397 thoughts on “The Canada United States FATCA Intergovernmental Agreement”
@All
You could open an account without Photo ID. Example: SIN Card (Section A ID) and Credit Card From Major Bank (Section B). That satisfies the ID requirements.
However, for security the Bank will place certain restrictions on the account, such as refusing to grant an overdraft and holding all cheque deposits.
A Canadian citizenship card is what you were given in substitute for a Canadian birth certificate. Canadians born in Canada don’t need them. It’s a signal that you were born elsewhere.
Cerium398 says
February 6, 2014 at 7:26 pm
“I’ve worked in banking, I know what I’m talking about.”
I was refused a chequing account or a debit card on an existing account, if I did not first provide my SIN number. I really tried and talked to the manager quite extensively about it. No, it isnt required legally. In fact you can refuse their demand (even though they find that suspicious). They have all the right to refuse you service for, it seems, whatever reason they determine. I’m not sure how successful a citizen can be to seek redress for being refused service by a business… but I find their right has very wide discretion.
I am talking 2 diff credit unions in BC, where I would imagine banks also follow the same procedure. Are you mistaken?, are you involved in actually opening new accounts or granting debit cards?
Amendments to the Income Tax Act
Clause 2
Failure to provide identification number
ITA 162(6)
Subsection 162(6) of the Income Tax Act (the Act) provides a penalty for failure by any person or partnership to provide on request their Social Insurance Number (SIN) or business number to any person who is required to make an information return in respect of the individual. The penalty does not apply where an application is made for a number within 15 days of the request and the number is subsequently provided within 15 days of its receipt. This subsection is amended to extend the penalty for failure by any person or partnership to provide their U.S. federal taxpayer identifying number when requested to do so. However, the penalty will not apply where an application is made for a U.S. federal taxpayer identifying number within 90 days of the request and the number is subsequently provided within 15 days of its receipt.
Bolding added.
Oops, I meant to bold the following sentence:
This subsection is amended to extend the penalty for failure by any person or partnership to provide their U.S. federal taxpayer identifying number when requested to do so.
@Hogwarts
That depends on if you have any US indica on your electronic Customer File at the bank.
Does the bank know you are American?
Is your citizenship logged on your file? (Example: At BMO there are fields for Primary and Secondary Citizenship)
Do you have a US address or phone number on your file?
A standing order to transfer funds to an account in the US?
The way I see it, unless someone was foolish enough to a US Passport as ID with their bank in the past, or has a secondary US address on file (say a vacation home in Florida), there would be no US indica on file.
Here is information on Access to Basic Banking Services in Canada with links to ID that is acceptable. At the present time, a foreign birth certificate cannot be used to open a Canadian bank account. Will the IGA change that? We don’t know.
Banks fall under federal Bank Act. Credit unions are regulated by the provinces, so the laws vary across Canada. They are not covered by Canada’s Bank Act.
Cerium398 says
February 6, 2014 at 7:47 pm
This is the curiosity. How will they get the information the IRS seeks? The problems you indicate will be immediately apparent to the banks, and presumably and if possible they will attempt to address it. How? We dont know yet…
@medean
I am not mistaken. I worked in customer service and sales. I didn’t personally open accounts; I did issue new and replacement debit cards.
Here is the official list from CIBC for ID requirements:
Notice it states a SIN can be used as one piece of acceptable ID. It also states:
“A Social Insurance Number card issued by the Government of Canada. While this card is not a mandatory piece of identification, the law requires CIBC to ask for your Social Insurance Number (SIN) when you open an account that earns interest”
Banks are regulated federally while credit unions are regulated provincially. I don’t know what basis the credit unions had in BC to refuse you. These credit unions should have an internal escalation process; if I were you I would complain to the provincial regulator.
Cerium398 says
February 6, 2014 at 7:53 pm
I did manage to open a non interest bearing (no chequiing, no term deposit, no debit card) account in one CU. However, I couldnt get a debit card on a savings account I had in another CU. Of course, on yet another CU account I have had for years, I have all those “perks” since the beginning. I cant remember teh secondary id I provided in the end: by driver’s license for sure, but not my SIN, birth cert., passport or credit card…. Maybe a recent phone bill?
Yes! I just talked to a CU about opening an account and he said a photo ID such as my driver’s license, a credit card and a bill to prove residency.
Renounce US citizenship — Just do it!
I waffle about renouncing because 1) I do not agree that I am a US person and if I renounce then I am complicit in the agreement that I am and 2) Since my information is not on any database in the US I don’t want to start now by adding my name to a list!
Canadian Cop really hit the nail on the head with this passage from his open letter to FATCA enabler PM Harper:
“Was taxation without representation not the catalyst behind the Boston Tea Party? Jacob Silverman, in How the Boston Tea Party Worked states, ‘Unlike their British brethren, the people living in the 13 colonies did not have direct representatives in the British parliament. Because of that, the colonists had no way to vote for how they would be taxed or who would represent them. And because of this lack of representation, the British government was free to tax the colonists in any way — and for any amount — that it saw fit.’”
“’With no way to fight taxation and no way to claim their rights, many colonists feared that their property could be taken away through debilitating taxes.’ As a result of the current US administration’s disdain for their own Constitution, the US has come full circle and turned into what it once despised.”
@medean
Something doesn’t seem right. On what basis does the CU have to compel you to present a SIN before you may have a debit card?
Unless the CU is trying to say you only have one piece of acceptable ID on file, and they need another piece…but it can be something other than a SIN.
Does this CU have some online or print document, similar to CIBC, where they list their ID requirements?
Samuel Adams says
February 6, 2014 at 8:20 pm
I was lucky in relinquishing. I became a Cdn citizen in 1981, but in transiting the US I was flagged into Homeland Security by my Cdn passport indicating my birth. So they told me to get a US passport and then let me go. Next time I entered the US my digital Cdn passport had all the info that I was warned to get a US passport,,,, again they let me through with a warning. On an expected 3rd transit through with my children, I felt compelled to get a US passport and I did. Only after all that and all the dire FATCA news, did I come here to seek advice (where people werent too hopeful of me relinquishing, since I had “voluntarily” acquired a US passport. Nevertheless, I took the plunge and notified the US consulate and argued my case: they eventually did give me a backdated CLN, and I surrendered my US passport…
@Samuel Adams
Great story! When did you go to the consulate? What city? How long did it take to get the CLN? Did you have to nag them about processing it or did it just eventually arrive on its own?
The CLN is the golden ticket to freedom, kind of like the “Letters of Transit” that Bogart was after in Casablanca.
Cerium398 says
February 6, 2014 at 8:29 pm
Their final word on the subject was they had the right to refuse me service. They certainly like the SIN, and I think they prefer it since it is a unique identifier — which really nails an individual in the system, esp good for cross referencing other databases. These new stricter rules came into effect following 911, where integration of information across disparate sources became the new effort to combat terrorism….
Bloomberg covers the Canada/US IGA. Prime for commenting!
I assume you are referring to me? All this was done 1 year ago. In Merida, Yucatan in Mexico. I corresponded directly to one case worker throughout. I traveled there once with all the documents and forms I could muster, and I got the CLN after a nervous wait of about 4 months — no nagging other than reminders I was waiting.
Best Practices for the use of Social Insurance Numbers in the private sector
Should businesses ask individuals for their Social Insurance Number?
The Office of the Privacy Commissioner of Canada has long held the position that the Social Insurance Number (SIN) should not be used as a general identifier and that organizations should restrict their collection, use and disclosure of SINs to legislated purposes.
While recognizing that some private-sector organizations are required by law to request customers’ or employees’ SINs, we remain opposed in principle to the practice of requesting the SIN for general purposes of identification. We recommend that no private sector organization request the SIN from a customer, and that no customer give the SIN to a private-sector organization, unless the organization is required by law to request it.
To what extent is collection of SINs permissible in the private sector?
Employers are authorized to collect SINs from employees in order to provide them with records of employment and T-4 slips for income tax and Canada Pension Plan (CPP) purposes.
Organizations such as banks, credit unions, brokers and trust companies are required under the Income Tax Act to ask for customers’ SINs for tax reporting purposes (e.g., interest earning accounts, RRSPs, etc.).
No private-sector organization is legally authorized to request customers’ SINs for purposes other than income reporting. Even in the case of a financial institution, if a customer’s account is not of a type that earns interest (e.g., if it is a credit account as opposed to a savings account), there is no legal requirement for the organization to collect the individual’s SIN, and no obligation for the individual to supply it.
Even so, there is no law prohibiting an organization from asking for a customer’s SIN, or a customer from supplying the SIN, for purposes other than income reporting.
Although we do not recommend the practice, we recognize that an organization may ask for the SIN, and a customer may choose to supply it, for reasonable purposes of identification, provided that the principles of the Personal Information Protection and Electronic Documents Act (PIPEDA) are duly observed.
How does PIPEDA apply to the collection, use, and disclosure of SINs?
A SIN is the personal information of the individual to which it is assigned. As such, its collection, use, or disclosure is subject to all relevant provisions of PIPEDA. Notably, the following principles of Schedule 1 to PIPEDA apply.
Principle 4.2 (Identifying purposes): An organization must inform the individual of its purposes for collecting the SIN and should do so at the time of collection, either orally or in writing (e.g., on an application form).
The organization should clearly specify whether it is requesting the SIN for purposes of income-reporting or for purposes of identification.
If requesting the SIN for purposes of income reporting, the organization should clearly indicate that the request is required by law.
If requesting the SIN only for purposes of identification, the organization should clearly indicate that the collection is optional.
If an organization that is required to collect the SIN for income-reporting purposes intends to use it also for purposes of identification, the organization should, at the time of collection, clearly specify this further intention and clearly indicate that the individual’s consent to the identification purposes is optional.
An organization must not use the SIN for any purpose not previously identified without first specifying the new purpose and obtaining the individual’s express consent to it. In other words, if the organization originally specified only income-reporting as the purpose for collecting the SIN, it must again seek the individual’s consent before using the SIN for purposes of identification.
Where the SIN is to be used for purposes of identification, an organization must provide a convenient mechanism whereby the individual may withdraw consent to such purposes any time after providing the SIN. The mechanism should be inexpensive, easy to execute, and immediately effective. A toll-free telephone number is recommended.
Principle 4.3 (Consent): The knowledge and consent of the individual are required for any collection, use, or disclosure of a SIN. Where purposes for collecting the SIN are reasonable and clearly specified to the individual at the time of collection (e.g., on an application form), the organization may take the individual’s provision of the SIN as indication of consent.
Principle 4.3.3 : “An organization shall not, as a condition of the supply of a product or service, require an individual to consent to the collection, use, or disclosure of information beyond that required to fulfil the explicitly specified and legitimate purposes.”
Identification purposes are not in themselves considered a legitimate basis for requiring an individual to provide the SIN. If the SIN is being requested for purposes of identification only, the organization must not in any way suggest to the individual that the SIN is required as a condition for providing a product or service or otherwise establishing a business relationship.
Even where it is reasonable for an organization to ask a customer for proof of identity, a request for the SIN in particular must be represented and treated as optional. In verifying identity, an organization may request the SIN as one option among others, but never as a requirement in itself.
When banks or other credit-granting institutions need to confirm identity for the purposes of running a credit check on a loan applicant, it is acceptable to ask for the SIN as one among several identification options, but it should not be required as a condition for granting credit.
@All
You could open an account without Photo ID. Example: SIN Card (Section A ID) and Credit Card From Major Bank (Section B). That satisfies the ID requirements.
However, for security the Bank will place certain restrictions on the account, such as refusing to grant an overdraft and holding all cheque deposits.
Stanley Fischer and FATCA- Secret Consumer Complaint Process in Israeli Banking Regulation
http://www.liveleak.com/view?i=751_1357220615
@GwEvil
A Canadian citizenship card is what you were given in substitute for a Canadian birth certificate. Canadians born in Canada don’t need them. It’s a signal that you were born elsewhere.
Cerium398 says
February 6, 2014 at 7:26 pm
“I’ve worked in banking, I know what I’m talking about.”
I was refused a chequing account or a debit card on an existing account, if I did not first provide my SIN number. I really tried and talked to the manager quite extensively about it. No, it isnt required legally. In fact you can refuse their demand (even though they find that suspicious). They have all the right to refuse you service for, it seems, whatever reason they determine. I’m not sure how successful a citizen can be to seek redress for being refused service by a business… but I find their right has very wide discretion.
I am talking 2 diff credit unions in BC, where I would imagine banks also follow the same procedure. Are you mistaken?, are you involved in actually opening new accounts or granting debit cards?
From Voyons’ link
http://www.fin.gc.ca/drleg-apl/2014/can-us-eu-0214n-eng.pdf
Bolding added.
Oops, I meant to bold the following sentence:
@Hogwarts
That depends on if you have any US indica on your electronic Customer File at the bank.
Does the bank know you are American?
Is your citizenship logged on your file? (Example: At BMO there are fields for Primary and Secondary Citizenship)
Do you have a US address or phone number on your file?
A standing order to transfer funds to an account in the US?
The way I see it, unless someone was foolish enough to a US Passport as ID with their bank in the past, or has a secondary US address on file (say a vacation home in Florida), there would be no US indica on file.
Here is information on Access to Basic Banking Services in Canada with links to ID that is acceptable. At the present time, a foreign birth certificate cannot be used to open a Canadian bank account. Will the IGA change that? We don’t know.
http://maplesandbox.ca/2014/access-to-basic-banking-services-in-canada/
Banks fall under federal Bank Act. Credit unions are regulated by the provinces, so the laws vary across Canada. They are not covered by Canada’s Bank Act.
Cerium398 says
February 6, 2014 at 7:47 pm
This is the curiosity. How will they get the information the IRS seeks? The problems you indicate will be immediately apparent to the banks, and presumably and if possible they will attempt to address it. How? We dont know yet…
@medean
I am not mistaken. I worked in customer service and sales. I didn’t personally open accounts; I did issue new and replacement debit cards.
Here is the official list from CIBC for ID requirements:
https://www.cibc.com/ca/acceptable-identification.html
Notice it states a SIN can be used as one piece of acceptable ID. It also states:
“A Social Insurance Number card issued by the Government of Canada. While this card is not a mandatory piece of identification, the law requires CIBC to ask for your Social Insurance Number (SIN) when you open an account that earns interest”
Banks are regulated federally while credit unions are regulated provincially. I don’t know what basis the credit unions had in BC to refuse you. These credit unions should have an internal escalation process; if I were you I would complain to the provincial regulator.
Cerium398 says
February 6, 2014 at 7:53 pm
I did manage to open a non interest bearing (no chequiing, no term deposit, no debit card) account in one CU. However, I couldnt get a debit card on a savings account I had in another CU. Of course, on yet another CU account I have had for years, I have all those “perks” since the beginning. I cant remember teh secondary id I provided in the end: by driver’s license for sure, but not my SIN, birth cert., passport or credit card…. Maybe a recent phone bill?
Yes! I just talked to a CU about opening an account and he said a photo ID such as my driver’s license, a credit card and a bill to prove residency.
Renounce US citizenship — Just do it!
I waffle about renouncing because 1) I do not agree that I am a US person and if I renounce then I am complicit in the agreement that I am and 2) Since my information is not on any database in the US I don’t want to start now by adding my name to a list!
Canadian Cop really hit the nail on the head with this passage from his open letter to FATCA enabler PM Harper:
“Was taxation without representation not the catalyst behind the Boston Tea Party? Jacob Silverman, in How the Boston Tea Party Worked states, ‘Unlike their British brethren, the people living in the 13 colonies did not have direct representatives in the British parliament. Because of that, the colonists had no way to vote for how they would be taxed or who would represent them. And because of this lack of representation, the British government was free to tax the colonists in any way — and for any amount — that it saw fit.’”
“’With no way to fight taxation and no way to claim their rights, many colonists feared that their property could be taken away through debilitating taxes.’ As a result of the current US administration’s disdain for their own Constitution, the US has come full circle and turned into what it once despised.”
@medean
Something doesn’t seem right. On what basis does the CU have to compel you to present a SIN before you may have a debit card?
Unless the CU is trying to say you only have one piece of acceptable ID on file, and they need another piece…but it can be something other than a SIN.
Does this CU have some online or print document, similar to CIBC, where they list their ID requirements?
Samuel Adams says
February 6, 2014 at 8:20 pm
I was lucky in relinquishing. I became a Cdn citizen in 1981, but in transiting the US I was flagged into Homeland Security by my Cdn passport indicating my birth. So they told me to get a US passport and then let me go. Next time I entered the US my digital Cdn passport had all the info that I was warned to get a US passport,,,, again they let me through with a warning. On an expected 3rd transit through with my children, I felt compelled to get a US passport and I did. Only after all that and all the dire FATCA news, did I come here to seek advice (where people werent too hopeful of me relinquishing, since I had “voluntarily” acquired a US passport. Nevertheless, I took the plunge and notified the US consulate and argued my case: they eventually did give me a backdated CLN, and I surrendered my US passport…
@Samuel Adams
Great story! When did you go to the consulate? What city? How long did it take to get the CLN? Did you have to nag them about processing it or did it just eventually arrive on its own?
The CLN is the golden ticket to freedom, kind of like the “Letters of Transit” that Bogart was after in Casablanca.
Cerium398 says
February 6, 2014 at 8:29 pm
Their final word on the subject was they had the right to refuse me service. They certainly like the SIN, and I think they prefer it since it is a unique identifier — which really nails an individual in the system, esp good for cross referencing other databases. These new stricter rules came into effect following 911, where integration of information across disparate sources became the new effort to combat terrorism….
Bloomberg covers the Canada/US IGA. Prime for commenting!
http://www.bloomberg.com/news/2014-02-05/canada-signs-fatca-tax-pact-with-u-s-.html
WhatAmI says
February 6, 2014 at 8:42 pm
I assume you are referring to me? All this was done 1 year ago. In Merida, Yucatan in Mexico. I corresponded directly to one case worker throughout. I traveled there once with all the documents and forms I could muster, and I got the CLN after a nervous wait of about 4 months — no nagging other than reminders I was waiting.
For anyone in similar circumstance, here to end…
http://isaacbrocksociety.ca/2011/12/16/did-you-relinquish-before-february-6-1995-then-you-did-not-have-to-inform-the-state-department/comment-page-3/#comments
Best Practices for the use of Social Insurance Numbers in the private sector
Should businesses ask individuals for their Social Insurance Number?
The Office of the Privacy Commissioner of Canada has long held the position that the Social Insurance Number (SIN) should not be used as a general identifier and that organizations should restrict their collection, use and disclosure of SINs to legislated purposes.
While recognizing that some private-sector organizations are required by law to request customers’ or employees’ SINs, we remain opposed in principle to the practice of requesting the SIN for general purposes of identification. We recommend that no private sector organization request the SIN from a customer, and that no customer give the SIN to a private-sector organization, unless the organization is required by law to request it.
To what extent is collection of SINs permissible in the private sector?
Employers are authorized to collect SINs from employees in order to provide them with records of employment and T-4 slips for income tax and Canada Pension Plan (CPP) purposes.
Organizations such as banks, credit unions, brokers and trust companies are required under the Income Tax Act to ask for customers’ SINs for tax reporting purposes (e.g., interest earning accounts, RRSPs, etc.).
No private-sector organization is legally authorized to request customers’ SINs for purposes other than income reporting. Even in the case of a financial institution, if a customer’s account is not of a type that earns interest (e.g., if it is a credit account as opposed to a savings account), there is no legal requirement for the organization to collect the individual’s SIN, and no obligation for the individual to supply it.
Even so, there is no law prohibiting an organization from asking for a customer’s SIN, or a customer from supplying the SIN, for purposes other than income reporting.
Although we do not recommend the practice, we recognize that an organization may ask for the SIN, and a customer may choose to supply it, for reasonable purposes of identification, provided that the principles of the Personal Information Protection and Electronic Documents Act (PIPEDA) are duly observed.
How does PIPEDA apply to the collection, use, and disclosure of SINs?
A SIN is the personal information of the individual to which it is assigned. As such, its collection, use, or disclosure is subject to all relevant provisions of PIPEDA. Notably, the following principles of Schedule 1 to PIPEDA apply.
Principle 4.2 (Identifying purposes): An organization must inform the individual of its purposes for collecting the SIN and should do so at the time of collection, either orally or in writing (e.g., on an application form).
The organization should clearly specify whether it is requesting the SIN for purposes of income-reporting or for purposes of identification.
If requesting the SIN for purposes of income reporting, the organization should clearly indicate that the request is required by law.
If requesting the SIN only for purposes of identification, the organization should clearly indicate that the collection is optional.
If an organization that is required to collect the SIN for income-reporting purposes intends to use it also for purposes of identification, the organization should, at the time of collection, clearly specify this further intention and clearly indicate that the individual’s consent to the identification purposes is optional.
An organization must not use the SIN for any purpose not previously identified without first specifying the new purpose and obtaining the individual’s express consent to it. In other words, if the organization originally specified only income-reporting as the purpose for collecting the SIN, it must again seek the individual’s consent before using the SIN for purposes of identification.
Where the SIN is to be used for purposes of identification, an organization must provide a convenient mechanism whereby the individual may withdraw consent to such purposes any time after providing the SIN. The mechanism should be inexpensive, easy to execute, and immediately effective. A toll-free telephone number is recommended.
Principle 4.3 (Consent): The knowledge and consent of the individual are required for any collection, use, or disclosure of a SIN. Where purposes for collecting the SIN are reasonable and clearly specified to the individual at the time of collection (e.g., on an application form), the organization may take the individual’s provision of the SIN as indication of consent.
Principle 4.3.3 : “An organization shall not, as a condition of the supply of a product or service, require an individual to consent to the collection, use, or disclosure of information beyond that required to fulfil the explicitly specified and legitimate purposes.”
Identification purposes are not in themselves considered a legitimate basis for requiring an individual to provide the SIN. If the SIN is being requested for purposes of identification only, the organization must not in any way suggest to the individual that the SIN is required as a condition for providing a product or service or otherwise establishing a business relationship.
Even where it is reasonable for an organization to ask a customer for proof of identity, a request for the SIN in particular must be represented and treated as optional. In verifying identity, an organization may request the SIN as one option among others, but never as a requirement in itself.
When banks or other credit-granting institutions need to confirm identity for the purposes of running a credit check on a loan applicant, it is acceptable to ask for the SIN as one among several identification options, but it should not be required as a condition for granting credit.
http://www.priv.gc.ca/resource/fs-fi/02_05_d_21_e.ASP
Moderator could you please give my email to mdean so that we could talk privately.
@ Dianne,
I sent it to mdean with a copy of your above comment.