The vice-president of Samsung Family Office wrote an article in the Korea Economic Daily a couple of weeks ago discussing the effects of FATCA. Samsung Family Office is a division of Samsung Life Insurance which markets products and services to customers with more than three billion won in assets — that is to say, people who would be “covered expatriates” if they are U.S. Persons. Of interest: his report that South Korea’s legislature is already considering amendments to tax laws in order to pave the way for an inter-governmental agreement.

As mentioned previously here on Isaac Brock, green card holders are doing much more than “paying close attention”. Many of them are giving up their green cards entirely. In 2011, according to South Korean government statistics 2,158 South Koreans gave up U.S. green cards or citizenship. This of course is greater than the number of names of all nationalities in the U.S.’ Federal Register list for that entire year.

Throughout this entire piece the author fails to make it clear that these measures will not only affect green card holders in the U.S., but U.S. citizens in South Korea — both expatriates from the U.S., as well as emigrants who have returned home for retirement but are retaining their U.S. passports (for example because they think there will be consequences for their Social Security payments if they renounce).

This of course is an inaccurate description; if the FBAR system “depend[ed] entirely on voluntary reporting” there’d be no opportunity for the IRS to assess fines. In fact as has been seen clearly in the past two years, the IRS will use all sorts of channels to obtain information about accounts in other countries. That said, at least going into the OVDI is still a voluntary decision, though it certainly may not feel that way when the IRS is trying to terrorise you with threatened fines of 300% of your assets (not 50% as stated above — since the penalty can be applied for multiple years).

I have no idea how the second part of his sentence follows from the first, or how it fits with the following paragraph. South Korea has quite a bit of choice in this matter, but of course the author is speaking on behalf of a financial institution, so he’d like to make it sound inevitable, in order to avoid any awkward questions from customers about why his company isn’t doing more to resist it, or whether other financial institutions besides the one he works for might not have to report their customers (such as those banks qualifying for the “local FFI exception”).

Right now under South Korean law, Article 4 of the Real Name Financial Transactions and Protection of Secrecy Act imposes various restrictions on the transfer of personally-identifiable data regarding financial transactions. South Korea and the U.S. set up a Simultaneous Criminal Investigation Program two years ago, which allows for exchange of some tax information, but not for fishing expeditions nor for indiscriminate exchange as in the case of FATCA.

Samsung itself, due to it’s massive economic footprint in South Korea, has quite a bit of influence over Seoul’s response to FATCA. From this article — which was no doubt approved by their PR department before being printed — it seems clear that they are part of the faction who have decided that there is no hope at all to fight FATCA and so are proceeding lobby their government to surrender to it as quickly as possible and dump all the harms and costs on the public at large. That means, of course, the same thing we saw in the Netherlands — the executive branch attempting to ram through amendments to privacy laws on behalf of the banks, rather than those banks respecting existing contract provisions and privacy laws which would require them to get consent from account-holders before transferring personal information to foreign governments with extremely poor data protection practises.