I wonder when the arses that are leading the various nations of the world will stand up to the United States. For one, the Canadian government has claimed that they are powerless to change US law, and so they are working on an IGA to sell out Canadian citizens to the IRS. Why don’t they invoke international law? Because they don’t have the balls, and until our leaders each get a pair, they are not worthy of our support. The law in question is the Master Nationality Rule. Here is an excerpt from a blog which shows that both FATCA and citizenship-based taxation are illegal according to international law (emphasis mine):
While nationality laws can be rather straight forward to those who lived in their native countries and never emigrated it can be confusing to those whose families had emigrated to different places over the generation or in a few cases those who marry people from different countries.
What many are unaware of is that there is something under International treaties called The Master Nationality Rule. It is listed under Article 4 of The Hague Convention on Certain Questions Relating to the Conflict of Nationality Laws of 1930. In terms of practical effect, it means that when a citizen is in the country of one of his two or more nationalities, that country has the right to treat that person as if he or she were solely a citizen or national of that country. This includes the right to impose military service obligations, require the person to enter and or exit the country using the country’s documentations, or to require an exit permit or other restrictions to leave the country. If any of the above is an issue there is little if anything the consulate of the person’s other country of citizenship can do as the Master Nationality Rule states that “a State may not afford diplomatic protection to one of its nationals against a state whose nationality such person also possesses.” The UK Home Office explains this rule as “the practical effect of this Article is that where a person is a national of, for example, two States (A and B), and is in the territory of State A, then State B has no right to claim that person as its national or to intervene on that person’s behalf.
Essentially what this means is that the United States may only ask other nations to kindly apply FATCA to US citizens who are resident in the US. Furthermore, the US may not “protect” its citizens abroad who have a second nationality, and therefore, they do not have the right to tax them–i.e., this is the basis for the illegality of citizenship-based taxation. So e.g., a Canadian living in Canada is only Canadian according to the Master Nationality Rule. For the Canadian government to discriminate against so-called US persons living in Canada would be a violation of the Canadian Charter of Rights article 15 as well, so that capitulation to FATCA would violate both international law and Canadian law. This means that Canada was right to send the Eritrean diplomats away from the country for imposing citizenship-based taxation on Eritrean expats living in Canada. And Canada would be right to tell the Yanks to take a hike. But our leadership, unfortunately, does not have the balls to stand up to the Americans. We need them to invoke international law and we need them to stand up to this bully now. The current waffling and weak posturing of the Canadian government has already caused serious damage to Canadian citizens.
Finally, for those smart lawyerish people out there that say international law has no validity in the United States: Stuff that view where the sun doesn’t shine! When running for president, Obama promised that he would honour international law, but he has done the opposite. So international law is an American ideal to which they give lip-service, but their actual policies, like FATCA, require generous spritzing of Poopourri. International law is a pillar of global peace. Under international law, nations learn to get along, and it is a significant instrument for the protection and honour of the sovereignty of nations. Disrespect for international law leads to war. If the US wants to avoid war with every nation in the world, then it must relent from this evil course of action. But already, FATCA is an economic war game that the US is playing. How long will it be before the US begins to threaten to use its military might including its nuclear arsenal against the peaceful nations of the world which at one time, like Canada and Britain, were its allies?
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I think we all agree on the fact that FATCA breaks laws everywhere. The idea that Obama knows of it’s problems and refuses to do anything leads us to wonder why. Well, Fatca is in his country’s favor. The master nationality rule is something that can likely be used against the Canadian government’s decision to sign a deal to protect the banks(IGA). There is a huge movement mounting on this and the more we learn, the more I think this will lead to war plain and simple. The world already does not trust the US anymore, this will add fuel to the fire.
Sorry for the length of this comment, but I want get these thoughts in one place. Petros is absolutely correct that the time has come to send the U.S. home where they can worship their FBAR Museum, PFIC Memorial and House of FATCA.
Thanks for this extremely important post. For a supporting perspective of the principle that dual citizens have a right to be treated SOLELY as a citizen of the country of residence see the following post:
which is really an interesting comment/analysis by a leading lawyer in this field. The comment includes:
The legality of U.S. citizenship-based taxation needs to be considered/understood from (at least) perspectives:
1. U.S. Law
See the series of posts culminating in:
The current practice of U.S. citizenship-based taxation (or what they call it) may in fact be in violation of the U.S. constitution itself.
2. International Law
There are at least two reasons for this:
A. The reason you give in your best – the right to be treated as solely nationals of the country they reside in; but
B. The simple truth is that citizenship- based taxation is now being used (fueled by FATCA) as a mechanism for the U.S. to impose a tax (force other countries to pay tribute) to the U.S. simply because a country allows a U.S. citizen to reside there.
See for example:
The general principle:
and to understand the PFIC assault in more detail:
To put it very simply:
Through FATCA, the U.S. is:
1. Attempting to force other countries to identify U.S. persons (at their expense); and then
2. Force the country to pay a penalty by turning that person over to the U.S.
Why is this NOT understood by these countries contemplating IGAs? The answer is most probably that they really don’t understand what U.S. citizenship-based taxation actually is.
For the consequences of all this see:
This is from the – “U.S. Citizenship Based Taxation: Unique or Outrageous” – post that generated so much discussion.
3. Citizenship-based taxation form the perspective of the home county (example Canada)
The issue is whether (regardless of the effect to the law) that the law of country A can apply in Country B.
For example: Can an FBAR violation that takes place in Canada be punishable under U.S. law? This issue is to be resolved according to principles of both Canadian and International law and NOT U.S. law!
The time has come for the rest of the world to, ask the U.S. to leave it’s extra-territorial laws (including taxation) home.
Thank god for persons like you and so many generous others here who have the ability to analyze and make a crystal clear case that US Citizenship-Based Taxation, especially with FATCA (but even without), is WRONG.
All my not so educated mind and soul know is that US Citizenship-Based Taxation is IMMORAL, ENSLAVING, PUNITIVE, TERRORISM TO US PERSONS ABROAD.
Just why has the US not changed to Residence-Based Taxation — is it because it is their club raised above the head of other countries and their people as they are allowed to pillage? Will the US Senate Finance Committee have ENOUGH (or any) intelligent and compassionate US Senators to effect change? If so, will that change come sooner rather than later or will there be more extra-territorial carnage? If there is not change, there is no way the US is not IMMORAL and all the rest. Set your people abroad free.
In the meantime, will Canada tell us if ALL Canadians have the same rights under their country’s Charter of Rights and Freedoms?
Will ALL Canadian taxpayers have the pleasure of paying for this US extra-territorial law coming across the border, its absurdity and injustice?
Unless that is so I see it as our Canadian leaders prioritizing: the economy of Canada over the people of Canada, a hard choice I know. Is that, as well, not IMMORAL?
I agree with you so strongly that it makes me feel dizzy. CBT is the focus of all the suffering and totally unjust.
yup very long post but very well written and said. lets hope that the canadian gov’t pays attention to the gathering storm clouds on the horizion.
In the meantime, will Canada tell us if ALL Canadians have the same rights under their country’s Charter of Rights and Freedoms?
i have just sent my MP a 4th email in 2 months asking him this question? as of now i have not even received an response that yes he did even see any of my e mails.
very disappointed (as i pointed out in todays email) that he could or would not respond he is a conserviatve m.p if that means anything
I have two things I want to say now that I’ve just returned from a Caribbean trip.
Firstly I know some government leaders in a couple island nations and discussed FATCA with a close family member of one of them I can assure people here that some of these countries are about to rebel and tell the US to take a hike. I hope I’m getting the gist of this right. One of them used the words “tyrants” and “dictators” in referring to the IRS and said that their country gets NOTHING back in return for what they are being asked to do. Personally I am reading between the lines of what may be said publicly and what they are thinking. What they will do is anyone’s guess but I assure you that this government minister is probably the most powerful men in the Caribbean. If the USA gets past this man I’ll be shocked. I’m hoping this man has the balls to call the bluff.
In my opinion FATCA can only work by intimidation. If any of these “leaders” would play out the FATCA bluff of the USA destroying their banking systems and economies they would plainly see that the USA will be equal if not greater losers. I also hear a comment that some think that the Cayman finance minister is a “pussy” and that he lost a lot of respect by his move last month. Apparently some of those small nations have gotten far more out of their relationships with China than with the USA. Something to think about.
It is sad commentary that you and I and ALL CANADIANS cannot have two-way communication with our Canadian government. Democracy?
Yes, most don’t even have the courtesy to acknowledge communication to them. So, I always think that minimum happening is astonishing and appreciate someone’s simple acknowledgement that my communication was received and date-stamped (remember those stamps that correspondence used to get?).
Is that minimum acceptable? I want at least a bit of respectful discussion. I will be looking for that trait in any future person I give my Canadian vote to.
This is one more of the many reasons why it is not in China’s long term interest to sign on to something like FATCA. The problem is that the U.S. is so disabled by the Homeland mindset (we are THE world) that they can’t imagine that (we are PART of A world).
We have a “ring side” seat to the decline of the American Empire. What they are thinking about today in America is the fact that Michelle Obama has turned 50 and is now an AARP member.
I’m with Calgary411
Thank you Petros and USCitizenAbroad for articulating so well what any human being should know intuitively: CBT is just plain wrong. Shame on America for calling itself the champions of freedom.
USG: FREE YOUR PEOPLE ABROAD
Your words were indeed powerful I forwarded this link to my local paper editor. I also forwarded it in another email to friends.
and then a third to the PM and MPs I have been writing to.
This is what I wrote.
FATCA is illegal . Look to article 15 in the Charter of Rights and article 4 in the Master of Nationality Rule in the Hague Convention.
My Prime Minister and Members of Parliament I urge you to please read this article written by fellow Canadian Citizens.
We want Canada to Glorious and Free. We want the Constitution and Charter of Rights and Freedom protected. We do not want to see citizens thrown under the bus.
We did fight the USA and win in 1812. We did protect refugees who sought refugee from injustice, like myself. We did not fight in Viet Nam . We refused to join George W. Bush in the Iraq war that turned out to be a disaster and was fought on a lie. We did not change our banking system to be like the USA banking system and that saved us from their terrible recession. We were affected but we did not experience their collapse. We do have many regulations the Americans do not like and want us to change for their advantage. We do protect our water as a human right. We do have a health system to be proud of which ALL Canadians have a right to.
Please do not sign this FATCA agreement. Canada is the country that will make or break it. There are over 1 million American persons. They may be dual citizens, permanent residents, accidental Americans, green card holders. signers for companies that could have the IRS look at them and request all their banking information. They could be certain snowbirds, who are completely unaware of the danger of FATCA.
These negotiations are being all done in secret. The banks are actually lobbying for the government TO APPROVE it.. Is money more important than our freedoms?
Please read the link and comments. The people who made this site are true Canadians. They are well versed in the law and have many constitutional lawyers on their side.
Also note as I right this the Republicans of the USA are preparing to repeal this law. They do not want reciprocal action. Their banks are lobbying to REPEAL it.
Many more Canadians are becoming aware of FATCA . You saw this weeks coverage by CBC and CTV. So many comments on these stories.. 99 percent are not in favour of you all signing.
@UScitizenabroad: great words to add to my post.
@Northernstar, thanks for passing this on to the powers that be. May be I should have not called them weanies (in so many words).
They are weanies if they say yes to FATCA
Thank you all for your determination to out this wrong that is CBT and FATCA. Thank you for fighting for the Sovereignty of Canada and every other country around the globe … what a shame that the adversary is the United States … once the Land of the free and the home of the brave … now becoming the Land of the jailed and the home of the slave … and indeed the home of the Politburo that wishes to enslave the world by sneak attack.
Thank you CheersBigEars for your comments about the Caribbean – as that is where I am resident – I lose no opportunity to push back against FATCA … and even create the opportunity sometimes myself …. right now a scandal is the accelerating size of bank fees and charges in Jamaica …. which of course are going to be compounded further by FATCA compliance costs should that indeed happen.
@chears Big Ears
You have written good news to my ears.
Good work, northernstar. Thanks for sending your email to the “leaders” / our Canadian government representatives. I hope they respond to you.
I mailed Flaherty a letter last week where I suggested he grow a pair also, so he must be used to hearing this by now!
Great post, and comments everyone!
I mailed Flaherty a letter last week where I also suggested he grow a pair, so he must be used to hearing this by now!
Great post, and comments everyone!
Dear Minister Flaherty:
There comes a time in many (not all that’s for sure) people’s lives when they wonder what they have accomplished, and what they will leave behind after their time on this planet is up. I’m at that point. And I feel like I’ve not accomplished much; at least nothing on a global scale. Sure, I’ve been a ‘good person’, always an exemplary employee, pretty good mom, polite to a fault, paid all my taxes (at least the ones I knew about it, and to the government of the country I’ve lived in all my working life), but I will leave nothing behind that the world will remember me by. Not that that’s a bad thing as it is the reality for 99.99% of all of us.
What about you? Will the world remember you? Will Canada?
Will your name go down in the history books? And if it does, what would you want to be remembered for?
Do you want to be remembered, as the Canadian Finance Minister who caved and signed on to FATCA and solidified US domination of the world forever more, or as the person who changed the direction of the world because he had the balls to say ‘NO’ to the USA bully? Because that would take huge balls! And that would surely get you remembered not just as a very ‘good person’, but as someone instrumental in positive global change.
A lot is at stake here. Not just for ‘US persons’ in Canada (or elsewhere), but for people of every citizenship living everywhere in the world, and for their children, though most don’t know it yet, and many never will. But the history books will tell the story.
You have a chance – I don’t – to write history. Don’t blow it. People like me are counting on you. Feel free to pass this letter on to your boss, if you think it will help change the course of history.
Xxxxxxxx Xxxxx (real name not hidden from Flaherty)
Canadian citizen since birth in 19xx (unfortunately also born with red/white/blue tattoo)
Right on, WhiteKat.
I want history to remember our Finance Minister as someone who stood firm to tell US Persons in Canada their rights will not be waived, the same as he would for ALL other Canadians.
Excellent letter . I want Flaherty to stand firm like the previous governments when it came to VIet Nam, W’s Iraq war, the banking systems,, water rights , health care and regulations in industry.
ML, thanks for your great article. I have mailed a copy to two people I know in the European Commission. I’ll let you know what their reaction is.
right on!!! what a great letter. hope that you at least get a response that he received it.
yup i am a little surprised by the crickets from my MP especially since he knows who i am personaly as we have sat a table of less than 10 for about 2 hours for a meeting in my town and as well took part on a different date in a photo opp. where he handed me a fairly sizeable cheque from the federal gov’t. for the association i was president of. and now with this fatca thing that cheque may come back to haunt me as i was a signer on that account and the americans are going to want to know about it.
It’s not clear to me that the US is a party to this agreement. Australia, Belgium, Brazil, Canada, Great Britain, India, China, the Netherlands, Norway and Sweden (amongst others) appear to have ratified it (though some with reservations). It also looks like Canada may have denounced it in 1996 (in the section: “Actions subsequent to the assumption of depositary functions by the Secretary-General of the United Nations”).