Liberty and justice for all United States persons abroad

The Isaac Brock Society

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As long time IBS readers have known, we have been saying that a global GATCA was the ultimate goal of the FATCA mis-adventure. It was the dream of the ideologues in Treasury and the IRS who who have been responsible for the implementation of FATCA.

The most recent posting about GATCA on Isaac Brock in this article by Alex Newman

From FATCA to GATCA – Alex Newman hits another home run

Update 2/17:  Alex has a new article out…

Globalists Unveil Socialist-backed New World Tax Regime

Maybe Obama, when he launched his offshore jihad didn’t understand what he was doing. (video here) Maybe Congressman in their FATCA PR announcements back in 2009, were just witless vassal’s and didn’t know it. Certainly few Congressman knew they passed it hidden in stealth in the Hire Act, but this is what we now are getting.  A gotcha GATCA!

If you search for GATCA terms in archives you will find other earlier pieces last year like here, and the references go back farther in the comments.  We were watching for the blow back onto domestic shores in the form of the reciprocity DATCA, the history of which is documented here., but it is beginning to look like that GATCA will get here first.  Will America’s Congress accept it? Time will tell, as they say.

Today, after a lot of anticipation, we now have the official birth announcement, on the web site of the OECD , Jesse Eggert’s new employer.

Standard for Automatic Exchange of Financial Account Information

Get used to the new acronym that is common in the OECD and FCC (FATCA Compliance Complex) parlance,

AEOI or Automatic Exchange of Information.

I have a feeling you will be seeing it or some variation of it more often now.

Bottom line, AEOI = GATCA and this monster was created by the Union of its FATCA  Father and OECD mother.

I am moving some discussion around this subject from Alex’s thread, because I think it is important you read and consider how this GATCA will factor into the CBT (Citizenship Based Taxation) reporting requirements under FATCA, and the RBT (Residency Based Taxation) reporting under GATCA.

How does that work?  Will the U.S. just meekly acquiesce and accept this new global norm, which came from Treasuries Robert Stack’s “Gold Standard”?  What if they don’t?

Also, notice how this is already factoring into the FATCA IGA acceptance thinking of affected FFIs.  If I were a country faced with signing one of these, I think I would be confused.  Which way am I supposed to go? How do I reconcile the conflicts.  Do I do both, or do I accept FATCA as supreme over GATCA? How do I reconcile the conflict claims of types of taxation?

GATCA is born:

OECD proposes data exchange norm in tax evasion crackdown:

Here is the most relevant information:

“The OECD’s top official for financial issues, Pascal Saint-Amans, said the OECD’s proposed standard is in effect a multilateral version of the US FATCA, or Foreign Account Tax Compliance Act.

One major difference, however, is that the OECD standard will be based on a residency test rather than nationality, according to OECD officials.

It will cover not only bank deposits, but interest paid and capital gains.

It will also require reporting of the ultimate beneficiary, which should hinder the use of trusts and shell companies to evade tax liabilities.

Saint-Amans acknowledged, however, that gold and other precious metals will escape the system as banks aren’t forced to open their vaults and safe deposit boxes, (YET!) and this could pose a problem.”

Noone goes onto say….. The US needs to scrap FATCA and adopt the OECD system. As long as FATCA lives, with the withholding threats, discrimination of Americans will continue, even with a global OECD GATCA.

From Osgood….

look at this comment in a FATCA submission to the NZ Select Committee hearing 2 days ago from NZ AMP…

“We submit that as it does not seem to be feasible under the wording of the draft IGA to separate “review, identify and report”, Financial Institutions must be allowed to identify and review ALL accounts. We further submit that they should be allowed – for consistency with the new global standard for automatic exchange of information – to report on ALL accounts, regardless of balance.

This is going to get ugly ……

  1. @just me … “this is going to get ugly.”… agree agree agree…. see caracalla “as long as we have this [pointing to his sword]… we shall not[be poor]“……………… waiting and watching for [i am] the establishment of other global reserve currency……………….

 

79 thoughts on “#GATCA is born at the #OECD, and #FATCA is the Proud Father”

  2. @ Just Me
    Regarding your “Guy Out Of The UK”: I listened but mostly what I heard was blah, blah, blah and boo-hoo for the banks. Mr. GOOTUK is a policy wonk and and that’s fine but FATCA diktats are wrong and banks should be pushing back NOT rolling over. Sorry, but I will never do a boo-hoo for the banks. I’ll leave that for Mr. GOOTUK. However, what I will do eventually is a bye-bye to the banks. Instead of exposing and/or getting rid their US infected clients, maybe banks should start thinking about getting rid of their exposure to anything the US racketeers can extort from them.

  3. @EmBee

    Yes, he is a policy wonk, and is trying to explain what is happening with FATCA evolving into the global GATCA. He often says, like in his second podcast, he is NOT making a statement of whether or not he agrees with what is happening, but trying to explain all the complications and reality of the “situation on the ground” from this FATCA portion of the larger Treasuries war.

    I appreciate the understanding his podcast brings to the larger subject, and I did NOT see it as just boo hoo to the banks, although, I do take the point, that in this global economy and with the practical impossibility of avoiding the US markets and USD dominance, they are really have a compliance problem that is not as easy to avoid as we would like to believe. This is not about right and/or wrong. (although I think it is wrong) It is about the practical realpolitik options financial institutions face and what the consequences might be. I get it. Hell the US is even charging companies for Alleged Violation of Weapons of Mass Destruction Proliferator Sanctions for selling recreational chairs to Iran.

  4. @ Just Me
    If the banks really feel they cannot avoid US markets and USD dominance (and I actually think they could if they wanted to) then we should all be putting our thinking caps on to figure out a way to avoid the banks. It’s debtors they want anyway, not depositors. I do not agree that this is not about right and/or wrong. If you buy into that then governments will continue to conjure up even more egregiously wrong laws and regulations to the point of total irrational obscenity (actually I think FATCA is just that) and we will all be expected to shrug and comply because THEY dictate this to be “reality”.

  6. Sorry, Just Me, I can’t find the list of ‘early adopters’. Is the US among them, or are they going to bail last minute like the last time the OECD tried something like this?

  7. They have FATCA so I doubt they will sign up. Let’s see what Obama does at the G19 in September in Australia

  8. I guess this is as mainstream as GATCA reporting will be… From Accounting Today

    OECD Releases Global Standard for Automatic Exchange of Tax Information

    I think it is safe to say, this GATCA program without all the loopholes of FATCA will NOT be adopted by the USA…

    You have to wonder if anyone besides accounting and compliance types in the USA are following the OECD GATCA rollout?

    Here is another link that might answer @Bubblebustin’s question about early adopters…

    http://haydonperryman.com/2014/07/22/an-early-commentary-on-the-automatic-exchange-of-information/

    GATCA is an example of the BIGGEST tax regulatory story of the millennium hidden inside the boring and totally ignored by mainstream media.

    BTW, if anyone is reading this boring stuff, I really recommend the GATCAst by Hadyon Perryman, who gives you the perspective from the FCC POV which I know some here do not like hearing. But listen you must under the KYE or ‘Know Your Enemy’ principle. (I am speaking generally, and not specifically to Haydon whose knowledge I respect and have learned from.)

    There are some very interesting tidbits.

    The magnitude of the problem FFIs have ‘curing’ (yes like a disease) U.S. Personhood indicia and extent of the customer outreach necessary to fill out U.S. forms is staggering when you think about it.

    He doesn’t think the Banks (or FFIs) have figured that out yet. In his calculations there will necessarily be 900 Million outreach efforts by FFIs to entities alone (not counting real person customers) with a failure rate (forms returned ‘not fit for purpose’) of at least 80% if history is a guide.

    The Customer experience will NOT be a good one.

    @bubblebust calls this rightfully, Formageddon!

    The complexity of the new W-8 forms make it even more likely that they were be incorrect forms filed at first contact request. It certainly is aggressiveformification to require all citizens of the world to prove Non U.S. Personhood via IRS forms.

    Herein is the Achilles Heel of FATCA setting up an accident waiting to happen.

    The unique aspect about FATCA, is that the punishment (enforcement) for FATCA compliance failure will NOT be at IRS discretion, (in earlier QI, they did NOTHING to enforce it), but rather because of the ‘clever’ withholding regime, it will be the FFIs enforcing FATCA on each other.

    That is the BEAUTY or the BEAST of FATCA, the SLAVES WHIP EACH OTHER.

    What happens when the slaves enraged turn on their IRS master? Time will tell, I guess, and the media will probably not report that either.

  9. @bubblebustin…

    The countries and jurisdictions that have publicly committed to implementation of GATCA, the automatic exchange of information include Andorra, Anguilla, Argentina, Australia, Austria, Belgium, Bermuda, Brazil, British Virgin Islands, Bulgaria, Canada, Cayman Islands, Chile, People’s Republic of China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Montserrat, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Turks & Caicos Islands, United Kingdom, United States (really?) , and the European Union.

  11. GATCA: All I want to know is what information on whom would be sent to where. Also why would local FIs like credit unions who only have local clients have to send any information on these clients anywhere other than to the tax agency of the country they are located in? Nobody has to answer the why of GATCA because that part I have figured out and it is very ugly.

    BTW, shouldn’t Just Me be getting a royalty or some sort of prize for coining GATCA?

  12. Statement from CF&P President on OECD’s Global Standard for Automatic Exchange of Tax Information

    (Washington, D.C., Tuesday, July 22, 2014) In response to the OECD’s release of its new Standard for Automatic Exchange of Financial Information in Tax Matters, Center for Freedom and Prosperity President Andrew Quinlan offers the following statement:

    “This is just more of the same from the unelected bureaucrats at the OECD. International tax collectors are determined to abolish tax competition by any means possible.

    We’ve already seen the disastrous consequences of attempting to globally implement the Foreign Account Tax Compliance Act (FATCA). The OECD’s latest effort will only compound the problem and pile even more burdens on the global economy. It will also subject taxpayers everywhere to unacceptable violations of basic privacy and human rights, allowing bad state actors to more easily harass and intimidate minority groups and political opponents.

    The simple and common sense alternative to the OECD’s expensive and convoluted new international tax regime is residence based taxation. There’s no moral or legal justification for any nation to tax beyond its borders.”

    The Center for Freedom & Prosperity is a Washington, DC based think-tank dedicated to promotion of tax competition, financial privacy and fiscal sovereignty.

    For additional comments:
    Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org

  13. More GATCA commentary….
    This time from Christian Aid…

    OECD move against tax dodging will not benefit poor countries

    21 July 2014 – The Organisation for Economic Co-operation and Development (OECD) which is supposed to provide guidelines for good practice among its member states has missed another opportunity to show they are committed to ensuring developing countries benefit from changes in international tax practices, says Christian Aid.

    and this is an interesting quote…. Wonder how this will play out at the G-19 (G-20 absent Russia) in the September meeting in Australia where GATCA is supposed to be endorsed…

    ‘It must be made clear that this cannot happen. We need to see all financial centres commit to multilateral automatic information exchange with all countries requesting information as quickly as possible. This includes not just the likes of Switzerland which has talked of only agreeing to automatic information exchange with countries with close economic and political ties, but also places like the USA and Australia which are yet to commit to early adoption.’

    and then there are those that think GATCA needs to be even tougher. Maybe just stop all global transactions, I guess. Bring the global economy to a grinding halt. That is how I hear that ISIS is solving their desire, “to distance girls from debauchery and immorality”. Just issue a FATWA requiring ALL women to undergo genital mutilation. Isn’t that similar (not really, I know,) to the tax evasion approach, that the FATCAnatics and OECD GATCAnatics are doing with their global FATWA with its dragnet “ALL” requirements to , as Max Baucas has said, “Stop Tax dodging once and for all!”

    OECD’S PLAN TO END BANK SECRECY BLASTED BY ACTIVISTS

    “Yet again, the OECD has flunked an opportunity to rid the world of the curse of tax havenry,” said Tax Justice Network’s Markus Meinzer in a statement.

    I couldn’t help but respond with a couple tweets…

    https://twitter.com/TaxJusticeNet/status/491540613788336128

  14. Professor Christians expressed her scepticism of the US’s participation last February:

    OECD’s Plan for Global Tax Info Exchange: Could be Deja Vu All Over Again

    “One obvious question is whether the US would sign on to this standard, since it represents a major reduction of the massive expansion of the US taxpayer base contemplated by FATCA. If not, can one really envision a world in which everyone shares data reciprocally except the United States, which not only does not share data reciprocally but also places the most expansive demands on everyone else? (For those not following along, the US claims people based on their legal status in the US as well as their actual residence, in contravention of the global norm reflected in the OECD standard, which rejects the former claim in favor of the latter. In terms of reciprocity, what the US calls reciprocal with respect to data sharing is so far reciprocal in name only).

    A related issue that already exists under FATCA and will be expanded exponentially under the OECD plan is that reciprocity means every government bears the cost of incorporating expansive financial surveillance (in the case of the US, far beyond that required for all other countries) yet as the Tax Justice Network points out, this formal equality in fact introduces substantive inequality and potentially great harm to poorer countries.”

    http://taxpol.blogspot.ca/2014/02/oecds-plan-for-global-tax-info-exchange.html

    @Just Me

    There might be a problem with your last link re OECD’s PLAN…

  16. More GATCA effects…

    Do You Want Your Private Financial Information Automatically Shared with Russia or China?

    A real can of worms the FATCAnatics have opened up…

    The Obama administration enthusiastically supports the OECD initiative, but even the administration has realized important privacy issues at are stake. Robert B. Stack, Deputy Assistant Secretary of the Treasury for International Tax Affairs, has testified that “the United States will not enter into an information exchange agreement unless the Treasury Department and the IRS are satisfied that the foreign government has strict confidentiality protections. Specifically, prior to entering into an information exchange agreement with another jurisdiction, the Treasury Department and the IRS closely review the foreign jurisdiction’s legal framework for maintaining the confidentiality of taxpayer information.”

    Leaving these determinations to a tax agency with little institutional interest in anything other than raising tax revenue is dangerous. There is little doubt sensitive financial information about American citizens and businesses can and will be used by some governments for reasons that have nothing to do with tax administration, such as identifying political opponents’ financial resources or industrial espionage. In addition, individuals in corrupt governments may use the information for criminal purposes such as identity theft, to access others’ funds or to identify potential kidnapping victims. It is naïve to think otherwise.

  18. EmBee @ Just Me
    RE: http://freedomandprosperity.org/2014/blog/oecd-rules-will-create-privacy-nightmare/
    Andrew Quinlan’s article have always been top notch. This one however, a long quote from a David Burton piece, doesn’t register quite right with me. Burton seems to think that it’s THOSE countries (you know, the ones the USA is antagonistic to) that are the biggest problem whereas I think it’s the USA that is the biggest problem (the USA and Israel, actually). Time and time again the USA has demonstrated that privacy and sensitive information are not protected at all. In fact the USA gobbles up as much data as it can, stores every byte and then indiscriminately dribbles it on any agency that asks, while showing no ability to keep hackers and other miscreants from nipping into the cache.

  19. http://www.mondaq.com/australia/x/330514/withholding+tax/New+proposal+for+enhanced+customer+due+diligence+on+all+foreign+nationals+and+review+of+implementation+of+FATCA

    ..”However, it is important to note that the range of financial institutions which may be required to report under the common reporting standard could well be greater than under FATCA. This is principally because the “carve-outs” under FATCA for Australian financial institutions which only have local customer bases or low value accounts, currently are not specifically classified as exempt under the common reporting standard. No doubt there will be a push for consistency across the board in this regard, although there are countervailing arguments in this regard, some of which are referred to in the Treasury Discussion Paper..”………

  20. @Badger…

    Thanks for the Australian focus. Think I will send that to my brother-in-law who is in the financial sector (still asleep) in Australia…

    BTW, I just put up a longer post about the UBS trigger that let to GATCA on Jack’s blog here.

    http://disq.us/8jftry

    If I get around to it, it probably is time for a new posting about GATCA, as in many ways, that is the BIGGER deal now.

    It is ironic how Liberals and their so called ‘progressive’ taxation is leading us down the road to more and more restrictive, dare I say repressive regimes like FATCA come GATCA,

  22. @Just Me,
    I just saw your great summation at the JT site, and ironically was posting it here at the same time!
    It is thanks to you that GATCA and DATCA have gotten a wider layperson audience. I am sure that we here would have been following those issues except for your efforts to explain FATCA in the early days here at IBS, and to flag its offshoots and relatives.
    Much appreciated always!

  23. @Badger…
    Thanks. Not sure what good my comments or postings ever do to explain the larger picture of the evolving global dragnet, but appreciate that you highlight them from time to time.

    Have to run out today, but maybe I should take that JAT comment and make a new GATCA post as you have to be diligent follower of IBS comments (amongst all the spam) to find this one!

    BTW, I find that I am now deleting about 75% of email comments that come from following a thread, as they are all crap spam. I think it is time that some of us suggest that IBS go to a CAPTCHA regime to stop this as robot posting. I know the moderators are good at getting rid of it later, but frankly it is irritating, and turns me off on following any subject anymore.

  24. @all,
    My sentence in the above post July 27, 2014 at 12:53 pm should have read; “I am sure that we here would NOT have been following those issues except for your efforts to explain FATCA in the early days here at IBS……..”

    I was trying to highlight that many of us having the OMG moment would not have understood the importance of following the larger and evolving US and global contexts of US CBT without Just Me and other commenters flagging FATCA for us at the very beginnings of this site.

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