A Swedish citizen sent this to me via e-mail:
Here is a actual exchange between a dual citizen and the Swedish parliament. It should definitely show where Sweden is going and gives an indication of how OECD members are officially thinking.
FROM SWEDISH CITIZEN TO (50+ recipents) IN SWEDISH PARLIAMENT (RIKSDAGEN)
Swedish banks are lobbying Sweden to allow USA to demand private data from Swedish banks—-For Swedish banks to spend billions of dollars to satisfy US legal demands upon banks and Sweden.
This law will report the most private financial details of Swedish Citizens, living in Sweden, who unfortunately were born in USA, whose parent is AMerican, or who still has an active US green card.
Sweden is going over to USA during the next few weeks to sign an agreement that breaks all Swedish laws. The agreement is not Bilateral—it gives Sweden nothing—zilch-null
It works like this:
Here is a radio clip about what is happening to Canada Citizens.
The same is happening to Swedish Citizens. Sweden has been talking to the bank lobby–who wants to have the Swedish government break discrimination laws, rather than the banks. Sweden has been talking to USA, who wants to have USA laws enacted in Sweden. Sweden has not had a single discussion with the Swedish citizens who are affected by these actions. Will you help change that?
Are you concerned enough to protect Sweden from foreign government intrusion?
Call me and have a detailed discussion about how to protect Swedish citizens living in Sweden from the laws of foreign countries being enforced inside Sweden.
If you act next week, it will be too late.
FROM POLITISK SEKRETARARE OF A CONTROLLING PARTY TO SWEDISH CITIZEN
We appreciate your concern. However, we do not entirely agree with your reasoning and its implications.
As a state, Sweden expects similar compliance and cooperation from other states. In fact we have an agreement with US in place since the 1980:ies covering a few of the same issues for Swedish citizens (but not with so massive information exchange).
Likewise we are in the process of negotiating or have negotiated similar treaties with several nations or independent territories for the last decade, in an effort to ensure that Swedish citizens that should pay taxes according to Swedish law, do so even when some of their resources are placed in oversea banks.
So how could we reject another nation that makes basically the same claim? We can’t.
There are of course concerns that must be met. Among them are the fact that due consideration must be paid to the integrity of those involved.
But bilateral treaties between nations, is probably the best method to safeguard these concerns. The state is responsible for upholding the laws of the nation. Bank’s aren’t. The state is a much more suitable counterpart in bilateral negotiations, than individual enterprises.
We might have objections to certain particularities in the negotiated treaty (in much the same way that we have had on the SWIFT-treaty, negotiated by the European Union), but we accept the legtimacy of the US position and the necessity of a settlement that will work without undue pressure on the individual banks.
olitisk sekreterare
Folkpartiets riksdagskansli
FROM SWEDISH CITIZEN TO POLITISK SEKRETARARE
Thank you much for your response.
Please understand that the USA is asking for personal information from one nationality. This is discrimination. The information is private. The people whose information is being sent, have”the burden of proof reversed”, ie “guilty til proven innocent.”
The law effects Swedes that do not know that they are “US persons”.
The US treatment of these persons is to punish them for US laws for which they have known nothing about. The punishments range from $10,000 to $100,000 per account per year, retroactive 6-8 years.
Please note that the USA Intergovernmental agreement says basically: we will do the best we can”.
However, the agreement is not a treaty.
The agreement is not authorized by the US law HR2847
A recent House bill (Posey agreement) was passed in the House which specifically will not allow US banks to collect this.
Sweden is forced to spend billions of kronor, however there is NOT a bilateral Exchange.
All in all, I personally have been doing my absolute best to file taxes, whereas this information assumes that I am guilty of the act of being a US person.
I urge you to have further and deeper discussions with the people affected by this—-some of the people to be reported cannot even speak English.
FROM POLITISK SEKRETARARE OF A CONTROLLING PARTY TO SWEDISH CITIZEN
Well, first of all – it is by definition not discimination, if there is a valid legal reason to single out an individual. That an individual owns property, financial instruments or otherwise is obligated to file tax-statements, pay taxes et.c. is certainly a valid legal ground. Nationality (citizenship), permanent right of recidence and so forth are clear markes of that.
Yes, some people may not know this. That is another problem. Generally speaking, a person – even if not the citizen of a country where one does buisness – is obligated to find out what rules apply. Of course it is prudent and wise for a state to seek to spread that information to those concerned. But a lack of knowledge is not, in itself, a valid argument why people should be able to get out of their obligations.
Now, while we generally accept that the US is a democratic society, under the rule of law et.c. these bilateral treaties (I think it is a treaty according to Swedish nomenclature – at least the negotiations have status as treaty-negotiations so far, but the result maybe “downgraded” to a lesser form of agreement) are a means to somewhat abrogate demands that do not conform to a least common denominator, law-wise. I.e. a content that is valid under both jurisdictions.
I do not yet know what the result will be – if there remain discrepansies that is unacceptable for us, we will most likely raise objections. But it isn’t very likely.
The exchange of information about an individual between his or her bank and a representative authority of the state (revenue-service or the like) is enshrined in Swedish law. We have accepted that as the most favourable option, because what we gain in judicial “precision” (i.e. avoiding wrongful lawsuits, taxation error and so forth), compensate for the infringement of individual integrity.
FROM SWEDISH CITIZEN TO POLITISK SEKRETARARE
Thank you for your definitive answer. It looks like the decision has been made and going forth, without ever having fully discussed the effects upon the human beings affected.
Of the 40 US persons I have talked to, zero (ZERO) have known about the requirements to file these papers. About 5 of them haven’t ever really lived in USA. One of them is a financial executive of one of Swedens World-known Corporations. He should have been filing reports of that Corporations bank accounts to the IRS—-against his confidentiality agreement, against the laws of the Swedish borse, and against the laws of Sweden (reference the last portion of the FBAR (Foreign Bank Account Reporting) form. All of these people have Children who have the same problems.
There is no amnesty program in the USA which allows these persons to come into compliance, without real threats of bankrupting fines. The COSTs for accountants and defense lawyers is beyond the means of most Swedish residents.
So, we can conclude that a decision has been taken in Sweden and USA, knowing fully that nearly all of the Swedish Citizens affected will be bankrupted by the USA.
I request confirmation that you and then Sweden fully understand those consequences.
FROM POLITISK SEKRETARARE OF A CONTROLLING PARTY TO SWEDISH CITIZEN
I have given you an answer as to the considerations that we have, in general, concerning this issue. You might not like it, I can respect that. But this is not a discussion of those issues anymore. Now you are extending a plea for individual cases. Folkpartiet cannot change US tax laws, and that is not the issue.
It is always deplorable if individuals are hit hard by new laws or new practice. But the case here, is not about the legality of certain tax claims, but about the exchange of information about tax claims that have an established validity.
FROM SWEDISH CITIZEN TO POLITISK SEKRETARARE
I assume your mandate speaks for all of the Swedish govt, and take it as such.
Yes, 40 of 40 individual cases will end up horribly for Swedish Citizens and residents, living in Sweden, governed by Swedish laws.
And Swedish laws have been decided to be changed, so that Another country’s laws can be applied effectively inside Sweden upon Swedish citizens.
This differs from the way that Eritrean sovereign law was approached, when similar cases arose (only the type of harassment differed, the law applied was similar).
The situation is also quite sad in Switzerland. The national council today accepted FACTA. They said it left a bitter aftertaste; however, that they felt like they had no choice if Switzerland was not to be excluded from the global marketplace. The FATCA agreement now only has to go to the 2 chambers of the national assembly for approval. In the assembly, the politicians against FACTA until now were members from both the conservative Swiss People’s Party and the more liberal Socialist party but for different reasons. The socialist complained about the lack of reciprocity and the conservatives have complained about the infringement on the national sovereignty and for all practical purposed the elimination of Swiss bank secrecy. Switzerland is a small country so it looks like there is nothing stopping or slow down the FACTA train.
@Southerner, you wrote: “The FATCA agreement now only has to go to the 2 chambers of the national assembly for approval”.
Does that mean no referendum? Swiss ctizen don’t have a say on this?
The answer from the Swedish political party gives all of us – in Canada, and elsewhere, very valuable clues to how the governments of our non-US countries of residence (and for many, birth or naturalized non-US citizenship) will rationalize what they have decided to do re signing IGAs – without any input or debate from their citizenry.
We must develop the arguments that were touched on during the FATCA forum in Toronto, and consider how this type of rationale would be forbidden under the terms of our respective domestic human rights laws and constitution and in conflict with our domestic laws and national autonomy. http://isaacbrocksociety.ca/2012/12/31/fatca-fact-finding-forum-part-5-of-9-allison-christians-fatca-and-international-tax-law/ http://isaacbrocksociety.ca/2012/12/28/fatca-fact-finding-forum-part-3-of-9-fatca-privacy-rights-issues-abby-deshman/
Since when do our domestic constitutions and human rights laws allow for a ‘foreign’ country’s (US) law to trump and override our own laws inside sovereign autonomous borders? Can/should a treaty with the US effectively override another country’s own human rights laws and constitution? Can discrimination in result or effect be justified on the basis that all those in the defined class will face the terms of that discrimination equally?
The US reserves to tax any and ALL people they choose to define (however broadly and changeable over time) as ‘taxable’ wherever in the world they might be, and wherever the source and location of their income and assets. That IS NOT the same basis that other countries use to tax. If all countries used the same extraterritorial citizenship-based tax framework as the US, then Sweden would be facing completing and multiple claims on Swedish citizens and residents from ALL the other countries in the world. It is simplistic to say that if Sweden reserves the right to tax, then they must without any nuance, agree to respect, and ENABLE all other countries to tax – without limits or consideration of the actual effects. And, the US tax and financial reporting regime applies to ex-greencard holders living in Sweden, who are neither US citizens, nor US residents. So, how then would the US claim be deemed congruent with Swedish tax practices and views?
The answer from the Swedish politician above, does not address who has first claim on the Swedish income and earnings of those who were born or naturalized dual citizens in Sweden.
It does not address the legality of the US forcing financial account and asset disclosure on the non-US persons holding joint accounts with, or in a co-signatory relationship with the US/dual citizen (ex. spouses, business partners, employers) re FBAR and FATCA.
Both countries claim the right to tax the individual, yet, the Swedish answer begs the question of the BASIS of the US claim that they say they must respect. Since most countries of the world base their claims on actual permanent or significant residence, rather than merely conferred or inherited citizenship, the US is ‘unique’ in demanding tribute from children born in other countries, with no US residence, no US income, and no economic or other relationship with the US. This is NOT what all the other countries in the world do. The US is unique in taxing people based merely on an inherited or acquired citizenship EXTRATERRITORIALLY. I am sure that by now, Swedish and other politicians know this, but it is a convenient excuse for giving in – in exchange for access to US markets.
And discrimination is not only identified on the basis of the discrimination, but on the RESULT of the negative outcomes for the group who is being treated differently. I am surprised that Sweden, who has been viewed as very respected in terms of trying to achieve other kinds of equity in Swedish society, would advance a position that would try to justify discrimination in actual RESULT and effect on a subset of its citizens, based on the enforcement of a ‘foreign’ – i.e. US domestic law within Swedish borders. Equity in result trumps equity in theory as the test of discrimination.
you can bet once Switzerland formally accepts the FATCA, it will be front page news in the US. The propaganda wars continue.
I’m really surprised that Sweden is just rolling over and playing dead with the US. Don’t they respect their own laws?
That the Swedish govt finds the “collateral” damage regrettable but have decided that its simply the price of doing business is not surprising. Or shouldn’t be. I read a great quote by Nietzsche comparing the State to a cold lying monster whose biggest lie is that it – the State – is really the people. The State is our overlord and FATCA is proof that an individual cannot realistically have two overlords and survive the beatings from both.
Dual citizenship is one of those PC things that govts gave into but is more and more proving a terrible idea.
A friend and I wrote to the Minister of Finance, Anders Borg, at the end of 2011 expressing our concerns about FATCA and the effects of US policy on innocent dual citizens in Sweden. We viewed the situation of many Swedish-Americans in Sweden as a ticking time bomb and referred to what was happening in Canada and the actions that had been taken on behalf of affected Canadian citizens by their finance minister. We also encouraged a meeting with the new US ambassador (he had just arrived) to show concern for the 30,000+ US citizens that are in Sweden and how they could be negatively impacted by FATCA and the policies of the IRS. While it was still early on in the game, the response we got discouraged us. It basically gives the same response as you are getting from a different party. It said:
“Thank you for your letter to the Ministry of Finance regarding the situation for American citizens living in Sweden.
Sweden supports the initiative from European Commission to have a dialogue with the United States to find a solution to the problems. At this moment Sweden sees no need of a meeting with the new United States Ambassador.”
What really discouraged us was they ignored the situation of dual nationals. It was like they were saying they were more American than Swedish.
We also tried contacting the major newspapers and had little success with that. The one located in Kungsholmen told us that while it was an awful situation, they felt this was of little interest because such a small population was affected and not the kind of story a morning newspaper covered.
The Dagens Industri was quite responsive and a very good article by Martin Rex appeared on 9 Jan 2012. However, I think most of the reaction to that article was that a lot of business was generated for the consulting firms that implement FATCA as it was a wake up call to the Swedish banks.
The Local, the English language newspaper, has said that they would be interested in hearing from anyone who might be having banking problems in Sweden. So far, there are no stories of this.
While the Bundesrat in Switzerland may say FATCA left a bitter aftertaste, I fear that even that is too much of a reaction to get from the very complacent and accommodating Swedish politicians.
FATCA is hurting citizens in Sweden. We have met with two completely freaked out OVDI/P cases, each of whom have very different stories. Both have suffered major financial damage mostly because they lived a Swedish tax compliant life, which does not always match directly with US tax compliance. Both have almost non-existent ties to the US other than that they were born there.
It is hard to get Swedes to be passionate about acting against FATCA. Even when they hear these disheartening stories, their tendency is to hide and try to avoid any conflict. The government is certainly taking that position.
The world is ruled by money. The threat of being denied access to the US market is what makes every country accept the deal, even if it breaches their own laws.
The bottomline of their banks is more important than their laws or the rights of their citizens. That’s basically what Eveline Widmer-Schlumpf said.
En Francais dans le texte, from this link:
http://www.hebdo.ch/secret-bancaire-laccord-fatca-sera-sign%C3%A9-ces-prochains-jours
“Faute d’un accord, les grandes banques helvétiques mais aussi les plus petites devraient s’acquitter d’une taxe à la source de 30% ou ne plus accepter de clients américains, a rappelé la grande argentière.
La retenue de 30% et le risque probable que les banques étrangères rompent à moyen terme leurs relations d’affaires avec les établissements suisses entraîneraient une exclusion du plus grand marché financier du monde.”
@Chris In Switzerland, a referendum is a possible but not automatic. Someone would have to collect a lot of signatures. If there were a referendum it would come from the conservative SVP because they are the one’s most uncomfortable with the breakdown of individual financial privacy. Everyone here says that once bank secrecy is lifted for every other country, to avoid discrimination it would also have to be lifted for Swiss.
Practically speaking the acceptance of FATCA is the end of Swiss bank secrecy. Switzerland will not be able to fend off the EU after having surrendered to the US.
Just a note, the Folkepartiet itself is not the number one party, but there is a block of 3 or 4 who make up about 49% and take control. The Nya Moderaterna (moderately right) lead this coalition d Folkepartiet have a number of key posts. Fyi, it’s a unique situation, as neither block wants to officially join up with the nationalistic Sverige Democraterna. The actual details could likely be found in Wikipedia.
Sweden is now very organizaed and has some organizations of the worlds most proficient programmers. No doubt, they could use the required standard indicia slopped up in the banks, and could also use their own database with all personal info connected to the person-number (social security number)..
So, all of my 40 friends who have done zero to protest against it will all be reported in April of 2015. Some of them had been hiring $5000 lawyers and lots of them have been campaigning for Obama at the same time. The others are just sitting and waiting happily.
Perhaps tha banks are worried about the US market, but that isn’t what drives the govt. — Sweden is very organized. Everyone likes to say that they like following the rules and that taxes are good for a good society.
There have always been some that have believed that was total b.s. In the glory days, there was a lot more cash transactions and a lot more holidays taken in vacation homes near to banks. But those days are falling away. Nowadays, you buy a pack of gum with a credit card and everything is recorded digitally.
Sweden would be happy to follow the rules (no matter who makes them) and to wish upon a star that they could get their hands on some of the interest and gains that Swedes might have in USA.
And penalties are not so new here—why should they worry about penalties on Americans. Any tax penalty is 40%–if it is truly a non-criminal evasion or if it is just 2 months late. 5 minutes overdue on a parking ticket is $100. If you fight it in court, you will certainly lose and pay the winner’s fees, making your parking ticket $500 (been there, done it). Rules are rules.
p.s. I tried through a contact to get a story into Swedish TV, but it is too easy with FATCA to flood them with too much info—it is hard to boil down. (That one little radio clip above was a good quick tool to get the message across).
Although my contact said she fully understood the sucky situation, her contact was not going to pickup the story.
I’ve also tried the same with the 3 gossip newspapers, and got nowhere. I did talk to one guy on a Saturday and kicked his interest, but when he told the story to his collaborators on Monday, the story would have gotten buried.
This correspondence is absolutely bone chilling. I now have horrid visions of Flaherty taking his talking points from this and throwing back the exact same irrational arguments at anyone trying to communicate with him AFTER the decision to totally capitulate to the USA is made (if it hasn’t already been made in the secret negotiations). 🙁
Looks like our Plan A in on the rocks so we are headed into Plan B and we’d better start thinking about a Plan C too. As our alphabet of plans progresses any semblance of what we thought would be a normal retirement slips silently yet surely into the brink. 🙁
People will be reported if they broadcasted they are U.S. person. I suggest everyone keeps their mouth shut and never travel to the U.S.
Renunciation or relinquishment of US citizenship is the only way to end the curse of citizenship-based taxation.
Relying on another country for protection from the most powerful country on the planet is naive at best.
@Small, Wilderness, My approach has been from the beginning to fight this openly and with my real name (Peter Dunn). Here is the blog post I wrote to explain my reasons for this approach. I’ve also said publicly that I will never do an FBAR.
http://righteousinvestor.com/2011/11/15/pillaging-one-person-at-a-time-why-im-coming-out-in-the-open-with-my-fight-against-the-irs/
@Mark Twain – When it comes to offshore accounts, Swedish tax policy is more enlightened than you state. The US could certainly learn from it. The current policy for offshore voluntary disclosure (frivillige rättelse) is that whoever comes in of their own free will must only pay the amount they owe, plus a really low interest rate (Riksbanken) – no questions asked. No penalty is asserted. One does not need an ombudsman, or lawyer. Apparently, the fact that a person comes in on their own means they will be treated with respect. They need only supply a spreadsheet of what they think they owe and pay up. The process is not quick, but it does not take years like it does in OVDI. There have been lots of articles in the newspapers about the billions of kronor this type of program has generated. The penalty of 40% of the tax owed only kicks in if you are approached first by the Swedish Tax Agency.
I know Swedes who have been assessed a 40% tax penalty for an alleged offense. In most cases they were able to speak with an agent and resolve the problem. However I know of one British woman whose undeclared British accounts they found out about and she was pretty miserable.
I agree totally with you about the parking fines. They are outrageous and ubiquitous.
So, Treasury will have another notch on their FATCA IGA gun soon, it seems. Wonder when they will update their web site. It is probably late like their ‘Name and Shame’ list. http://1.usa.gov/ZawsRC
http://www.skatteverket.se/privat/skatter/betalafatillbaka/frivilligrattelseavutlandskainkomster.4.1a098b721295c544e1f800040912.html
Frivillig rättelse av utländska inkomster
What I was referring to was that the 40% can apply to a return which is 2 months late—I spoke to an Englishman who got hit with that when he first moved here. His wife is an American—wait til he finds out about this. Doesn’t matter that she is in a nursing home.
Ok. I sent the same material to GT-expressen and Aftenbladet. I doubt they would let it disturb their coffeebreak.
Sweden tax treaty (the model follows in most countries)
http://www.irs.gov/Businesses/International-Businesses/Sweden—Tax-Treaty-Documents
1. The Contracting States undertake to lend assistance and support to each other in the collection of the taxes to which this Convention applies, together with interest, costs, and additions to such taxes.
2. In the case of applications for enforcement of taxes, revenue claims of each of the Contracting States which have bean finally determined may be accepted for enforcement by the other Contracting State and may be collected in that State in accordance with the laws applicable to the enforcement and collection of its own taxes
ok, I took the article and supporting info to the Swedish Green Party and the left party today. THey are the smaller parties of the minority block. These locals understood my words, as have others before, and promised to send the info on the international leaders of the party.
I ran into a protest in town, and caught TV4 and Swedish TV journalists, gave them an earfull and my phone number.
From there, I went to GT-Expressen newspaper and raised the eyebrows of a reporter. His last comment was “you’ll stand up for a Picture with your name on it, no?” “uhhhhhhh”
@Swedish Citzen;
Would it help any to send the Green Party of Canada official position (see links below) to the Swedish Green Party ?
I gather that there are some kind of international connections between Greens in different countries? http://en.wikipedia.org/wiki/Green_party Ex. http://www.globalgreens.org/index.php http://www.globalgreens.info/ggn_homepage.html
Would it help also to point out that the Canadian Civil Liberties Association is also now taking a position on FATCA? http://ccla.org/2012/12/04/ccla-registers-privacy-concerns-over-ongoing-canada-u-s-information-exchange-negotiations/
http://www.greenparty.ca/statement/2013-01-28/backgrounder-canada-and-fatca
http://www.greenparty.ca/media-release/2013-01-28/irs-tax-collection-evasion-us-or-invasion-canada
I don’t know if this will help, but it might assist them if they know that there is opposition to FATCA in Canada, from fellow Greens.
@bucky the badger—I was in the Green Party local office for the 2nd time. The Green Party of Canada position is what got me inside the door. I gave them copies of the Canada release and of this Exchange. The person I talked to stated she would send the info to the top international person in the party. We see what happens.
In all cases, 2nd hand info doesn’t work. It works when you have access to speak face-to-face with the decision maker. It’s all about finding formal and informal decision makers and having the opportunity to present reality to that person ne-on-one.
Alternatively, to bundle $500,000 to their Campaign.
@swedish citizen; interesting to see how that plays out. If the Canadian and Swedish Greens are interested, then perhaps it will spread to the Greens in other countries – like Germany, or other countries where they are strong. I must say that I am disappointed that other political parties in Canada have not made an official party stance against FATCA, as the Green Party has. This issue is so important to my family and myself that it may well be a deciding factor in any future voting I do, and which party we support.
Canada has not given in yet, and if this Conservative party sells us to the US, (and is abetted by the apathy or silent assent of the opposition parties) the > 1 million duals and their households are not likely to forget. And, when our banks start asking for our identification – to make us prove our citizenship, I doubt that account holders will forget and forgive. The banks don’t seem to understand here that if we’re married to non-US spouses, and have non-US kids, they’ll lose the business of an entire household, not just the one US person. Even if this is eventually to be an IGA, the banks are the ones who lobbied the government to go that route. They sold us out rather than to mount an effective opposition to FATCA. They never published any full page ad against it, or tried to rally their account holders or to educate them. It is all very much behind the scenes – in order NOT to alert their account holders. And if they do have info on their sites, it is all of the ‘resistance is futile’ approach – like it’s a done deal, and the customers must just comply.
The Green Party is very idealistic. Agree or disagree with their platform, they believe in what they stand for. And up to know, they have been the only party in Canada with the decency to stick up for Canadians unfortunate enough to be cursed with US indicia.
I never paid much attention to the Greens before, but I certainly will now.