Yesterday, the French newspaper, Les Echos (business/finance/economics), published an article about FATCA. The headline gives you a strong clue as to how they feel about it:
Banque : les Etats-Unis imposent leur loi à l’Europe
(Banking: The United-States imposes its law on Europe)
The tone is harsh and and the language is strong. Here are a few translations:
“Adopté aux Etats-Unis en 2010 après l’affaire UBS, le Foreign Account Tax Compliance Act (Fatca) traque littéralement tous les citoyens américains à travers le monde et exerce des moyens de pression si considérables sur les institutions financières.”
(Adopted in the United States in 2010 after the UBS affair, the Foreign Account Tax Compliance Act (Fatca) literally hunts down all the American citizens in the world and uses strong methods to pressure financial institutions…)
“Les banques de tous les pays se mettent en ordre de marche… forcée.”
(The banks in all countries are being set on a forced march.)
“La loi part du principe que tout citoyen américain ou entreprise du pays basé à l’étranger est un fraudeur fiscal potentiel.”
(The law starts with the principal that every American citizen or company based abroad is a potential tax evader.)
“Les banques devront grosso modo adapter leurs systèmes d’information et de reporting dans tous les pays où elles sont présentes afin de détecter leurs clients américains et toutes les opérations faites avec les Etats-Unis.”
(Banks must essentially adapt their information and reporting systems in every country where they are present in order to detect their American clients and all transactions with the United States.)
“En France, le chiffre de 500 millions d’euros de coûts supplémentaires a couru l’an dernier sans être confirmé officiellement.”
(In France the figure of 500 million euros in extra costs [to be compliant] was put out last year without being officially confirmed.)
They go on to quote the French bank La Société Générale which says it has no choice but to comply. They also mention German banks refusing service to their American clients. The agreement (the IGA) is mentioned and they say it is based on reciprocity and will be signed soon. I looked but could find nothing that says where France and the U.S. are in negotiations.
The article starts with a bang and ends with a whimper. My .02.
@DAX
You might be interested in the recent discussion of the so called reciprocity in the FATCA IGAs that starts here on the thread ‘DATCA is Not Dead’. The language of the IGAs as well as IRS Bulletin 2012-20 are important to understand in these contexts.
*Uncle Tell: You are right! If the EU treated FACTA as seriously as they treated Open Skies, where negotiations on international airport access had to be on the EU level, FACTA would surely die.
Christophe. I have an account, and I don’t think I’m as rare as that. I don’t think there are many Americans who have accounts in France with the purpose of dodging taxes, but the reverse is probably not zero, because the American capital market is so huge and so liquid. There are many French who work in the US for a few years, then come back, and keep their account open, for instance, because it’s outside the view of the French authorities. (Again, I report my account..)
If Treasury department is asking in the IGA that other nations to immediately provide information about US-persons and promising reciprocation in the distance future, is it a good fair agreement? It is not a good faith agreement, I feel, since many people in treasury know that they can’t get approval from the congress (especially considering strong banking lobby and potential loss of billions of deposits). I feel, many countries will and should insist on simultaneous reciprocation in the agreement and sign the IGA, but won’t send data until US is ready to reciprocate.