Pirate Party calls FATCA and Qualified Intermediary program “blackmail”.
At 30.5 Christopher (Chris) Carlson made a short presentation on FATCA on our pirate pulse event. If you could not be there and you are interested in the subject, we hereby provide for you (PDF) its films available.
Direct candidate in WK 42
Also has a follow Christian Szymanek, Direct candidate in WK 42, summarized the issue (Editor’s note: The following translation was commissioned by the author, and made by Dr. C. N. Carlson):
FATCA – America’s Taxes
The land of unlimited possibilities has come up with a new instrument for enforcing its interests in Europe. FATCA – the Foreign Account Tax Compliance Act – compels foreign banks to report customer data to the IRS.
This measure purports to combat tax evasion and actually sounds plausible at first glance. The problems show up when it comes to how the law actually works.
Beginning several years ago, the US has levied a 30% tax on US stocks and bonds held by foreign banks. In order to ransom themselves from this tax European banks must sign an agreement turning them into weirdly named “qualified intermediaries”. As part of this agreement, the banks are obliged to report customer financial data to the US. This is done via the afore-mentioned intermediary: a bank staffer working with a catalogue of secret criteria hands over certain kinds of financial data to unknown third parties, in this case the IRS.
In 2009, the German bank lobby’s brief and futile protest against this extortion ended. As of last year, most German banks had become “qualified intermediaries” and are now conducting the data hunt for Americans among their customers.
So far, so good: all very secretive and using dubious methods, but perhaps you’re thinking, “let them check what their citizens have in German accounts. It’s not my problem, I’m not an American.” Well …
But the search criteria are not limited to US citizens, but to “US persons”. By 2015 the banks must identify all US persons and report their financial data to the US.
By “US person” the USA means not only US citizens and Green Card holders, but also persons born in the US regardless of their nationality. Former exchange students are affected as well as real estate owners, people with business in the US and others.
That’s right: “others”. The US reserves to itself the right to change the definition of “US persons” at any time and for any (or no) reason. It suffices for instance to have stayed there for more than 30 days in a row.
If you’re unwilling to make a declaration to your bank on whether or not you might be a “US person” – or if you refuse to permit your bank to report on you to the IRS, then your bank is obliged to close your account or to refuse to open one or you. You also have to pay an obligatory 30% tax on all dividends and interest income, just to make it easier for the customer to decide to submit. The American FATCA law and American privacy protection standards are thus to apply in Germany – in terms of international law a very dubious proposition. And what does the Federal government do? On May 13th, 2013 we signed the FATCA treaty with the US.
The embassy Facebook page says: Ambassador Murphy signed a treaty to combat tax evasion (FATCA) with representatives of the German Federal government today. Both countries commit to an automatic mutual exchange of information. The treaty will clamp down on the possibility of utilizing foreign financial institutions and services to evade taxes. Together we are sending a signal on behalf of more transparency and tax honesty.
The term “reporting German financial institution” occurs 20 times in the treaty text, the term “reporting US financial institution” occurs only twice, both times only in the term definition, not in the text body. Obviously someone is trying to suggest that this treaty is in the interest of both partners. In fact, a “reporting US financial institution” is postulated which then has no further function in the treaty.
Thus, one cannot say there is a “mutual” exchange, since – as I understand it – the data transfer is strictly one way, nor is the term “transparency” appropriate in the context of this strange mish-mash of secrecy and qualified intermediaries.
This treaty is the opposite of a fair deal: All the disadvantages are on the German side and all the advantages are on the US side. The distinction between German bank customers as so-called US persons and non-US persons, whereby the US persons are to be spied upon and invidiously penalized, appears to be a clear violation of the Constitutional commandment of equal treatment.
The FATCA treaty is one of the last official acts of the US ambassador in Berlin Philip D. Murphy, a former long-time investment banker for Goldman Sachs, the bank which helped Greece hide the truth about its budget problems. Former Goldman Sachs staffers hold a frighteningly large number of leadership positions in Europe and the US. ECB Head Mario Draghi is one of them, as is also Henry Paulson, the former Treasury Secretary and bailer-out of banks during the Bush Administration.
Just imagine for a moment what Goldman Sachs’ investors could do with an unlimited amount of highly confidential European bank data.
For these reasons I call on the German government not to ratify the FATCA treaty.
Pirate Party direct candidate for the German Federal Diet, city of Hannover / 2nd electoral district
(Post originally published at Isaac Brock Society on June 4, 2013)
Good one. I had been thinking about them.
I sent them an email. Couldn’t get the webpage to believe I am not spam
From what I’ve just read in Wikipedia, the Pirate Party didn’t take any seats in the last federal election in 2009, but had support from 18% of first time male voters. They’re gaining in popularity since then, and received enough votes in the 2011 Berlin state election to overcome the 5% threshold to secure representation, when they won 15/141 seats. It will be interesting to see how much more popular they’ve become in Germany’s next federal election this September.
They obviously get it…
“The agreement, which comes into existence by this Agreement, is only to the detriment of the German side, and only for the benefit of the U.S.”
Been a member for the past 2 years. Haven’t been very active, though.