As promised (and thanks to Peter who resolved my login problems) here is the piece I wrote for the Franco-American Flophouse after we got back from the Brussels meeting. We learned so much, we met so many interesting people who were genuinely interested in hearing what we had to say, and we got some very good advice about next steps. This trip was a group effort. Tim was the one who tipped us off that the meeting was actually going to happen. One official organization (FAWCO) wrote a letter before the meeting that Ms. in’t Veld read beforehand and clearly used during her talk. I covered the event for ACA and Ellen of AARO was there with business cards and lobbying experience. Another person in our group had invaluable experience with the EP. And hats off to M. who modestly said that he was representing just “regular folks” – what he did during and after the meeting was inspired. What he did gave me courage. Yes, mes amis, “Il nous faut de l’audace, encore de l’audace, toujours de l’audace…”
Here is Part I of the video of the EU FATCA public hearing that was held in Brussels last Tuesday. Part II is here. Many thanks to Tim who put it up on YouTube. The sound is not always perfect and sometimes it moves from those speaking to the interpreters, but the essentials talks are there. Transcripts of some of the speeches are being posted over at Isaac Brock in this thread by Just Me. Also see Lucy Laederich’s (FAWCO U.S. Liaison and AARO President) comments on the meeting and read her letter to MEP Sophie in’t Veld here.
There were reactions to yesterday’s post about some of the events around our participation. I think we are all genuinely confused by what organizations like the OECD and the EU mean by “public.” For us mere mortals that word says to us that we, the public and the eggs being broken in the making of policy, are welcome to attend and hear what is being said about things that concern us. Well, that is clearly a misunderstanding on our part. For the OECD it was, “Yes, you can attend if there is space once everyone else (the bankers and bureaucrats) has a seat.” For EP security it was, “The meeting is public but you have to be invited in order to access the building.”
Yes, there was pre-registration process, but this was not mentioned in the draft agenda that was published nor was it clarified in the calls we made to confirm the meeting time, date and place. We were very fortunate to have someone there who could help us. Not everyone did and we have a confirmed report of an AARO person who came and was turned away.
About the member of our group who had a chilling close encounter with someone during the meeting, I would like to make it very clear that this gentleman, who held up his passports and had a sign next to his seat, was not being disruptive, nor was he asking to get up and make a speech. Furthermore, he is an EU citizen, this issue is of direct concern to him, and these were his representatives in that meeting. There was no reason (and I should know because I was sitting right next to him) for someone to come over and get in his face.
These kinds of things could make one very paranoid. They certainly lend credence to charges of “policy laundering” – a term that means policy made in secret outside of the open, transparent democratic process. Are they afraid of what “the people” will say on this issue? Perhaps they think we aren’t capable of understanding the complexities around information exchange, FATCA and the fight against tax evasion. Looks like some of them have decided to do our thinking for us. And when the public is finally made aware of what has been done – and they will be once the search in the EU for the pesky U.S Persons who are not necessarily U.S citizens begins – will FATCA and an automatic system of information system be presented as a fait accompli for the good of us all?
The EP meeting resembled the OECD meeting in another respect as well – lots of discussion about the importance of fighting tax evasion, the “nuts and bolts” of implementation, and speakers falling over themselves to prove that they are “cooperating” by revealing their own proposals for their own systems. The most interesting speaker, I thought, was the gentleman from Action Aid who pointed out quite rightly that such systems and the information they contain must be made readily available to developing countries. He’s right. If such systems exist, then the Latin American, African and Asian governments should be able to access the information they want about their citizens in Europe and North America. I personally doubt that this is what the proponents of such systems in developed countries had in mind, but it would be hypocritical of them to deny access to the poorer sending countries of many international migrants (and their children) who have found themselves a home in more developed countries. I’m sure Eritrea which has a diaspora tax like the U.S., would be deeply grateful for help tracking down their citizens outside the country in order to get them to pay up.
That is a possible impact on global migrants which is a worthy topic but not the focus of this public meeting. It was very startling to see that the impact of information exchange systems on people who are EU citizens was dismissed as being unimportant. MEP Sophie in’t Veld tried to refocus the discussion with limited success. She asked about the duals and the Accidentals (those who are not aware of their status as U.S. citizens). The reply was that member states should be responsible for protecting their rights. Did the person who responded really think this was a satisfactory answer? Is he aware of the scope of the problem? This was a moment where I really wanted to leap out of my seat to ask further questions. This is what I would have said:
My neighbor who lives in an adjacent apartment building here in France told me that she was born in Texas, USA. Her parents were in the U.S. for a short time and they (and she) returned to France when she was an infant. She did not grow up in the U.S., she has never returned to the U.S., and she does not speak English.
Is it up to her local French bank to explain to her that she is a U.S. citizen? Can that bank legally deny her services (access to a checking or savings account, a retirement account or an “assurance vie” or even pull her mortgage) because she is a U.S. person? Or will she be required to waive her EU privacy rights in her own country in order to retain access to banking services which she needs in order to lead a normal life?
What would happen if she was either turned in by someone wishing to collect the IRS bounty on U.S. tax evaders, or her name came up on the list sent by the French government to the American government? How would France and the EU respond if the American government decided that she indeed was a “tax evader” and went after her for American taxes?
Is the EU aware that if she wishes to renounce her U.S. citizenship, once she knows she is one, that she may be asked to pay a penalty of 5% even if she was completely unaware of the ramifications of having been born in the U.S. much less that she might be considered a citizen?
EU citizens in this case, be they duals or accidental U.S.persons, need answers to these questions as do EU citizen spouses of American citizens who have a right to know how this will impact them – will they be considered “guilty by association” and see their private data shooting off to the U.S. or their banks accounts closed, even though they are not U.S. citizens, Green Card holders or U.S. taxpayers?
These are THE questions that regular people, EU citizens and their families, are asking right now. This forum did not address them adequately. The reply that this was a matter for member states is a non-answer. It’s not only ducking the question, it’s almost a slap in the face to those whose lives will be seriously impacted.
MEP Sophie in’t Veld expressed it very well when she said that the question of whether or not to tackle tax evasion has already been decided. The answer is a resounding “yes” and there is a broad consensus on this. The MEP’s might be very surprised to learn that many of us who have questions about FATCA and its implementation in the EU don’t have a problem with the basic premise that states can go after people who illegally remove their money from a country with the express purpose of avoiding that country’s tax laws.
The issue on the table right now is how to do it. What are the unintended and very destructive consequences of the proposed systems of automatic information exchange on EU citizens and their families? I humbly suggest that if they were brought to light, perhaps they could be mitigated.
What we need is a real public forum where these questions can be asked, answered and possible solutions discussed. We spoke to some people after the meeting and they were very surprised by what we had to say. They had no idea of the scope of the problems FATCA implementation might pose for regular EU citizens.
The pro-FATCA MEPs seem to be seizing the day and using FATCA to do for Europe what Europe can’t do it for itself. Fair enough. What is not acceptable is that the only concerns they seem willing to raise publicly is how much it will cost financial institutions and access problems for developing countries.
And the cost to their own citizens? If they can’t raise those questions and get direct answers from their representatives in a truly public forum, then everything I’ve heard about the EU “democracy deficit” is, alas, true.
@Victoria & Tim, at the going rate of things, Switzerland might become very noisy and difficult or even unwise to ignore. The latest news is titled:
Little banks pay US bill – The Lex USA is twisting the fundamental sense of justice upside down. In the tax conflict with the USA, the little people are getting hanged while the big ones are allowed to walk away.
The article comments got locked after a flood of 90 comments with 80 pending. One of the comments writes:
America and the EU are obviously so heavily addicted to their crazed witch hunt, that they forgot the little people who are being harmed in the process.
seeing the video, it says that the member countries are responsible to ensure citizen rights. Time to send the transcripts to contacts in country.
USP’s abroad don’t have a diaspora tax in the same sense that Eritreans do, as it’s not exclusive to its diaspora and is applied uniformly to all Americans everywhere. The problem is that in its uniformity there’s little or no consideration for specific circumstances. The tax treaties are woefully inadequate to provide relief to us and are slow to respond to changes that negatively effect our tax positions. It’s no surprise that homelanders believe that taxing us the same in the same way is somehow more fair than if we weren’t. These people are a lost cause, imo. My feeling is that the term ‘diaspora tax’ would be more alarming to non-Americans as they probably couldn’t imagine being subject to the same. That’s enough to make me I like it (and for the life of me can’t think of anything better). 🙂
@Swedish Citizen: Seeing the video, it says that the member countries are responsible to ensure citizen rights. Time to send the transcripts to contacts in country.
I have been pressing this line with my MP here in the UK for nearly two years now. This week I received a letter from David Gauke, UK Exchequer Secretary to the Treasury that states:
“…FATCA applies to US citizens with holding accounts overseas, as the US taxation system taxes on a worldwide basis, on the principle of citizenship rather than residency. FATCA reporting of accounts therefore applies to UK residents but only where they are also US citizens. It is a matter for the US as to how they tax US citizens.”
…followed by blah blah reciprocal blah blah helps fight international tax evasion blah blah UK’s G8 presidency blah blah blah.
Translation — UK treasury to dual UK/US nationals: drop dead.
This is probably the fifth or sixth time I have pushed this point. The UK govt has not only refused to accept it, but (outstanding!) has repeatedly refused to even acknowledge that duals and accidentals will be harmed by FATCA. Shameful and disgusting.
Same o same o in Sweden , where the response is that the Americans need to know the rules when they are doing their business in Sweden.
Then there are the accidentals, the green card holders, unwitting spouses, unwitting business partners. Throw yourself (dual) out of the discussion in further communications.
UK is complicit, because they also have an interest in crushing opposition and keeping the islands for usage by the world for investment.
Then Pomperipossa decided to go out on the highways and byways to beg for enough money to buy an ever so small crowbar. Shake in your boots, wise men, she thought, increase the nightly security around your treasure chests! 5 000 I must have one way or another! If you can steal without scruples, so can I!
@Watcher, I’m sorry to hear that the UK doesn’t have the guts to stand up and defend its own citizens. How sad. 🙁
If it was Eritrea in question, then the UK would be smashing the Eritrea government weakling with a sledge hammer. Yet, when the US does the same, UK runs away from its citizens in fear and hides while hoping that nobody will notice. Sadly, many other governments are no different.
Your political outreach is commendable. But UK citizens may need to take to law.
The UK FATCA IGA entrenches discrimination based upon national origin: a UK citizen born by happenstance in the US now has different rights than a UK citizen born by happenstance in Canada, Jamaica, or anywhere else.
The prominent Canadian constitutional law expert Peter Hogg has already written an excellent opinion latter based on the inherent national origin discrimination issue. It’s linked in this Green Party article, which is also an excellent resource:
I assume that there is UK equivalent to Canada’s Charter – maybe its the Equality act?
Also, I would expect there is nothing in UK law that defines US citizenship or makes exceptions for such.
In Canada, another leading rights lawyer is interested in the issue, but without an IGA – or any other overt action – there is not yet any harm to claim a tort. He is basically on stand-by.
However, it is my understanding that in the UK, banks are discriminating against US-born UK citizens right now. So there are grounds – and your letter from is a “smoking gun” as well.
Suggest reaching out to whichever firm there makes its name in human rights cases. Take the most egregious example: a British couple give premature birth to a child while vacationing in Florida. They register their child as a British citizen and return to London. Now, their child is subject to economic discrimination under FATCA, even though the child is a British citizen with no US economic nexus.
What does Mayor of London Boris Johnson think of this? He was born in the US “accidentally”.
Also the press? The Daily Mail ran a vigorous campaign against US extra-jurisdictional over-reach in its defense of Gary McKinnon. Maybe the same journalists would make this their cause?
Keep up the good work!
Thank you for your note below.
As you may be aware there are 10 categories of equality groups which always should be considered here, namely: Racial Group, Gender, Transsexual/ Transgender, Disability, Carers, Age, Sexual Orientation, Religion or Belief, Marital Status/ Civil Partnership, Political Opinion (NI only). The policy does not impact disproportionately on these groups.
However you make an interesting point that the specifics of this policy make for further protected groups to be considered here. An updated Tax Information and Impact Note (TIIN) is due to be published alongside the final Regulations and the points you raise will be taken into account when compiling that assessment.
Policy & Technical Adviser|Financial Products & Services|CTIAA CT and Business Income Tax|HM Revenue & Customs,100 Parliament Street, London SW1A 2BQ.
Can you elaborate on what Mr. White is referencing when he cites protected classes? It does not correspond with the information from the government’s official website (https://www.gov.uk/discrimination-your-rights/types-of-discrimination) in that it omits national origin. Are they saying that national origin is not a protected characteristic from a tax perspective?
Additional in-depth comments on the EU Parlaiment FATCA hearing here, that were too long for this post…
My husband and I just paid tax professional fees in excess of $1300 to remit a mere $200 in ‘extraterritorial tribute’ as dictated to us by the homeland.
Something for the homelanders: when the cost of something far exceeds its benefits, that ‘something’ loses value. They should know that it’s the USG itself that needs to take full responsibility for cheapening US citizenship, and to stop blaming the victims of these masochistic policies: their own citizens.
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My UK husband and I will have paid $9k approx >20% of our annual net takehome pay.. in tax professional fees to remit $0 in ‘extraterritorial tribute’ as dictated to us by the homeland…………….before my renunciation to come this year to free us from the CBLF (Citizenship Based Life Control)
homelanders: the cost of being USP abroad far exceeds its benefits,= something’ loses value.
please ………..know that it’s the USG itself that needs to take full responsibility for cheapening US citizenship, such that renunciations are soaring.
I and my husband love America…………… it is Obama’s “givermint” we fear ….
It’s very distressing isn’t it, when the US seems to be a runaway train that is carrying freedom away with it? It seems more likely to me that NO ONE in particular is at the controls.
Your situation, like mine is unsustainable.
Correction: $1300 for $20 in US tax for 2012 here.
I spent a bit less than $10 this time for US tax year 2012, for postage and telephone calls, down from about $80 or so last year. On 8854, I calculated that my net slave worth is around -60’000 dollars. So, if I am defined as being a “covered expatriate” and taxed at 30% of my worth of -60’000, then the US government will send me a check for $18’000, right?
@SwissPinoy, wow, only $10, you did great! How did you manage that? Even the cost of tax software is more than that! 🙂
After renouncing, you have to file a final return, right? You must feel so free. What is the irony here 🙂
@Chris, I’ve been fighting with online filing for about 10 years. Sometimes, I had to fake an income of $1 or enter a fake US address just so that it would allow me to electronically submit the data to the IRS. This year, I didn’t do that since, from what I saw, none of the free-filers support form 8854 or 1040NR. Thus, I did the US citizenship tax stuff with the online software and this time printed it out instead of e-filing. Then, I did the 1040NR and 8854 manually to the best of my ability and snail mailed the paperwork off to the IRS. I made a mistake in my last post, though. The cost of snail mail the actually closer to $15. The 1040 stuff was starting to become too complicated for me and would only get worse in the future, so yes, I feel very free! I’m very happy that I’ll now have more time to do more important things like improving my job skills and planning for the future. I’ll probably have to continue filing 1040NR for some years into the future, but if I filled it out correctly, then it is certainly much less complicated than being a US citizen.
@SwissPinoy, why would you have to file 1040NR for some years into the future. I thought you had to do it only if you spend enough time in the US.
@Chris, it is because I got a mortgage for a rental property in Florida last year and thus have US-based income to report to the IRS as a non-resident alien. At least, that’s how I understand it and that is how the IRS explained it to me. 🙂
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I am putting this comment up on multiple threads so as many subscribers see it.
I think we should be targeting the Delaware delegation regarding FATCA IGA reciprocity
I am tweeting them all this morning as a start, with Stacks comments on reciprocity…
Here is the first of many I will do…
Here are all their websites… and I will put a comment on there too..
In case you lost it, here is a link to the transcript of Robert Stacks comments..
and here were the actual words…
And finally on reciprocity, we would simply point out that under our IGAs that are reciprocal, the IRS agrees to exchange information on interest, dividends and other income that is already collect, which is substantial and in some cases more extensive than what has to be, uh, reported under FATCA. The US recognizes the importance of reaching equivalent levels of exchange, uh, under ‘our law’, that we are getting from other jurisdictions. And the administration has included in its budget proposal a provision that would permit U.S. Financial Institutions to make such equivalent exchanges. Under the U.S. political system, uh, different from some Parliamentary systems, we need to work that through Congress but we are um, we are committed to doing that. Once we’ve done that, to go to the question of beneficial ownership in Delaware, once we have equivalent levels of exchange, we would expect our own financial institutions would be required to look through entities and report on individuals just as non U.S. institutions are required to do under our IGA
Also we need to merge NSA and IRS data mining in peoples mind NSA + IRS = NSAIRS
Finally, work on showing how misplaced trust is in our officials that are “protecting” us, just using their own public statements.
Is it hot in here, or am I just lying? Director of NSA Clapper denials http://www.thedailyshow.com/watch/mon-june-10-2013/good-news–you-re-not-paranoid—nsa-oversight … @TheDailyShow @BeirutCalling @SophieintVeld
MEP Sophie in’t Veld has just won an important victory for transparency re the SWIFT agreement;
Here is part of what was at stake re SWIFT http://rt.com/news/nsa-eu-snowden-terrorism-financial-321/
Perhaps this will pave the way for her to obtain the documents she requested from the EU re their negotiations and correspondence with the US about FATCA. The documents she had obtained originally, after a lengthy battle were mostly so redacted that they were not at all ‘transparent’.
“..In ‘t Veld has another two cases before the European Ombudsman on openness of government. One case is about a Europol document regarding the implementation of the SWIFT agreement. The other case is about access to documents of the European Commission concerning the automatic exchange of bank data under the U.S. Foreign Account Tax Compliance Act (FACTA) which aims to avoid tax evasion.” http://www.pcworld.idg.com.au/article/549206/eu_court_orders_more_transparency_over_us-eu_terrorist_finance_tracking_program/