Here:
http://site.d66.nl/intveld/document/fatca/f=/vj90hk8obskl.pdf
Does the Commission consider that this condition of Swedbank is related to the recently adopted US law FATCA, the ongoing IGAs on it and the legal uncertainty for the FFI as to the extraterritorial application of FATCA?
Is the Commission aware that the extraterritorial effect of FATCA could lead to banks on the territory of the EU refusing to take US clients?
Does the Commission consider this practice as a violation of the general principle of equal treatment and non-discrimination, or any provision of the EU treaties?
Does the Commission consider that the definition of’ US person’ could also include EU citizens, which would mean that EU citizens could be affected directly by US law on EU soil?
I wonder who it was that provided her with the information about Swedbank?
Sophie is my hero!!!!!!!!!!
Well done Swedish Citizen!
If any other EU resident becomes aware of an FFI operating in the EU with such an explicit statement in their terms and conditions, can I suggest they write to Sophie? I will send her the terms and conditions for TD Direct Investing in the UK (http://www.tddirectinvesting.co.uk/special-pages/terms/~/media/uk/pdf/a4_terms-of-service-may-2011.ashx) which causes you to confirm you are not a US person before opening an account (17.3) and who can close your account if they have reason to believe you are a US person by virtue of your payment method or any information from any source (23.3).
@swedishcitizen
många tack! (much thanks) and I will keep an eye out for any similar iniatives from banks in my EU country.
Quick update on this: there is a lot of information aimed at banks in EU countries available via your national office PriceWaterhouseCooper.
Quick update on this:
there is a lot of information available via your national office PriceWaterhouseCooper.
Google their firm and then write in your country and you will (probably) be able to find the latest FATCA updates regarding implementation in your particular EU country. The information is intended for banks and tax advisors but is relatively easy to understand for an IBS person.
She picked on Swedbank, but numerous other banks have similar restrictions.
ING Direct in France, for example writes all over their web site, that they won’t open any saving, investment or life insurance accouts for US persons.
It is in their general conditions: (Article 40, page 6)
http://www.ingdirect.fr/data/pdf/leo/conditions-generales.pdf
Also here for life insurance products:
http://www.ingdirect.fr/ing-direct/faq/assurance-vie-souscription.jsp
“Attention : Une personne de nationalité américaine ou résidant aux Etats-Unis ou encore répondant à la définition de « US person » au sens de la réglementation américaine ne pourra souscrire à un contrat d’assurance vie par l’intermédiaire d’ING Direct.”
A translation would be: “Warning: A person with American citizenship, or living in the US, or being a ‘US person’ according to US law will not be able to open a life insurance contract with ING direct”.
The first part of the sentence is all over the web site:
“Warning: A person with American citizenship, or living in the US, or being a US person according to US law will not…”
Their condition for not accepting a client is
– American (regardless of residence)
– Any citizenship, living in the US
– US person (regardless of residence).
How can the banks get away with such open discrimination. I don’t undertstand that, especially in the case of a US person, who might be a citizen of the country where they operate. I think in that case, it must not be applied to the letter, and many people will just lie and say they’re not US person – that 3rd category of people someone has been talking about: people who should be affected by FATCA, but are lucky enough to go through the net.
I haven’t contacted Mrs In’t Veld regarding ING Direct.
One of us could volunteer to collect all banks pasted in here. I could find time on the weekend, for example.
we should ask for her to confirm receipt of letter.
This would eliminate burdening her with work in reading so many submissions.
If no receipt received, then it could be free for all to send as they will.
I like Swedish Citizen’s idea. A central repository of FFIs who, as part of their terms and conditions, state that they will not do business with a US person. The most useful examples would be EU FFIs who have blanket bans across all products on doing business with US persons but any FFI operating in any EU country could go on the list.
Bizarrely, ING Direct operating in the UK did not have a blanket ban on US persons although the UK internet banking division was recently sold to Barclays.
I would also volunteer my time for this.
Meeting with our RBC Dominion representative tomorrow. He’ll tell us what’s coming down the pipe. Or at least he’d better.
@Edelweiss, as possible grist for your mill, Alliance Trust Savings in the UK refuses SIPP accounts to US persons:
http://www.alliancetrustsavings.co.uk/forms-documents/application-forms/SIPPF103-04-13_sipp_app_booklet.pdf
“I am not a U.S. person (please tick) … If you cannot give this declaration please do not continue with this application. …”
They will also refuse to open Junior ISA accounts where either the child or the parent are US persons:
http://www.alliancetrustsavings.co.uk/pdf/junior-isa/junior_isa_application.pdf
“Birth certificate (Please tick to confirm you have enclosed the child’s birth certificate)
The child is not a US person. (Please tick) … If you cannot give this declaration, please do not continue with this application. …
I am not a US person. (Please tick) … If you cannot give this declaration, please do not continue with this application. …”
Alliance Trust’s definition of “US person” defers to FATCA 🙁
http://www.alliancetrustsavings.co.uk/glossary/#u
I thought IGAs contained text that were forbidding discrimination by the banks.
@swedishcitizen and others:
Here is what I found as a disclaimer under the investment information in English for the largest bank in Denmark, Danske Bank (links included):
Restrictions
Any information or opinions contained herein are not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use is not authorised or would be unlawful and, specifically, are not intended for distribution to, or use by, any “US Person” within the meaning of the United States Securities Act of 1933, as amended.
Restrictions
Any information or opinions contained herein are not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use is not authorised or would be unlawful and, specifically, are not intended for distribution to, or use by, any “US Person” within the meaning of the United States Securities Act of 1933, as amended.
http://www.danskeinvest.com/
http://www.danskeinvest.com/plsql/dot_com.popup?p_text=DOT_DISCLAIM
@swedishcitizen and others
This is dated 2013 and apparently only applies to US persons resident in the US
At the bottom of the Nordea investment info (2nd largest bank in Denmark):
“10. Important information for customers resident in the U.S
The material on this site is not directed at and is not intended for United States residents and residents of other countries who are temporarily present in the United States, and any partnership, corporation, or entity organized or existing under the laws of the United States of America or of any state, territory, or possession thereof, or any estate or trust which is subject to United States tax regulations and is not an offer to provide, or a solicitation of any offer to buy or sell, products or services in the United States of America. No United States residents or residents of other countries who are temporarily present in the United States may purchase any products or services of Nordea or Nordea Investment Funds, and neither Nordea nor Nordea Investment Funds will accept an application to purchase products or services from any such person”.
http://www.nordea.dk/Om+Nordea/Vilkår+for+brug+af+nordeadk/37092.html
@Watcher
Alliance Trust is both an investment trust (Alliance Trust plc) and also an asset manager (Alliance Trust Savings). Alliance Trust Savings also won’t let a US person open an ISA. This is mind-boggling considering an ISA is a FATCA exempt product in the UK IGA and for which, therefore, no reporting is required.
@Chris
There is an anti-discrimination clause contained in the IGAs but it only relates to FFIs that wish to register as deemed compliant under the local bank exception. That exception is very narrow. For instance, amongst other things, you can only operate in one country (within the EU if you are within the EU), you must have 98% of your deposits from residents of your country (or within the EU if you are within the EU) and you can not solicit business outside your own country (or outside the EU). The 98% of deposits within your country test could be very difficult to meet. The 98% threshold applies to all accounts ie business and personal. So, if you do business banking you may have to cease doing business with overseas subsidiaries of current clients. If you do personal banking you may have to cease doing business with expats or retired persons living outside the country.
Note also that the local bank exception which contains the anti-discrimination clause only relates to, umm, banks and not any other type of FFI eg insurance, investments, pensions etc.
Incentives are a powerful tool but being a deemed compliant bank under the local bank exception doesn’t get you much of anything. You still have to adopt FATCA and report on US person accounts outside your country of operation. The only potential saving is not having to report on the US person accounts inside your country of operation. But that has to be small change if you have to go through the entire FATCA adoption procedure but then just not send the info. In exchange for qualifying for this “exception” you must agree not to discriminate against US persons.
Or you could just drop all of your US person clients and certify you don’t have any. It’s pretty obvious to me which option is easier and less risky and I would expect very few banks to even try to qualify for this “exception”.
So, every non-bank FFI is free to discriminate. Every bank is free to discriminate unless they are seeking to qualify for the local bank “exception.” I’m afraid this is the entirely obvious and utterly predictable result of making a “US person” the most expensive and least desirable customer on earth to deal with and who brings unimaginable liability if you haven’t dealt with one of them properly.
Thanks, @Edelweiss for the explanation.
Still, it seems that discrimination would violate local laws and I am surprised that banks resort to that, knowing they have armys of lawyers.
Canada might be the best place to be if you need to be outside of the US. At least, you’re protected by the Charter and still can have a bank account and invest in investments of your choice (even if it might be a pain with US tax laws) – but at least it’s possible.
I also think that with the move towards a global GACTA, there is going to be less incentives for FFIs to discriminate against Americans – or they will start discriminating against anything foreign.
This war against tax evasion is definitely not good for globalization.
I delegate to Edelweiss, as I have an additional approach halfway penned.
I assume Norway and Switzerland are EES and are not of direct interest to her. Better to use the banks from the most innocent-sounding countries (Lux & Schweiz & Lichtenstein banks listed may bring up instant resistance)
Some forms of discrimination are legal in certain jurisdictions. Example: Swiss anti-discrimination law makes no reference to Nationality as a form of impermissible discrimination.
LETS TRY THE FINANCIAL SPYING ASPECT—-see where that one goes
Regeringen FATCA negotiations enforce Financial Spy activities upon Sweden & EU
To: Finance Department of Sweden: Anders Borg, Susanne Ackum,
Cc: Tax ledamot: Leif Jakobsson (S), Henrik von Sydow (M), Andrén, Gunnar (FP)Folkpartiet , Pertoft, Mats (MP)Miljöpartiet (Green), Alfsson, Thoralf (SD)Sverigedemokraterna, Ceballos, Bodil (MP)Miljöpartiet, Olle SCHMIDT Folkpartiet, Sophia in ‘t VELD (European Parliament)
cc: Dagens Industri, Aftonbladet, GT Expressen, Sydsvenskan, Göteborgs Posten
I understand that the one advantage of a FATCA Inter-Governmental Agreement id the benefit that the US threat of punishing Swedish banks with a 30% with-holding fee will not become actual.
However, with the IGA agreement, Swedish banks still incur enormous costs in complying with USA laws.
The next disadvantage is that Sweden will ensure that its dual citizens perform financial espionage upon Swedish persons and institutions. Below is a list of financial spy activities that are required of the US persons living in Sweden. Each of the required espionage activities must be performed by US persons in Sweden, under the penalty structure listed. These penalties are to be collected by Sweden according to the tax treaty regarding collections of USA taxes in Sweden. With FATCA, US PERSONS IN SWEDEN ARE REQUIRED TO PERFORM FINANCIAL ESPIONAGE and report all Swedish confidential information to the IRS. Swedish local law is NO EXCUSE.
FBAR: Penalty: $10,000 per violation (per account per year?, retroactive 6 yrs) if proven that it is not willful. Willful: the greater of $100,000 or 50 percent of the balance in the account
http://www.irs.gov/file_source/pub/irs-pdf/f90221.pdf
8938, Penalty: $10,000.
http://www.irs.gov/pub/irs-pdf/f8938.pdf
http://www.irs.gov/pub/irs-pdf/i8938.pdf
Form 8621, Penalty: $10,000
http://www.irs.gov/pub/irs-pdf/f8621.pdf
Form 3520, Penalty: greater of $10,000 or: 35% of the gross value
http://apps.irs.gov/app/picklist/list/formsPublications.html?value=3520&criteria=formNumber
Form 3520a: Penalty: $10,000 or 5% of the gross value. Also criminal
The private financial information of all family members (those who share joint accounts with the US person) will be reported to the IRS, even if they are full Swedish persons and have no US personhood. See section 3 of the FBAR foreign “joint accounts”. Also, trusts which are set up by US persons for elderly Swedish in-laws or any children must be reported.
The private financial information of a Swedish volunteer organization must be reported to the IRS by any US person who may have volunteered to help pay the bills. See sec 4
The private financial information of a Swedish corporation must be reported to the IRS by any officer or person signing corporate checks.
Effect of Swedish jurisdiction laws: The fact that a Swedish jurisdiction would impose a civil or criminal penalty on you if you disclose the required information is not reasonable cause (for not reporting to USA).
Form 8865 –Swedish partners: Penalty: $10,000 failure to file penalty per year per person
http://apps.irs.gov/app/picklist/list/formsPublications.html?value=8865&criteria=formNumber
Form 5471 –a 10% or more shareholder in a Swedish corporation. Penalty: · $10,000
http://www.irs.gov/pub/irs-pdf/i5471.pdf
A US person living in Sweden is required to report the private financial information of the Swedish Company to the IRS, Regardless that the company is majority owned by full-Swedish persons.
Form 926, Penalties: 10% of the property transfer, up to $100,000 although unlimited if to “intentional disregard.”
A US person in Sweden must report loans made to a corporation in Sweden to the IRS, even if owned by full-Swedes.
Don’t forget the a US person is
–A Swedish citizen, born in USA of Swedish parents, while living temporarily in USA
–A Swedish citizen, born in Sweden, with one US parent, who has lived his entire life in Sweden
–A Swedish citizen, not a US citizen at all, who has a green card which he has not paid $450 to USA to renounce
–A Swedish citizen, living in USA, who needs a bank account to receive rent payments upon his rented house while on expatriate work assignment for Volvo in USA
In order to renounce US personhood, one must pay $450 and sign documents under perjury that one has fulfilled all tax obligations for the past 5 years—ie, for a Swedish person to renounce his old USA green card (visa), he must attest that he has performed the above financial spy tasks.
Are you ready for Swedish banks to begin forcing US persons to perform financial espionage in Sweden? Are you fully aware that you are negotiating to REQUIRE FINANCIAL SPYING upon your fully Swedish citizens and full Swedish businesses and volunteer organizations? Are you still getting ready to sign up for the FATCA Intergovernmental Agreement?
you’re welcome to copy-paste to letters to Canadian officials and anywhere else you reside
Some of this (not available to US persons) stuff predates FATCA, although they have gotten much more detailed and apparently are being enforced lately . I opened a couple of accounts, one at a bank and one at an investment company. a few years ago. Both of them had sections on the forms asking about whether I was a “US person” I don’t recall the detail, and I don’t know if it would have prevented me opening the account, but when I made even the slightest question about what was that, the answer was very much a “don’t pay any attention to that” sort of answer. Not only did they not ask, they didn’t want to know, but it was definitely on the form.
I also noticed a large bold faced section in a prospectus of a Canadian investment fund I once owned, about 5 years ago, which said very definitely that it was not intended to be offered or sold to a “US person”. Not that anybody asked or seemed to care when I bought it. I believe it had something to do with US securities regulation. They either never thought about the fact that “US persons” might live somewhere else, or decided they should control the financial lives of their “persons” all over the world.
I’m sure FATCA and IGA’s and all the publicity lately is making people pay more attention to enforcement. One can only hope that all this enforcement and publicity will make it clear how ludicrous the whole financial control of “US persons” thing is and get it changed in the long run
Unless a security is SEC registered, the prospectus will contain a disclaimer that it is not SEC registered and is therefore not for sale in or into the US. This doesn’t stop US persons or US investors from purchasing the security.
I suspect going forward banks aren’t going to tell people to ignore the section about whether you are a US person. There is enormous liability attached to that now.
Good angle Swedish Citizen. Emphasizing the amount of reporting on the accounts and assets of the NON-US persons who will lose their financial privacy to the US, and whatever the IRS and Treasury do with it (no real controls under BSA and Patriot Act), mean that there will be zero recourse if they are victims of identity theft and fraud. How will our home countries defend their single citizenship persons who suffer loss of security and data because of what the IRS forces their spouses, parents, grandparents, business partners, volunteers, employees, etc. to report? The IRS cannot ensure the security of the data it already collects INSIDE the US. How then will it protect that of all of us globally, when even more date is being collected, shared and stored – with no third party controls, and no accountability to our home country or even ourselves?
FATCA is all about dusting off stupid old rules and putting them on the shelf, and enforcing them with cannons.
those Swedbank rules can now be put to good use in screwing people according to new FATCA rules. Whereas before the banks ignored it, they now have to blatantly not follow it in order to accept US persons. I have had a teller emphatically say that I was a citizen when they signed me up (she knew about the rules), even though it is impossible to get rid of a US accent.