The latest Report on Active Records in the NICS Index, released a couple of days earlier than normal, shows 24,220 records in the “Renounced U.S. Citizenship” category, down by two from the February 2014 report. (On the other hand, the number of people who were caught trying to use an ex-citizen’s identity to buy firearms has reached 61, according to the Federal Denials Report).
Months in which zero records get added to the renunciations category are hardly a rare occurrence; the most recent such case before this was in December 2012. That was also the same quarter for which the IRS reported a laughably implausible total of 45 people giving up U.S. citizenship or long-held green cards. This suggests that the problem was at the State Department, rather than any of the downstream agencies: after the CLN overseers in the Bureau of Consular Affairs handed more than three thousand ex-citizens’ records over to the FBI in October to clear up their backlog, they apparently decided to go into hibernation and put off all their work until the warmer seasons when acorns resumed their traditional abundance and they could feast to their hearts’ delight.
Comparisons with other countries’ data
Our previous assumption that the FBI & Federal Register numbers could be used to check each other’s data quality rested on the belief that the IRS was the source of the problems in the Federal Register list. But if the problems are at State, all bets are off, especially since State has repeatedly refused to accomodate FOIA requests from Global News and Shadow Raider for information on the total number of CLNs issued. Instead, we have to look to non-U.S. data to try to understand trends in renunciation of U.S. citizenship.
In comments to the previous post on NICS, Innocente did some analysis on the latest Eurostat figures on “Acquisition of citizenship by sex, age group and former citizenship” in 2012, and found that “Seven of eight [European] countries showed an increase in naturalization by US citizens for the year 2012 vs. the average for 2007 to 2011”; across the eight countries, naturalisations by U.S. citizens increased by roughly one-fifth, from five thousand per year in the earlier period to six thousand per year in 2012.
| Country | Naturalisations by U.S. citizens | |||
|---|---|---|---|---|
| Average until 2011 | 2012 | Increase (Decrease) |
||
| Since year | Amount | |||
| Ireland | 2008 | 119 | 263 | 121.0% |
| Netherlands | 2007 | 217 | 315 | 45.0% |
| United Kingdom | 2007 | 2,722 | 3,345 | 22.9% |
| Germany | 2007 | 653 | 764 | 17.0% |
| Switzerland | 2007 | 297 | 335 | 12.9% |
| Sweden | 2007 | 339 | 371 | 9.5% |
| France | 2007 | 512 | 528 | 3.0% |
| Belgium | 2007 | 146 | 138 | (5.5%) |
| Total | — | 5,005 | 6,059 | 21.1% |
Of course, most of those people probably have not given up U.S. citizenship. Even in Germany, a country which is traditionally viewed as disallowing dual citizenship, from what I can understand of the Federal Statistical Office report on the subject, among 756 naturalisations by U.S. citizens in 2012 (slightly greater than the total of 754 they indicated to Eurostat), only 83 (11%) occurred under legal provisions which would forbid the applicants to retain their earlier citizenship.
However, naturalising outside of the U.S. is another one of those steps, like not registering your childrens’ births with the U.S. consulate, which opens up more possibilities. Mentally, it constitutes recognition of the fact that you really are a member of the society in which you live and that you may be spending the rest of your life there, regardless of your ancestral ties to another country. And legally, it means that if FATCA or other laws really make it impossible for you to continue living a normal life in the country of your choosing, you have another option besides surrendering and moving back to the Homeland: you will know that you can give up your U.S. citizenship.
I was told in September that my CLN would take four to six months. At the four month mark I wrote to consular services. I was then told they are backed up with “hundreds of these” and now it would be nine months to a year. There is most certainly a hold up.
Also have been contacted by five people this month who are in the process or just entering it. One person is someone in my life who I had not even known was American. From the sounds of things even just locally here there are a lot of people just waiting or backed up in the system.
At what point does this become politically unacceptable? This entire process is a joke. It was put in place when a hundred or so disaffected Americans per year wanted to renounce and it didn’t even cost anything then. Now there are probably tens of thousands wanting out and they are swamped. What a cheek to charge US$450 for a so-called “service” and then make people wait months, or years, for a piece of paper that could have been handed over at the time of the appointment.
In other words, the sort of response that you would expect from a banana republic.
maybe a FOIA request to determine the total revenue amount collected for $450 fee could be illustrative of matters at hand?
Eric, thanks for your continued work on this.
Obviously, people in the U.S. State Department really don’t want it to be known how many U.S. citizens are giving up their citizenship. The numbers are, to say the least, embarrassing to them. If it weren’t for previously legislated reporting requirements such as the NCIS database and the quarterly Federal Register list, they could keep the numbers entirely secret. As you mentioned, Freedom of Information requests have been rejected. There has also been a request at Data.gov “under review” since February 2013 to report the actual numbers of CLNs approved, with no response yet:
https://explore.data.gov/nominate/2412
I wish there were some way to get more publicity about the fact that the U.S. State Department is deliberately trying to hide the true numbers of U.S. citizens who are giving up citizenship.
One thing that might explain the large jump in Ireland is that Ireland likes keeping up its ties with its diaspora and has had quite generous rules about granting citizenship to the descendants of its numerous emigrants. I have had Irish citizenship since the late 1980s through Irish grandparents. I was living in the U.S. at the time and my mother though it might be useful someday. I wouldn’t have my current job without it because of EU hiring rules. I even get to vote in UK elections. Went there on vacation last summer and had a brilliant time. Lovely people, too.
@dusty: “maybe a FOIA request to determine the total revenue amount collected for $450 fee could be illustrative of matters at hand?”
The DOS should have these figures. According to this Federal Register link, the “Number of fees collected in FY09” was: 1,188 x $450 = $534,600 (see embedded chart, about 90% on document, line item “8. Documentation of formal renunciation of U.S. citizenship):
https://www.federalregister.gov/articles/2010/06/28/2010-15622/schedule-of-fees-for-consular-services-department-of-state-and-overseas-embassies-and-consulates#h-17
@Eric, Thanks for your excellent write-up and insight.
The 2013 Swiss naturalization figures for Americans are: 457, an increase of 122 over 2012 and a 65% increase over the five-year average from 2007 to 2011.
http://www.ejpd.admin.ch/content/dam/data/migration/statistik/auslaenderstatistik/einbuergerungen/ts25-einbuergerungen-vorjahr-d.pdf
Switzerland allows dual-citizenship but, as Eric mentioned, naturalizing gives you “another option besides surrendering and moving back to the Homeland: you will know that you can give up your U.S. citizenship.”
@Eric:
1) The FBI NICS indices for Dec 31, 2013 to Mar 31, 2014 show several anomalies:
10. State Prohibitor:
Dec 2013: 10,072
Jan 2014: 10,271
Feb 2014: 10,353
Mar 2014: 15,567 !
12. Protection/ Restraining Order Domestic Violence:
Dec 2013: 5,321
Jan 2014: 5,262
Feb 2014: 5,352
Mar 2014: 10,371 !
As a hypothesis, which cannot be readily tested, it is possible that the March 2014 input for category “9. Renounced US Citizenship” has been misclassified to categories 10. and 12.
2) German naturalization statistics:
Thank you for the link and the write-up. The naturalization statistics contained several surprises, including:
a. Although Germany is known for not allowing naturalizing citizens to retain their former citizenship, overall 50.0% did and 50.0% did not in 2012.
b. For American citizens, as you pointed out, 89.0% retained their US citizenship in 2012.
c. The primary category for US citizens naturalizing in Germany is: “Art.116 Abs.2 S.1 GG, Frühere deutsche Staatsang.” which is for ex-Germans or descendents of ex-Germans who forcibly lost their German citizenship from 1933 to 1945 (generally, Jews, Communists and other undesirables). 592 of a total of 756 Americans who obtained German citizenship in 2012 used this category, which also allows naturalizing citizens to retain their other citizenship.
d. Interestingly, while 592 Americans used this “ex-German” category to naturalize in 2012, the German Statistical Office records for 2012 show that a total of 172 naturalizing citizens, which would include the Americans, were used it. This of course does not make sense.
Until FATCA and the diaspora tax and FBAR crackdown, many Americans in Europe were content to live with US citizenship and a permanent resident permit. An obstacle to obtaining a European citizenship has been the strict or general prohibition against dual citizenship in some countries such as Austria, Denmark, Germany, Netherlands and others.
According to Wiki, Belgium prohibited dual citizenship for naturalizing citizens until 2008. Lifting this prohibition may have had a moderate impact on American citizens decision to naturalize although, across all citizenships, there appears to be a limited effect:
Americans naturalizing in Belgium:
Ave. Annual 2003 to 2007: 123
Ave. Annual 2008 to 2012: 149
21.1% increase since the dual citizenship change in 2008
All citizens naturalizing in Belgium:
Ave. Annual 2003 to 2007: 33,580
Ave. Annual 2008 to 2012: 34,702
3.3% increase since the dual citizenship change in 2008
Still, considering that there were 15,999 people living in Belgium in 2013 who were born in the US, the rate of naturalization at 0.9% appears rather moderate (using the 2008 to 2012 average).
America’s prohibition on second nationalities is an ‘unlaw’.
http://samuelclemmons.wordpress.com/2014/04/03/fatca-enforcing-the-unlaw-of-the-land/
I’d be curious to collect views on what people think about the necessity of getting a CLN for someone who is either a) dual at birth and wishes to rely on some past event (eg. civil service position) as an expatriation event; or b) naturalized Canadian. Common assumption is that the person is not looking to live in the US nor can they seriously undertake the risk of starting the process of complying with the IRS given risk of FBAR penalties, RRSP and RESP taxes, etc.
My take has been – and I am certainly prepared to consider alternative views – there is simply no reason to put oneself on the radar screen with these thugs. Granted State and IRS are different beasts and relatively uncommunicative with each other. However, why rock the boat? If you expatriated pre-1994, you didn’t have any obligation to notify anyone anyway. If you did so afterwards, it is still effective even if the Tax Code won’t give effect to it until all exit taxes etc paid. So, if you are not going to enter into the Gulag for the purposes of divesting yourself of all assets and submitting to the tender mercies of the IRS, why give the US government a current name, address and target to shoot at? I don’t think FATCA really changes things – there is every likelihood that Canada is simply going to accept self-certification of non-US Person-hood and be done with it and by and large is going to play “don’t ask, don’t tell” as far as place of birth and US taint is concerned. That certainly is what the draft implementation guidelines suggest. As for crossing the border – well, as long as you don’t buy any assets in the US, I see no risk of the border getting closed. That could change of course, but I really do think Canadians are, in effect, by-catch in a wrong-headed US policy that really has a different target. I feel that the US are not going to undertake heroic efforts to be strict-interpretationists vis a vis Canada, but I could be wrong. In short, I don’t see how having a CLN -even a backdated one – is going to improve the situation of anyone who has no intention of writing big cheques to the IRS.
I recognize and respect everyone has to make their own way in consideration of their own circumstances. However, as a relative newbie to this bizarre world of hiding one’s heritage, I think a useful thread (and this really should be its own thread: I don’t know how to start one!) would be to get points of view on this question.
I have literally dozens of friends, relatives and acquaintances, many of whom I only recently discovered has US stains on their heritage (not the relatives, obviously!). I have generally given the point of view described above. if in doubt, I have suggested to some that they may wish to get a notarized declaration of expatriation to wave in front of a hesitant bank if they want to impress them, but not to go anywhere near the US Embassy. I think the reason we are only seeing a few thousand CLN’s per year instead of hundreds of thousands is that people are simply staying underground and have no intention of submitting in any manner, shape or form to the US’s claims against them. Anyway, nuff said on my part. Just wondering what the collective views are.
@Ann Frank
I agree. People will modify behaviour accordingly depending on their tolerance for risk, and any choice they make will have its price.
Ann Frank. Congrats! You are a voice of reason in a sea of pessimism, rumour, and paranoia.
The revenoors simply don’t have the resources to go after more than a tiny tiny fraction of potential targets. Like Willy Sutton, they will go where the money is. – Switzerland, Israel, etc. They will concentrate on Americans living in America.
Everyone should listen to what Mr. Flaherty was telling us. Canada is going to do as little as possible and treasury knows it full well.
The banks, by and large will do as little as possible as well.
A policy of lying low is quite reasonable. After reading the IGA, there are simple steps to be taken. At this time there is no reason to fear crossing the border, FATCA will implode. RBT won’t.
@Duke of Devon
Sure, that may be true, but it won’t stop the IRS from making examples of some Canadians just to keep the fear levels up. Every year has the potential of bringing a fresh crop of low-hanging fruit, ripe for plucking. I also believe that there will be varying degrees of scrutiny between financial institutions, dependant on each’s risk tolerance. Don’t forget that FFI’s are terrified of FATCA – why would they suddenly feel comfortable with a wink and a nudge with their extortionist?
Re dual citizenship: I naturalised in Belgium in 2002 and maintained dual Belgian-US citizenship for 12 years, until… today when I gave one up. Guess which one?
@Anne Frank. General agreement with a few foot notes.
1.) For a relinquisher that has a CLN, wants a CLN or fears getting a CLN, all three need to build the most solid file possible with all stray sheets of paper inside. Document, document, document.
They then must not do anything American. If they have any licenses in the USA for anything, they need to be cancelled. Registered to vote? Do not ever vote and maybe get removed from the voting roles. US Passport? Let it expire or return it to DOS for cancelling.
I like your idea of a notarized statement, we could call that a LOR or Letter of Relinquishment.
In the alternative take the above file to a lawyer and ask for their opinion if you have satisfactorily relinquished your citizenship. Get a letter of relinquishment from your lawyer as that could be presented as well. I have such a letter that I got for an entirely different reason.
@Duke of Devon. But that also means not going boldly where others have gone before you.
1.) I have already talked to my children to never ever talk about them being American or their parents being such. I am shocked as I look back at that.
2.) You need to solely use financial firms with a local client base and avoid the transnationals. Boy, you guys in Canada are stuffed because of TD, BMO and RBC.
3.) Going to the USA for anything, strike it off the list.
@bubblebustin. My biggest fear is not the bank or the politicians.
My fear is the compliance industry who will stoke the fire of fear.
I am sensing on this side of the pond, that the compliance industry is encouraging an overzealous interpretation of the IGA.
It is NOT a requirement of the IGA to ask place of birth here yet that question is being asked. So either someone in the UK has it wrong or the CRA has it wrong in the draft guidance. Remember the UK and Canada agreemenets are BOILERPLATE fill in the blank documents, nothing was negotiated.
@ Jane Doe beige
I’m pretty sure I know which one — congrats — you made a good choice. I just checked the weather forecast for Belgium and what a happy coincidence, it says the sun is shining. 🙂
@ Anne Frank
Cool, calm and collected. I like that!
We have had bad politicians, bad laws and bad policies before now, but we have the worst combination ever the last 5 years plus a few months. They are all based on Saul Alinsky’s little book that borders on the same book Chairman Mao used when subduing the Nationalist Chinese. Alinsky’s book is called ”The Rules For Radicals” and Chairman Mao,s was simply,”The Little Red Book”. Socialism in any form, be it National or International, is harmful to freedom and capitalism, which go hand in hand.
Mindless Drones keep electing these National Leeches and will surely bring down the house with a Sampson Like collapse.
@Anne Frank, as I see it, the value of getting a CLN really depends on where one was born and when (if ever) one relinquished U.S. citizenship. If, like me, one was born in the U.S., then a CLN is necessary to officially shake off the clinging residue of U.S. citizenship.
For example, my Canadian passport indicates that I was born in the U.S. Several times when I was still traveling to the U.S., border agents told me that I should be entering the U.S. on a U.S. passport. If and when I ever go there again, I will take a copy of my CLN to prove that I am no longer a U.S. citizen.
Also, there could be questions from the Canadian Revenue Agency or Canadian financial institutions that I deal with, or even from the IRS, asking for my (former) U.S. taxpayer identification number (aka Social Security number). Having my CLN showing that I relinquished US citizenship in the 1970s will enable me to reject such requests with official evidence.
For a person who was born in Canada and who may have U.S. citizenship only by parentage and never exercised, the situation is quite different. In such cases, acquiring a CLN may indeed be more trouble than it is worth.
@Anne Frank
This is me: a) dual at birth and wishes to rely on some past event (eg. civil service position) as an expatriation event;
I have a US birthplace, and my bank manager knows this. I expatriated before 1994, but want the official CLN to show as proof.
@mykitty, I think you need a new bank before you get the CLN. Just saying…
@Anne Frank
This issue is on my mind constantly. I fall into your 1st category – dual at birth (born in USA to a Canadian parent, came to Canada as a baby, have only lived in Canada, only as a Canadian – I have never worked or lived in the US and have never acted as US citizen in any way – I have no SSN, no US passport etc.) I have never considered myself to be a “real” American. For much of my life I wondered if I really was a true US citizen. I now know, thanks to FATCA, that the US definitely considers me to be a true US citizen! I cannot envision trying to properly comply with US tax filing requirements. Apart from the principle of moral outrage on succumbing to extortion, the practical financial risk is intolerable. If the US is going to ruin my life they can confiscate my money and throw me in prison (should they find a way to do these things) but I will not voluntarily hand money over to them or the compliance industry.
We are now caught in a world of uncertainty and the inherent unpredictability of how the future will play out – the risk of exposing oneself to the USG in trying to get a CLN vs the risk of being exposed to IRS by a Canadian FI. We don’t know how the FI’s will act, and there may be variability across the spectrum from laissez faire “don’t ask, don’t tell” to extreme overzealousness. I know that I look like any other Canadian in my FI’s databases. I don’t live in a large city (though not a small town) and I’m starting to worry that the biggest risk to me is someone who works at a bank etc. finding out through local gossip that I was born in the US, as a number of friends and co-workers have known for years about my birthplace. The party line from everyone with power (the Canadian gov’t, the banks) is that we are US taxpayers and that we have to file US taxes, for we are “Americans resident in Canada”. I fear the feasibility of trying to convince some bank employee that I relinquished years ago without the official documentation of a CLN. Will FATCA be a big fizzle in Canada with few accounts reported? (ex. only US residents with Canadian accounts) or will it be a nightmare for thousands of Canadian citizens and residents? Only time will tell.
I don’t like living with the feeling that I have to hide this horrible secret, even though I’ve done nothing wrong. I also am so disgusted with the USG that I want to officially NOT be a US citizen. I am working towards trying to get a CLN based on past relinquishing acts (the vast majority of my working income comes from the provincial government – starting before 1994 , and I am also paid a little by the federal government, even though I am not officially a civil servant).
I think that I would rather have the IRS know my name, DOB and address, assuming the State Dept. hands over this info. on everyone who tries to get a CLN (and I guess we should assume that they do this), than have the IRS know my personal data AND my account balance. Yet it’s hard to to reconcile a CERTAIN exposure on going to the Consulate vs a POSSIBLE BUT MORE DAMAGING exposure by a bank.
I am getting the government letters and am helped by the total lack of US citizen actions on the 4079 form. My next planned step is to see Mr. Richardson and get his opinion on the chances of my relinquishing strategy being successful. I still really don’t know what the best course of action is but I know that the best outcome would be to get a CLN and officially be free.
@mykitty
If I was in your position I would definitely get every cent out of that bank and open a new account at a bank where no one knows you. I would do this right away before the rank and file bank employees learn about FATCA. I have opened new accounts in the last month and so far there has not been a hint of FATCA or US personhood.
@Anne Frank, you say State and IRS are not co ordinated. Not yet. I think they will be and are quickly working on data systems that are much more coherent than what is in place now. In fact I suspect data sharing on a much larger and integrated scale is what we’ll see ala what the NSA can already do.
For some I think they can go under the radar for now but, not forever. However, having said that there may be a chance if you go free for ten or more years FATCA could be amended to make things more reasonable. I just didn’t want this hanging over my families head for that long.