The exact text is:
NEGOTIATION OF AN INFORMATION EXCHANGE AGREEMENT WITH THE UNITED STATES
November 8, 2012
Negotiations are being held between Canada and the United States on an agreement to improve cross-border tax compliance through enhanced information exchange under the Canada-United States Tax Convention, including information exchange in support of the provisions enacted by the United States commonly known as the Foreign Account Tax Compliance Act (FATCA).
The purpose of this bulletin is to inform persons whose interests are affected by the provisions of FATCA that the Government is actively seeking a solution to issues raised by such provisions. The Government of Canada has received input from many individuals and groups in relation to the implications of FATCA.
Persons wishing to offer additional comments concerning the negotiations may send their views to:
Department of Finance
17th Floor, East Tower
140 O’Connor Street
Ottawa, Canada
K1A 0G5For further information contact:
Kevin Shoom
Business Income Tax Division
613-992-2980
I strongly suggest that the Isaac Brock Society make a formal submission. I am happy to volunteer my contribution to this – and I hope others will too. I note the following comment on this topic by Jim Jatras.
Canada seeks public input into #FATCA negotiations with Form Nation fin.gc.ca/treaties-conve…
— U.S. Citizen Abroad (@USCitizenAbroad) November 8, 2012
@Osgood. Yes, let’s do stay in touch. If you find a twitter account for that Green MP, I will be happy to tweet her the question!
@Just Me
All the details are here: http://www.greens.org.nz/people/juliegenter
I am not a twitter user but it looks like the account is: twitter.com/julieannegenter
@osgood. I will do that after dinner tonight. And, you should try twitter. We need more adding to the bumper sticker messages in the ether. Sometimes it works, and it is easy to do. It is the only social media I use, other than this blog! LOL
I am still working on this, but I some preliminary thoughts.
One thing I will probably include will be a requirement that any IGA be consistent with Canada’s law, including in particular the Personal Information Protection and Electronic Documents Act (S.C. 2000, c. 5). Take particular note of Schedule 1: PRINCIPLES SET OUT IN THE NATIONAL STANDARD OF CANADA ENTITLED MODEL CODE FOR THE PROTECTION OF PERSONAL INFORMATION, CAN/CSA-Q830-96, Principle 2: Identifying purposes.
Consider the following:
4.2 Principle 2 — Identifying Purposes
The purposes for which personal information is collected shall be identified by the organization at or before the time the information is collected.
and this:
4.5 Principle 5 — Limiting Use, Disclosure, and Retention
Personal information shall not be used or disclosed for purposes other than those for which it was collected, except with the consent of the individual or as required by law.
This prima facie suggests that bank customers’ personal information cannot be disclosed without permission of the owners.
Food for thought…
Some other material to quote in a submission:
from
‘System is ‘very strong’: Advocating Canada’s banking on a global stage; Q&A By Terry Campbell, Financial Post
August 3, 2012
…………….”Q Canada opposes the planned U.S. Foreign Account Tax
Compliance Act (FATCA) aimed at American tax evaders in this country.
Explain your concerns.
A FATCA is the poster child for the problem
of extra-territoriality. One can understand the rationale. They want to
cut down on tax evasion. Fine. We understand that and are sympathetic
to that. It’s the way they have chosen to go about doing it that is a
real problem. It’s hugely unworkable. It extends U.S. territoriality
into Canada. It threatens to erode Canadian sovereignty. Ultimately …
FATCA would have turned individual banks, individual financial
institutions, into arms of the IRS (Internal Revenue Service) in the
United States. If FATCA came through in its current form, before a
Canadian citizen could open up a bank account at a Canadian bank, you
would have to prove you were not an American citizen.”
gisfeld@nationalpost.com
© Copyright (c) National Post
Read more: http://www.vancouversun.com/business/System+very+strong/7034448/story.html#ixzz2BycudxWs“
Described some of this to a US homelander familiar with Canada, just this weekend, and
they couldn’t believe it. They had absolutely zero idea what I was talking
about, whether it be the 3520s, FBARs, and other reporting IRS issues for those
living here, or FATCA (which they hadn’t heard of). They still didn’t get the enormity of the possible penalties – as they just kept saying – “but you live in Canada”, and “but you don’t owe any US tax”. Yup.
They did say they were shocked that Canada would even entertain the idea of cooperating with the implementation of FATCA – and the intrusion into the legal post-tax accounts of those living inside Canada, and conflict with Canadian law. They didn’t know that the US is treating all accounts outside the US as if they were in the Caymans – and couldn’t understand why Canada was being treated as if it were a nest full of drug lords and terror-funders laundering criminal proceeds in a ‘tax haven’. Especially as they know that all our accounts are registered with our SIN tax # and transparent to the Canada Revenue Agency. So, even some very ‘patriotic’ UShomelanders see this as an egregious insult to and breach of Canada’s national sovereignty.
As per the earlier advice from @Tim (?) to start calling re the Dept. of Finance re FATCA:
Reminder to IBS readers to call Kevin Shoom – Business Income Tax Division
613-992-2980 to ask about the FATCA comment process and timelines – particularly as the tiny reference to it in the Globe last week (“Globe’s Report on Business section, from Friday Nov.9, bottom of page B5:) has the wording: “Canadian Finance Minister Jim Flaherty *confirmed the two sides are *“nearing a conclusion” to the issue.”” Which is subject to all sorts of interpretation.
http://www.globeadvisor.com/servlet/ArticleNews/story/gam/20121109/TICKERAATL_1G
Even if you’ve already sent something in – you can still cite the *phrase above, from the Globe story, as an issue – expressing concern that a decision has already been made – without adequate opportunity for any public comment or participation by Canadian citizens and residents who would be profoundly affected.
Hi, badger.
I tried to call — Out of Office message / Kevin Shoom will be back in the office tomorrow. Left a message; will call back in tomorrow.
Thanks for all you’re helping us with this.
Couldn’t do it without the support and company and information shared on here @Calgary; has been critical for me. Appreciate it more than I can say.
@badger. Me Too!!!
(My dream is having a big reunion celebration when / if? this ever over with and meet all the people I respect so much.)
American Citizens Abroad, as now put up a link speaking to the IGA issue.
In it, they say this…
Here is the link….
Nevertheless, the IGAs add a new element of complexity into FATCA compliance and carry an enormous burden for the international world of finance. To understand what is at stake with the IGAs, ACA recommends reading a well-informed letter written by a New Zealander to the Australian government warning against the dangers of entering into an IGA with the United States.
Voices in the United States are also denouncing FATCA and the IGA agreements, including US Congressmen and Senators, the Florida banking association, the Center for Prosperity and Freedom and a new website focused on repealing FATCA, http://www.repealfatca.com, headed up by James Jatras, principal of Squire Sanders Public Advocacy, a Washington-based government relations firm.
These voices anticipate the negative impact of the FATCA on the United States through reduced foreign investment in the United States and heavy administrative costs for US financial institutions, responsible for identifying FATCA complying and non-complying foreign financial institutions correctly, withholding taxes if necessary and, more significantly, identifying foreign owned client accounts in the United States if reciprocity is required due to the IGA. While financial institutions in each foreign country are only concerned about reporting on American clients, US financial institutions will have to identify and deal with foreign owned accounts of citizens from countries all around the world. Political pressure is building.
Just Me,
I hope you are posting this information in a comment on that delightful HuffPost article? I’ll copy and paste it in otherwise.
…and, again, Thanks for all!
Thanks for the update @JustMe, and what a letter from NZ! – skimmed, and now to re-read it and see what can be turned to use in other country context.
I’d like to suggest that everyone who’s making a submission fire off this letter to your MP, as I did John Weston:
Dear * ,
On November 8th the Department of Finance announced that it is accepting input from Canadians regarding our government entering into an Intergovernmental Agreement with the US on FATCA.
http://www.fin.gc.ca/treaties-conventions/notices/unitedstates-etatsunis-eng.asp
There was no stipulation as to how long the public has to provide input, but on the very next day the Globe and Mail quoted Minister Flaherty saying the two sides are “nearing a conclusion” on the issue.
http://www.globeadvisor.com/servlet/ArticleNews/story/gam/20121109/TICKERAATL_1G
The Canadian government absolutely should not enter into any IGA without allowing enough time for all Canadians to be made aware of FATCA, which is far from the case right now. This is especially important since there is a growing resistance to it among citizens and lawmakers in the US itself that may effect the outcome if given enough time.
I would be grateful if you would take a few moments to read my submission to the Department of Finance: “…”
@Calgary411,
I have not, so you can go ahead. I am out of computer time, as preparing to leave for NZ, and have to make the last trip to visit my mother before we leave. Probably won’t be back on line for 4 days or so…
Have a safe trip Just Me.
Safe journeys, Just Me.
I don’t know how you juggle all you do and contribute as much as you do. I don’t find enough time for what I have to do — and I’m retired. Take care.
Pssst @ calgary411 — Awhile back I suspected Just Me had found a way to clone himself. I asked him about it but he gave no response. All that did was make me suspect my suspicion was correct. 😉
@Em,
You were definitely on to Just Me. Sort of like Clark Kent.
I have a second here, so let me post this (twice) from Jim Jatras. It needs a separate post, but no time..
Intergovernmental agreements make-or-break for FATCA; ACA statement of resistance; Congress blindsided; Canada crucial
The recent announcement by outgoing Secretary Timothy Geithner’s Treasury Department that it is in the process of negotiating intergovernmental agreements (IGAs) to implement FATCA (“Foreign Account Tax Compliance Act”) with some 50-odd countries means both less and more than meets the eye. It is less, because Treasury is far shorter along the road to achieving such agreements than they would like everyone to believe. It is more, because creating the impression that the world is flocking to comply with FATCA (via IGAs) is essential to saving an otherwise unenforceable law – a ploy that might work, though, if they are allowed to get away with it. (More on this below.)
Of particular note is this clear-eyed and courageous statement from American Citizens Abroad (ACA) in opposition to IGAs to implement FATCA:
Resistance to Agreements on FATCA
The US government announced in November 2012 that it is negotiating with some 50 countries Intergovernmental Agreements (IGA) concerning the FATCA legislation. These agreements are modeled on the IGAs announced earlier this year with Great Britain, France, Germany, Italy and Spain. Under these agreements, the foreign financial institutions would report the bank accounts of American citizens to their own governments, which would then exchange information with the US. These agreements are intended to circumvent the legal impossibility of carrying out the initial FATCA legislation since privacy laws in countries throughout the world make it illegal to report client information to third parties, in particular to foreign nations. The IGA agreements include some element of promised reciprocity on the part of the United States, an element totally missing in the initial FATCA legislation, and may alleviate certain reporting requirements of FATCA legislation for certain types of foreign financial institutions and some of the pass-through withholding requirements.
Nevertheless, the IGAs add a new element of complexity into FATCA compliance and carry an enormous burden for the international world of finance. To understand what is at stake with the IGAs, ACA recommends reading a well-informed letter written by a New Zealander to the Australian government warning against the dangers of entering into an IGA with the United States.
Voices in the United States are also denouncing FATCA and the IGA agreements, including US Congressmen and Senators, the Florida banking association, the Center for Prosperity and Freedom and a new website focused on repealing FATCA, http://www.repealfatca.com, headed up by James Jatras, principal of Squire Sanders Public Advocacy, a Washington-based government relations firm. These voices anticipate the negative impact of the FATCA on the United States through reduced foreign investment in the United States and heavy administrative costs for US financial institutions, responsible for identifying FATCA complying and non-complying foreign financial institutions correctly, withholding taxes if necessary and, more significantly, identifying foreign owned client accounts in the United States if reciprocity is required due to the IGA. While financial institutions in each foreign country are only concerned about reporting on American clients, US financial institutions will have to identify and deal with foreign owned accounts of citizens from countries all around the world. Political pressure is building.
(Updated Nov. 2012)
As has become increasingly evident in recent weeks, Treasury knows it cannot make FATCA work without the IGAs, but foreign financial firms that stand to be hit with crushing compliance costs under unilateral (non-IGA) FATCA enforcement have been approaching their governments to negotiate IGAs with Washington in the hopes of some modest relief. Even though it is Treasury that is in a race against time to sew up enough IGAs before they would have to take the plunge on a predictably disastrous attempt at unilateral enforcement, foreign firms (and in turn, governments) seem to be falling for it, though not at the pace Treasury would like.
Just from a cost point of view (leave aside for the moment trivia like national sovereignty), it’s hard to overstate how counterproductive this is from the point of view of the institutions themselves. Take a look at what they will be saddled with (under Art. 2(a) of the IGA, just mentally substituting “Country X” for “the United Kingdom”). Granted, the list of exempt institutions found in Annex II (the annexes are the only negotiable part of the IGA, the rest of the agreement is not!) would provide relief for certain firms. But for most, their burdens would be very close – and hardly less expensive – than what foreign institutions would face under unilateral FATCA enforcement by the U.S. The main difference is that the mandates would be imposed under their own domestic law (which actually would allow individual firms less flexibility) and perhaps some degree of administrative streamlining, with the foreign government acting as the IRS’s deputy.
Keeping Congress Out of the Loop
The other time-sensitive vulnerability for the soon-to-depart Mr. Geithner is to reach a critical mass of IGAs before U.S. domestic industry and Congress mobilize in earnest against FATCA. While the euphemistically dubbed foreign “partner” under an IGA may consider the agreement a treaty under its own laws, or may require passage of domestic legislations to implement it, the Treasury Department has carefully crafted the IGA so as not to give Congress a voice on imposition of burdensome and invasive mandates on domestic industry under these agreements – mandates not found anywhere in the FATCA law itself. As recently confirmed to me directly by a Treasury official, on the U.S. side these IGAs are Executive Agreements.
This means, first, that the IGAs will not be subject to the advice and consent of the Senate. Second, it means that Treasury plans to issue regulations on U.S. domestic institutions under Art. 2(b) under what it claims is existing legal authority. They would only come back to Congress if and when they planned to expand the scope of those obligations – as indeed they already have promised to do under Art. 6 of the very same IGAs:
“The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchangewith the United Kingdom. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with the United Kingdom by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.” (emphasis added)
This means that Treasury has already “committed” to foreign governments a far more burdensome and expensive regime, one that would approach those FATCA imposes on foreign institutions at costs estimated in the tens of millions of dollars per institution, untold billions in aggregate. Indeed, foreign “partners” are being asked to sign IGAs on Treasury’s solemn commitment to “achieve” such equivalent exchange via new legislation.
Action Required!
At this juncture, it is imperative that –
FATCA advocates have been able to scare away serious resistance to date by implying that an opposition to FATCA means fronting for “tax cheats.” (That’s comparable to saying Prohibition shouldn’t have been repealed in light of its massive, unintended harmful effects because that might look like an endorsement of alcoholism.) In fact, FATCA does nothing to target directly real, live tax evaders – people who already are consciously engaging in criminal activity – and instead imposes costs on anybody and everybody else: foreign financial institutions (who are presumed to be bad actors helping tax cheats), Americans abroad, U.S. financial institutions (who would be hit with heavy costs to make a show of “reciprocity,” even though in many cases the information they would expensively collect and provide may be of little use to the foreign “partner” and of zero benefit to the U.S.), and Americans generally (who would be hurt from withdrawal of foreign investment from the U.S. and consequent job loss and higher banking, insurance, and other fees due to passed-on costs). The hope that real tax evaders, who are notoriously good at hiding their tracks, would be netted in the process is nothing more than an improbable conjecture.
Consistent with the thoughts contained in the ACA statement, activists in Canada and other countries are sounding the alarm to the injury their governments inadvertently may cause by signing onto an IGA with the U.S. It’s important that that resistance spread to other countries, and especially that Americans wake up to the impending danger.
Jim Jatras
http://www.repealfatca.com
@RepealFATCA
RepealFATCA@gmail.com
*The problem is endemic. As a Canadian born citizen. Let me clear things up for you: The Canadian Public Viewpoint is: “It doesn’t affect us so why should we care!” They have the same viewpoint as US Homelanders. They don’t give a shit what happens to you guys. They have you all pegged as US tax evaders. They don’t care that you pay into the Canadian economy and pay your Canadian Taxes.
Do you get it now? That’s the viewpoint of 85% of Canadian MPs too.
@The Animal
I agree, and fear that when they do become aware of how our ‘non-compliance’ is negatively effecting them, they too will blame us instead of the US government. We will soon see Canadian turned against Canadian, as we now see American turned against American. The big difference, however, is that we don’t have to convince Canadians that citizenship based taxation (the source of all of our troubles) is wrong.
@bubblebustin, @The Animal,
I agree — it could turn into being hated on both sides of the border by those who see only one layer as portrayed by whatever sound bytes and catchy media headlines.
@All,
In a way it is human nature – for most people, if something does not effect them in a negative manner (or they believe they are not effected in a negative manner), then the tendency is to ignore it. An example is all the Canadians who cross the border on a regular basis to buy gas, bread, school supplies etc. Prices are better there so why not. They just don’t think (or perhaps just don’t care), that it takes money out of the Canadian economy.
This is where we need the Canadian media to start reporting on how FATCA and the cost of compliance will, in fact, effect each and every Canadian, not just those who are or once were ‘U.S. Persons’.
Another thing to cite to the Canadian government re FATCA – the US banks get lots of business serving drug lords, and yet the US is focused on enforcement abroad.
http://www.southernstudies.org/2012/07/mexican-drug-cartels-and-the-us-banking-industry.html
…………….”Mexican drug cartels have sent upwards of $1 trillion to the U.S.
This staggering sum of money has been funneled through U.S.
financial institutions, almost always in violation of U.S. laws, and at
times even with the cooperation of American federal agencies.
In fact, if the Mexican drug cartels were a sovereign nation, they
would qualify to be part of the G-20, ahead of Indonesia (GNP: $845
billion) and behind South Korea (GNP: $1.1 trillion). Yet, this is the
cumulative sum of money that Mexican drug cartels have funneled through
the U.S. economy.
A New York Times story published last month reporting that federal authorities busted a cartel boss accused of laundering $1 million a month pales in comparison to the hundreds of billions of dollars that drug organizations have moved through U.S. banks.
Who cares about a $12,000,000 a year operation when one American
bank was found to have laundered $378,400,000,000 before it was caught?
After federal prosecutors started criminal proceedings against the bank,
it agreed to hand $110 million over to federal authorities, for
allowing banking transactions with proven connections to drug smuggling
operations. And the same bank subsequently paid the government a $50
million fine for failing to monitor cash used to ship 22 tons of
cocaine.
In other words, the bank paid $160 million to make the case go away.
No bank official was ever charged with a crime, and the monies ended up
dispersed throughout the United States.
The bank? Wachovia. The year? 2010.”…………..