Panama, grew up in New York, likely a naturalized US citizen
13) Tor Peterson, one of the six Glencore billionaires, Switzerland
Why: US citizen
14) Son of Crown Prince Leka of Albania, Australia, etc. (Deceased: Nov 2011)
– Son is also called Prince Leka
Why: Crown Prince’s mother was American
Not of the stature of kings and queens, I read in a biography of Sylvia (of Ian & Sylvia http://en.wikipedia.org/wiki/Ian_%26_Sylvia) that she was proud that she was able to be a dual citizen because her mom was an American. She would have lived in the US for long periods of time, as well as Ian (who now ranches, writes and too infrequently performs in Alberta).
@Roger Conklin – Yes, I know. Like many other expats and renunciants, I wish it wasn’t necessary to become knowledgeable about the USG’s ridiculous policies, as I’d much rather spend my time on things other than their nonsense, but that’s just the way things are for now.
@bubblebustin – Indeed! It is laughable, but at the same time a tragedy because such penalties are no more absurd than those which the USG already has in place…
@Innocente – Fine.
The FT and other newspapers are reporting that Margaret Papandreou, mother of the former Greek prime minister, Georgios A. Papandreou, is the beneficial owner of a Eur 550 million bank account at HSBC in Geneva. Margaret Papandreou was born Margaret Chant in Elmhurst, Illinois and married Georgios’ father, Andreas Papandreou, while she was a student and he a professor at the University of Minnesota (Andreas was also a Greek premier). Wonder whether this 89 year-old American has been filing an FBAR or has a CLN to prove she is an ex-American?
“Papandreous deny Swiss cash claims”
http://www.ft.com/intl/cms/s/0/eb272b00-3ca1-11e2-a6b2-00144feabdc0.html
Margaret (Chant) Papandreou entry in Phantis Wiki:
http://wiki.phantis.com/index.php/Margaret_Papandreou
@Innocente, I know a woman (someone’s grandmother who passed away in 1991) who was a green card holder towards the end of her days despite her being born in the USA. Why? Because when she was a young woman, if you moved to Canada and took on the nationality of your Canadian husband, and she lost hers US citizenship on her wedding day. Later, she moved back to the US. Today, losing your citizenship as a bride of foreign nationality would be a gift.
Dame DeAnne Julius. DCMG, CBE as well as PhD, is a prominent American emigrant to the UK. Yesterday the FT carried a commentary that she had written (“Time to prepare for the scottie”) which led me to look at her Wiki entry:
https://en.wikipedia.org/wiki/DeAnne_Julius
It was a surprise to see that, although Wiki lists a lot of information about her, that her birthplace is “Unknown”. I proceeded to investigate to determine who this noble person is with an “unknown” birthplace:
Based on high school yearbooks, Dame DeAnne grew up in Ames, Iowa, where she is variously listed also as Dee Julius and D. Julius, and graduated from Iowa State University in Ames, according to several sources. But where was this mystery lady born?
Her father, who is still living and won’t be named, is listed in 1950 as living at a street address where DeAnne is later listed in public records as living. Although the evidence reviewed does not conclusively indicate that she was born in Ames, Iowa, USA, e.g., she could have been born in 1949 while her parents were visiting grandma somewhere, etc., it is likely that she was born in Iowa, USA and probably in Ames. People didn’t jet around back then like now.
I next searched the Federal Register Expatriate listings to determine whether anyone with a Julius surname had ever expatriated, and also searched under her husband’s surname, Harvey. Although there were no plausible hits, this of course doesn’t demonstrate a lot since the Federal Register Expatriate listings are considered incomplete, to be polite.
So why does her Wiki entry list her birthplace as “unknown”? An oversight? Intentional due to shame of her background? Doesn’t wish to be outed as a US Person? I don’t know but I can imagine.
http://www.roche.com/about_roche/management/board_of_directors/board_of_directors-julius.htm
The Roche website (she is a director) lists her nationality as American and British in her profile.
Just discovered that the following Canadian MPs were born in the U.S.A.:
Diane Ablonczy (Peoria, Ill.), Charles C Colby, Mike Sullivan, Ted Tsu and Garrison Randall. I wonder how many MPs have one American parent who may have infected them with U.S. personhood?
@banany: Good sleuthing. How did you track down their birthplaces?
Yes, one can be infected by a parent, or one can acquire the symptoms as an STD through marriage or even through business arrangements. As we know, the treatment is very expensive and time-consuming and isn’t covered by insurance. 🙁