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.
@WhiteKat, earlier on IBS we tossed this up and down, and one I liked was “involuntary US indentured servant” or “US tax serf” today I thought “US deemed vassal” or just US vassal might be apt. I wanted to get in the involuntary aspect, US assumption of ownership of our persons and fruits of our labours, as well as the fact that it is the US who is doing the defining unilaterally – without regard to our wellbeing or our human rights. Also the ‘vassal’ appealed to me because it is feudal, the serfs had no choice, it was not even a pretense of equality or democracy etc. It was ownership by the ‘lord’ and bound to his land. Except that usually those powers were not global in scope and sway.
A diaspora (from Greek διασπορά, “scattering, dispersion”)[1] is “the movement, migration, or scattering of people away from an established homeland”[2] or “people dispersed by whatever cause to more than one location”,[3] or “people settled far from their ancestral homelands”.[2]
Where do ‘accidental Americans’ and green-card holders fit into the definition? We’re talking about something more encompassing than just a ‘diaspora’ or ‘expat’ tax. All my ancestors are from Canada (and back a couple generations from UK). I have not moved away from the US homeland as it was never my homeland or the homeland of my ancestors.
@Swiss Pony… Regarding your comment about Local Banks…..
There has been an addition to IGA annexes in regards to this issue that bears noting. I have posted about it in the FATCA thread, and picked it up from Allison Christians…
Here is here comment in a Note: that drew my attention.
I don’t have time to expound on why this new conventionality on Local banks, but it appears to me to be the back door way of assuring U.S. Citizens are identified by what ever EU data sharing happenings, and to pressure them to join up, or become fully compliant with the FATCA IGA.
@Badger…
What about ‘chattel’ ? and taxes / penalties being “tribute” as in Roman times. 🙂
@WhiteKat, I thought of saying “slave” too, but the EnglishForum.ch recently butchered me for saying similar. Some took it literally. 🙁
“Diaspora tax” puts America at the same level with Eritrea:
http://blogs.wsj.com/washwire/2012/05/18/tax-history-why-u-s-pursues-citizens-overseas/
I really love this article!
http://awate.com/eritrean-regime-2-dues-neither-mandatory-nor-an-income-tax/
To borrow a phrase from the neocons, I would call this particular manifestation of US hegemony — full-spectrum diaspora dominance. It isn’t just about the taxes that the USA demands from its diaspora; it’s about the complicated system of reporting all the tiny details of one’s financial life to the all-seeing, form-obsessed, super-critical IRS under threat of draconian penalties for any foot fault.
BEWARE and be prepared for COMPLICATIONS AHEAD if you …
get married to a non-US citizen
have children stamped “Made in Canada” yet “Property of the USA”
open a bank account
close a bank account
transfer funds between bank accounts
acquire PFIC type investments
plan for your retirement
plan for your child’s education
plan for your disabled child’s future
sell your primary residence
inherit money
gift money
start a business
enter into a joint business venture
hold signing authority over a company account
volunteer to act as treasurer for a local charity
engage a less than expert tax accountant or lawyer
renounce your US citizenship without perfect 1040s and FBARs
renounce your US citizenship and exceed the 8854 thresholds
die without planning for possible US tax consequences to your family
Badger would do a much better job of this list but I’m just trying to say that if you are deemed to be part of the US diaspora you must tread extremely carefully through life because Sir IRS is watching you, Sir IRS is judging you, Sir IRS will penalize you and Sir IRS will keep changing the rules faster than you can keep track of them.
BTW, I like the “policy laundering” phrase too. Thanks Victoria for your presence at the EU meeting and your excellent analysis of it.
Re labels:
The audience is Homelands and people who have not been directly affected by this.
Imagine their perspective they have not spent two years on this blog.
They won’t know the word “disapora” so I wouldn’t use it.
If the word “tax” is used in the label, we lose. Our purpose is to make it clear this is not about tax of any kind. It’s about life control that is “extreme abuse” at best and “slavery” at worst.
I wrote all 8 MEPs for London about FATCA and, rather discouragingly, didn’t receive a single acknowledgement of my email. I also wrote to Liberty (http://www.liberty-human-rights.org.uk/index.php) who responded by saying that FATCA was primarily a tax issue and that they didn’t have expertise in tax.
I’ve written them again this time focusing on my “findings” from research I did on the 30 Best UK Online Stockbrokers (http://the-international-investor.com/comparison-tables/cheapest-uk-stock-brokers) and how 9 out of 28 will not take on US citizens as clients. I posted the results in here (http://isaacbrocksociety.ca/2013/04/22/new-questions-from-mep-sophia-int-veld-on-fatca/).
Liberty seem to occupy a nice intersection of human/civil rights and data privacy/anti-snooping. Hopefully focusing more heavily on the tangible discrimination element will yield a better result.
@Edelweiss
Thats precisely why we can’t label any of this as a tax issue.
It seems to me that someone should consider approaching ACLU. After all they represent the civil liberties of Americans, which should include all citizens.
They have divisions covering:
1- Criminal Law Reform — the FBAR penalties and VD options are all related to this.
2- Human Rights – Data protection / data privacy are based on provisions made in human rights legislation; also is it not a human right to do banking both in US and outside – both of which are being denied due to various factors discussed on this forum.
3- Immigrants’ Rights – Is that not what many US Persons are – albeit immigrants (from America)?
4- Racial Justice – Since “national origin discrimination” is not recognized as unjust, maybe something to add here?
5- Voting Rights – taxation without representation. What rights if your voice is diluted across 50 states.
http://www.aclu.org
@aysee
“3- Immigrants’ Rights – Is that not what many US Persons are – albeit immigrants (from America)?”
This even concerns millions of immigrants TO America who kept their home account open prior to immigrating to the US and who are non compliant. Given the number of them (40+ millions), I wouldn’t be surprised if the number of non compliant immigrants wouldn’t be higher than the number of non compliant Americans living abroad.
I wonder what their fate is going to be when FATCA reporting starts, the banks do their due diligence and start reporting them to the IRS. They’re actually much more “exposed” than Americans abroad since they live in the US.
New story about Germany signing an IGA. Look who the think is the target!
The deal is part of a move by the U.S. government in the past three years to tighten up on reporting requirements of financial assets abroad belonging to Americans living overseas, as well as U.S. nationals residing domestically with foreign accounts.
JUST ME’s story is from USA today. This is extremely significant.
@Just Me, that phrasing “…belonging to Americans living overseas..” must be challenged at every possible opportunity, because many of us are duals. We are not first and foremost Americans, but citizens and legal residents of the non-US countries where we live. As in the EP FATCA hearing the other day, it discomfits the EU and other countries who are considering signing an IGA when confronted with the issue of duals and the issue of the joint account holders who are NOT and have never been US taxable persons. That is why the US and FATCanatics prefer to ignore it and pretend otherwise. We have rights where we live, and though some speakers at that event preferred to gloss over Sophie In’t Veld’s points, EU citizens and residents have rights where they live, which are independent of US laws. There is nothing that says that in rest of the globe, if someone has more than one citizenship, the US status always trumps.
We are entitled to enjoy the same rights and protections that all our fellows have in the non-US countries where we live. There is nothing in the Charter or Canadian constitution that says that in Canada, all those who also have US status have waived their rights.
The phrases: “…belonging to Americans living overseas..” and “This is an important step on the path to a united war against tax evasion,” could suggest that if americans living abroad do not put their full support behind FATCA, that they are then the enemy who this “war” is being fought against.
Yet, the focus of Americans living abroad is to not be targetted or harmed in this “war”.
Any Chance that European Council President, Herman van Rompuy, will compensate all the innocent Europeans who have been harmed by his war?
Look at the video. The effect upon Eu citizens was not “ignored”. The first response from the chairman about data protection not being their mandate was manufactured in advance. He visibly choked upon the answer.
In the final exchanges, the chairman again choked on his words as he specifically composed the answer so as to not answer Sophie’s question.
There is a man with a clear American accent at the entrance to the Parliament, seen 4 seconds into the video. He looks like a skinny John McCain. You can also see him talking to the head table after Sophie’s last exchanges, immediately after speaking to the gentleman who had raised his passports and when he had believed that that person had wanted to speak.
That man had full access to the floor of the EU parliament. He spoke socially with delegates, out loud, while standing in the MEP area, during the time that other delegates were speaking. When not engaged, he stood in the aisle with arms crossed, beside his seat, and surveyed intently the discussions that were taking place. He often visited the head table and whispered something to the 2 men farthest to stage right, as various discussion points arose.
Swedish Citizen-
Just to explain who is who. The guy presiding over the hearing was vice chairman of the ECON committee. A link to his bio is here.
http://www.europarl.europa.eu/committees/en/econ/members.html#menuzone
He was claiming that issue of data protection is in the jurisdiction of “another” committee called LIBE. Well guess who is the vice chairperson of the LIBE.
http://www.europarl.europa.eu/committees/en/libe/members.html#menuzone
Swedish citizen
Can you give me the minutes and seconds of when the skinny John McCain goes to the head of the table?
1:17:21. I could be mistaken, he could be delivering him his lunchbox and giving him a peck on the cheek.
Sophie spoke at 1:16, regarding EU citizens. He went directly to the head table, you can see activity left of the chairman at 1:17:21.
There were other incidences, although I didn’t notice them on the video.
The German cabinet has approved a FATCA IGA. It needs to be ratified by the German Parliament. Sadly, Germany is once again implementing legislation that will impose economic discrimination against certain German citizens or permanent residents, based upon their national origin.
From an article in USA TODAY:
“”Deutsche Bank has turned me down twice for brokerage accounts in the past year, and my 16-year-old daughter’s college savings account was closed,” said Genevieve Besser, who has lived in Germany for decades with her German husband and daughters. She says she has no access to her husband’s German retirement account, because if she did, the bank would close it. Meanwhile, she owes no taxes to the U.S. “It feels like we are being persecuted,” she added.”
http://www.usatoday.com/story/news/2013/05/30/germany-to-share-bank-data-with-us/2373913/
It makes cynical sense for Germany to support FATCA. Germany competes with the US in export markets, and FATCA makes it difficult for American business people to live abroad, maintain business relationships, and participate in global partnerships and joint ventures.
However if any German decides to fight this violation of their human rights,
they could invoke the specter of the Nuremberg Laws.
The German IGA announcement may deserve its own post.
He is first seen at 0:32, scratching his head (looking for something to control)