As previously reported here, the Caymanian Compass recently conducted an online poll which asked the question: Should Cayman agree to the US’s tax-collection “FATCA” program? Nearly 58% of respondents declared “No”.
Responding to such a clear rejection of FATCA, Gonzales Jalles of Cayman Finance subsequently published an article which neatly sums-up the conflicting feelings within lucid members of the legal and finance communities worldwide – and just how little it takes to soothe their tortured souls. Mr. Jalles begins his tale thusly:
Almost 58% of voters in a recent poll suggested Cayman should reject FATCA. Don’t get me wrong, my stomach says the same, but I’m going to try to explain why we cannot.
***
If the Cayman Islands Government and the banks wanted to escape FATCA, they would need to stop using the US dollar all together, and we would need to create a new currency system where our currency is not pegged to the dollar. Given the UK and Europe are going the same way, we could not peg it to those currencies either. Therefore, we would need a floating currency, which will automatically mean the complete disappearance of our international financial industry that represents over 50% of our GDP and government revenue.
***
If you still think the Cayman Islands Government and local institutions should have said “no”, I give up. You should move to Cuba, probably the only country in the world that might remain completely out of it.
Lucky Cuba. Driving Detroit museum-pieces forever seems like a small price to pay for avoiding FATCA.
Jalles then goes on to deliver the most misleading and pointless FATCA analogy I’ve heard this year:
Let’s say the police catch you speeding and driving under the influence. You are going to pay a fine and be riding a bike for a while. Do you accept it or do you refuse to pay the fine and keep driving, making things worse for yourself?
Apparently refusing to bow to FATCA is the equivalent of both speeding AND driving under the influence – who knew?
Finally, Mr. Jalles concludes with this passionate confession:
Maybe a few lawyers and accountants like FATCA as they will see more business, but most of us don’t. It’s like a hurricane heading straight at us — ignoring it is not an option, we need to accept it and get ready.
In other words, what’s left of my soul says this is bad, but not bad enough to try to fight it so might as well make some money out of it like everyone else and forget about all that collateral damage stuff. Those people are screwed anyway so why even bother?
And that is today’s lesson in how FATCA capitulation works – think locally, act globally.
Expect numerous bravura repeat performances in Canada any day now as the equally tortured souls at Finance and the CBA peddle their toxic IGA to Mansbridge while crocodile tears flow for the cameras.
Hoping that the Canadian Government will force the issue of Master Nationality and Dominant Nationality with FATCA.
A Canadian Citizen in Canada is /must be treated solely as Canadian. There is no such thing as dual nationality when you are in the country of your nationality. I cringe when I hear someone use the term dual as its rather schizophrenic.
Why does the USofA demand that a dual enter on a US Passport? It is so you can not claim that you are anything else.
This would throw long term US permanent Canadian residents under the bus but can we hope for anything more?
The upshot is that such a provision would benefit duals worldwide under the existing IGA language.
Surely every country is sovereign with respect to its own citizens in that respective nation? That is all we want.
Smaller economic nations should break from FATCA and the US dollar and move to Bitcoin. Ultimately I would prefer to see all nations move to Bitcoin and scrap the US dollar. The anonymity of Bitcoin would also destroy the IRS, FATCA and everything else -that would be highly entertaining to watch.
@pukekonz
Whether eventually displaced by Bitcoin or something else, the US reserve currency’s days are surely numbered.
Today’s Neue Zürcher Zeitung has an article on FATCA (translated):
“Monster U.S. Law
The Trouble with Fatca
Today, 05:30
Hansueli Schöli
The US monster law Fatca, with which the Americans are in fact imposing automatic delivery of financial customer data on the rest of the world, is causing enormous administrative expenses in Switzerland as well as in other countries. This concerns not only the banks. In Switzerland also displeasure was heard recently of its treatment of lawyers, trustees, independent asset managers and trust companies. Currently, there is still some uncertainty about who will fall under various circumstances under the Fatca regime. Traditional business models could be suddenly questioned. For instance, lawyers temporarily hold customer funds in collective accounts, registered in the name of the lawyer. Whether such lawyers are subject to Fatca is unclear, according to participants. If only one of for example 50 or 100 collective account customers is a U.S. person, this could trigger reporting requirements. There is similar ambiguity Trustees and independent asset managers have accounts available that are not in customer names. At some banks, collective accounts are no longer particularly welcome because of the uncertainties with regard to Fatca.
The clarifications requested by the Swiss to the US tax authority IRS are waiting right now. The IRS is apparently swimming over its head and has twice postponed the introduction of Fatca, most recently to early July 2014. Another postponement cannot be totally ruled out, although the US authorities can hardly afford such an embarrassment. It is clear: if each of the over 200 countries in the world would impose a Fatca-like law on each other, the financial sector would sink into administrative chaos. But the United States superpower claims the right for special rules. Unfortunately the Europeans failed to stand together to prevent the US dictate or at least to demand reciprocity to the same extent.”
http://www.nzz.ch/wirtschaft/kommentare/der-aerger-mit-fatca-1.18211234
thanks to Patricia for this post:
FATCA – adoption of extraterritorial law in Switzerland
Sovereignty of Switzerland and other countries violated to a high degree
Interview with National Councillor Lukas Reimann, Switzerland
http://www.currentconcerns.ch/index.php?id=2584