Liberty and justice for all United States persons abroad

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We finally have the draft agenda of the European Parliament’s Economic and Monetary Affairs Committee public hearing on FATCA next Tuesday.

http://www.europarl.europa.eu/document/activities/cont/201305/20130521ATT66354/20130521ATT66354EN.pdf

Unfortunately,  all of the scheduled speakers will almost certain defend FATCA as if their lives depended on it. My sense is there is a real political problem in Europe as more become aware of the IGA terms however, many others with all of Europe’s economic and deficit problems are strongly in favor of cracking down on tax “evasion.” I do know for a fact the reason this hearing is being called is do the protestations of anti FATCA MEPs such as Sophia In’t Veld however the net effect seems to be to have a hearing that at this point is completely dominated by pro FATCA voices. I do expect some tough questions from the likse of Ms In’t Veld that I suspect will cause some real discomfort for the currently scheduled speakers. However,  I expect plenty of softballs from the FATCA sympathizers on the committee. I also expect the IRS/Treasury rep to lie through his death and essentially pray on the lack of knowledge many European politicians have of the US system of government.

One problem and issue is the only organized groups against FATCA other than purely domestic US groups like Center for Freedom and Prosperity are those such as AARO, FAWCO, ACA etc that are volunteer based and relatively small. For whatever its worth I have strongly encouraged my contacts at those orgs to make a formal petition for participation(The current schedule is only a “draft”).  I have not heard a response back at this point.

77 thoughts on “EU Parliament Hearing on FATCA May 28th”

  1. The title refers to “automatic exchange”, but FATCA is anything but bidirectional. Rather it is a unidirectional transfer (FFI —> IRS). If EU really wants an exhange, they will need the courage to break the US Bank Secrecy Act in the same manner FATCA has (attempted).

  2. If memory serves me correctly, the EU is collectively just as guilty for bailing out the banks on the backs of their taxpayers as the US is. Can they afford to have their taxpayers balk at that BS and start voting with their feet? Not really, I think.

    Perhaps that is the reason as to why they seem willing to sign thr IGAs?

  3. Reciprocity is real issue. MEP Sven Giegold who in the past I had fingered as a FATCA sympathizer was strongly implying that if US doesn’t give the EU info on Delaware trusts there will be “no deal.” Of course Obama can only give info to the EU on Delaware trust with the approval of Congress.

    https://twitter.com/sven_giegold

  4. Yes, if the EU thinks it can get reciprocity from the US, then why wouldn’t they sign? I believe they have just as much interest as the US does in setting up a financial Berlin Wall to keep in the money.

  5. mjh49783

    You are correct in the sense that the EU would probably rather have reciprocity than to have FATCA completely crash and burn. However, our friend Jim Jatras tells me the odds of the EU ever getting reciprocity are quite low and sinking lower.

  6. Members of the public aren’t allowed to ask questions or intervene in any way, but what about protest signs?

  9. @Tim

    Yep. I would also have to agree that the EU will likely not get reciprocity for signing FATCA IGAs. But given that the EU is willing to buy into the arguments of the envy specialists just like the US, and screw over its own people, not to mention in the least be willing participants in national origin discrimination against people like us, well, lets just say that I’m damn glad I didn’t leave the USA for Europe!

  10. Unfortunately, “No FATCA without Reciprocity” is not even close to being as catchy at “No Taxation without Representation”.

    Can anyone come up with something decent? A catchy and accurate slogan could be helpful in getting the message out to the general public.

    Just my 2 cents.

  11. @tdott

    But we’re not represented, and that’s the biggest kick in the ass that we get to endure as Americans abroad. But sure, we do get a vote at least. Big whoop! Broken assed two-party system. No real political choices, etc….just….LOL F—ing LOL.

    Am I supposed to write a letter to my senator, too? My voice, my letters, my e-mails, they’re just as drowned out as my vote. Why even bother?

  13. on form d.s. 4079 the questions asked in the first section seem to directed to to relinquishing not renouncing.. if you are not relinquishing should you ansewer these questions any experiences and suggestions would be appreciated

  14. @waring,

    From the Consulate Report Directory (compiled and maintained by pacifica777 at Isaac Brock), link at http://isaacbrocksociety.ca/consulate2/

    You can also read in this document experiences for Renunciations and Relinquishments reported to Isaac Brock; some will mention the forms they had to provide. 4079 is required at some consulates / embassies for renunciation, but for other consulates / embassies 4079 is not required for renunciations. Check the reports for where you will be making your appointment for reports of experiences that may help you in preparing for your appointment.

    Department of State Forms

    These are the forms for renunciation:

    4079
    . Request for determination of loss of citizenship
    . Important for relinquishments, is not strictly required for renunciations (according to the DOS procedure manual) but it seems most consulates ask for it.
    This has four pages of questions, requiring dates; it’s best to fill it out in advance of your consulate meeting.
    http://www.state.gov/documents/organization/97025.pdf

    4080
    . Oath of renunciation
    http://www.state.gov/documents/organization/81606.pdf

    4081
    . Statement of understanding of consequences
    http://www.state.gov/documents/organization/81607.pdf

    4083
    . Certificate of loss of nationality
    http://www.state.gov/documents/organization/81609.pdf

    If you have already relinquished your citizenship (eg. upon obtaining citizenship in another country) and are now applying for a CLN:

    4079
    . Request for determination of loss of citizenship
    . This has four pages of questions, requiring dates; it’s best to fill it out in advance of your consulate meeting.
    http://www.state.gov/documents/organization/97025.pdf

    4081
    . Statement of understanding of consequences
    http://www.state.gov/documents/organization/81607.pdf

    4083
    . Certificate of loss of nationality
    http://www.state.gov/documents/organization/81609.pdf

    Statement
    . Not necessary, but a very good idea to supplement your 4079 with a written statement to show that your relinquishment was intentional and that your post-
    relinquishment conduct has been consistent with relinquishment.

  15. To: sophie.intveld@europarl.europa.eu; cecilia.wikstrom@ep.europa.eu
    Subject: FATCA details for May 28th, Reciprocity is a joke
    Date: Thu, 23 May 2013 20:19:51 +0000

    I provide you some information which you may not have, which helps to show that USA reciprocity in FATCA is a big joke—a joke that will cost the EU banking system dearly, at a time when the EU banking system is already threatened with economic challenges.

    Part 1: FATCA reciprocity is a joke.

    All banks implement expensive software and routines to report EU citizens and residents to USA via their IGA in their government. Funding is by EU bank customers and EU taxpayers.

    Here is the reciprocity statement of what sole promises USA gives, from the FATCA intergovernmental agreement (IGA):

    The United States ACKNOWLEDGES THE NEED to achieve equivalent levels of reciprocal automatic information exchange with [FATCA Partner]. The United States is COMMITTED to further improve transparency and enhance the exchange relationship with [FATCA Partner] by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.

    What promise does this contain that the EU will receive information from USA?

    Is it realized that this commitment is from the US Treasury, of the administrative branch of the US government only?

    Does the EU realize that the IGA is an idea dreamed up by the IRS & the Treasury, and has no legislation support in FATCA’s USA Law 2010 HR 2847 HIRE Act?

    Does the EU understand how a treaty is ratified?

    Does the EU believe that an “Intergovernmental Agreement” is an enforceable treaty?

    Has the US treasury said that this IGA will be brought to the USA congress for ratification?

    Does the EU believe that a 2/3rds majority of the Senate would ratify this?

    Is the EU aware of bill S 887 in the USA Senate to repeal FATCA?

    Is the EU aware of the current publicity surrounding the undesirability of the USA IRS and the public sentiment to eliminate IRS abuses upon its citizens?

    Is the EU aware that FATCA’s creators, Carl Levin and Max Baucus are retiring?

    Is the EU aware that these scandals in USA will likely turn the tide away from their political parties?

    Here is a lawsuit from Texas and Florida, where the USA IRS tried to force US banks to acquire names of foreign depositors

    http://www.bloomberg.com/news/2013-04-18/banker-groups-sue-treasury-irs-over-account-reporting-rule-1-.html

    Does the EU believe that the banking lobbies of the USA will support the escalation of FATCA domestically?

    Is there any other “benefit” to the EU, other than that the blackmail of a 30% penalty is avoided?

    What are the groundrules and constitutional rules of Sweden and the EU, regarding delivery of the most private information of its citizens to a foreign government?

    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 who has not understood how to cancel it
    –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

    Here is how the USA views EU citizens who have grown up never knowing that they were born in the USA: Here is the FATCA related instructions from the USA Internal Revenue Service( IRS), IRS FAQ 52.2 of the Offshore Voluntary Disclosure Program (frivillige rättelse):

    Condition: “Taxpayers who are foreign residents and who were unaware they were U.S. citizens.

    Example 1: The taxpayer was born in the U.S. to parents of foreign citizenship. She grew up in a foreign jurisdiction (Sweden), unaware that she had been born in the U.S. She has a $60,000 account in the foreign jurisdiction. She has never filed U.S. returns or FBARs. She became aware she was a U.S. citizen when she had to get a birth certificate in order to obtain a passport from the foreign jurisdiction (Sweden) where she resides. Unless she decides to opt out, she is entitled to the reduced 5% offshore penalty”

    From:

    http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program-Frequently-Asked-Questions-and-Answers

    With no benefits to EU, and only huge costs to EU, why is the EU not protecting its citizens from a government’s collection agency which is more tyrannical than Eritrea’s?

    What is the benefit of being a citizen of a country in the EU?

    Where should these US persons hide when FATCA is enacted? How big is Anne Frank’s attic?

    Part 2: USA’s purpose is to tax EU citizens

    Here is a list of EU countries for which an American would never send his money, in order to evade taxes:

    Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

    Here is list of EU countries where there 10’s of thousands of EU citizens and residents who live, work, and love, but who are also US persons.

    Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

    Conclusion: USA is not looking for its homeland tax evaders hiding money in the EU, rather USA is out to find EU resident citizens who are also US citizens by any means: birth to a US parent, accidentally born in a US hospital, or someone who has not fully cancelled their US visa (Green card).

    The taxes needed for USA from EU citizens are near zero, but the penalties the USA wants from them are bankrupting. (the greater of 50% of the account value or $100,000 per account per year, retroactive 6 yrs).

    Part 3: Security

    What security protections are being made upon the Collection, storage, and transmittal of bank account numbers, USA Social Security numbers (reference fraud occurring in USA), and private wealth information of its Citizens?

    Given that FATCA data is “indicia” (untried suspicion) of being a US person. WHat is the intended fate of non-US person EU Citizens whose full private information are delivered to a foreign government?

    Is the EU and member countries prepared for lawsuits inside USA and inside EU regarding transfers of private data, in civil Court and in Constitutional Courts?

    Is the EU aware that such lawsuits could be taken against both financial institutions and also EU member governments?

    Hope to see you on Tuesday May 28th.

  16. @ Swedish Citizen
    That’s a very comprehensive e-mail. Well done! You and Victoria have our deepest appreciation for taking the time to attend the May 28th meeting. I hope you can make your concerns heard there somehow even though the “public” part of the meeting seems to mean the public only gets to sit in the no talking seats. There’s always the before time, the break times and the after time to try to get at those who sit in the talking seats. Hope so anyway. Sophia is a pitbull and whether she knows it or not there are a lot of Brockers cheering her on. You’ve given her even more back up info to sink her teeth into. Thank you.

  17. @Swedish Citizen

    Great work demonstrating how the US has the cards stacked in their favour. Could there be yet another card the US has up its sleeve? Last year the House of Representatives passed a bill that would block FATCA reciprocity until US unemployment fell below 6%. It was yet to pass the Senate when Victoria wrote about it on her blog. i don’t know where it went in the end and my searches come up empty. Maybe she knows more.

    http://thefranco-americanflophouse.blogspot.ca/2012/07/fatca-backpedaling-on-reciprocity.html

  18. American Banker: Credit Unions Fear Collateral Damage from FATCA

    THE MONETARY FUTURE
    Credit Unions Fear Collateral Damage from FATCA
    by Jon Matonis

    Last month, I warned that the Foreign Account Tax Compliance Act, an attempt by the U.S. to impose reporting burdens on other countries’ banks, would produce blowback for domestic financial institutions. Credit unions, at least, are worried.
    …

    Cheney went on to emphasize the fear of reciprocation by foreign governments for Washington’s overreaching.

    “CUNA is also concerned that the European Union is considering adopting a ‘European FATCA’ which would regulate U.S. credit unions and banks in the same manner that the United States’ FATCA purports to regulate credit unions and banks in the European Union,” he wrote. “Unless Congress repeals FATCA, we think that it is only a matter of time before the extraterritorial diktats of a European FATCA and other FATCA-inspired foreign laws become additional compliance burdens on U.S. financial institutions.” As the largest credit union advocacy association in the United States, CUNA represents nearly 90% of America’s 7,000 state and federally chartered credit unions and their 96 million members.

    Sen. Paul has cited the destructive effects of the law and questioned its legitimacy as a tool to combat tax evasion, arguing that “FATCA has had the practical effect of forcing [foreign financial institutions] to relinquish any association with American customers, and to avoid direct investment in the United States. Perhaps even more troubling, the implementation of FATCA has allowed the Treasury Department to make independent decisions with respect to the sovereignty of foreign nations and the privacy of United States citizens.”

    CUNA’s support for rolling back FATCA follows a move on March 27 by the World Council of Credit Unions, which represents member-owned cooperative nonprofit lenders in 100 countries. Michael S. Edwards, the council’s vice president and chief counsel, called for full repeal of the law, similarly citing the boomeranging costs of FATCA from foreign institutions to domestic U.S. entities like credit unions.
    …
    Jatras encourages all international firms to get involved, adding that “American and non-U.S. firms that stand to lose millions of dollars each complying with FATCA need to help push the repeal bill through. FATCA repeal needs to be part of any tax reform.”

    With a litany of bipartisan reasons to oppose FATCA, ranging from privacy and sovereignty to U.S. economic competitiveness, it is startling that the legislation has advanced as far as it has. The situation speaks volumes about the opaque process of continually “hiding” the specifics of putting laws into practice in other legislation, resulting in the nearly seven-year implementation timetable.

  19. Ahead of next Tuesday’s committee hearing, it might be a good idea for those of us living in the European Union to send e-mail messages to Ms Mojca KLEVA KEKUŠ, the rapporteur on the fight against tax fraud, tax evasion and tax havens for the EP Committee on Economic and Monetary Affairs. She might need to be enlightened about FATCA’s negative impact on us. From what I’ve seen so far, Sophie In’t Veld seems to be the only one expressing any awareness.

    Ms Kleva’s address: mojca.klevakekus@europarl.europa.eu

  20. I would add that this is especially important for those of us who are dual nationals and consequently vote in Europe, as well as for European green card holders. Keep in mind that a new European Parliament will be elected in May 2014, only a year from now.

  22. Does anyone remember where that 1999 GAO report was that talked about raising revenue by finding all US citizens overseas?

  25. @Swedish Citizen:
    Is this the one you were thinking of?
    http://www.gao.gov/products/GGD-98-106

    Tax Administration:
    Nonfiling Among U.S. Citizens Abroad
    GGD-98-106, May 11, 1998

    or maybe one of these:
    http://www.gao.gov/search?q=us+citizens+abroad&facets=a%3A1%3A{s%3A10%3A%22topic_term%22%3Bs%3A29%3A%22Tax+Policy+and+Administration%22%3B}&search_type=Solr

    You can narrow by topic (ex. taxation) or by Agency (ex. Treasury) or use IRS as a keyword
    I also searched by using US AND citizens AND abroad (or overseas)
    ex. narrowed by Treasury
    http://www.gao.gov/search?q=us+citizens+abroad&facets=a%3A2%3A{s%3A10%3A%22topic_term%22%3Bs%3A29%3A%22Tax+Policy+and+Administration%22%3Bs%3A16%3A%22tx_agency_0_term%22%3Bs%3A26%3A%22Department+of+the+Treasury%22%3B}&search_type=Solr

    Fantastic list of points re FATCA by the way, and also to include that comment by Bubblebustin about the limit to any possible even faux reciprocity being made dependent on the US unemployment rate reaching a specific level. Thanks!

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