This article in the Washington Times (a conservative newspaper) found by JustMe provides some background information on the Republican Overseas Legal Challenge to FATCA effort.
The tweet that was sent out by Michael DeSombre (“Republicans Overseas will be launching legal challenge to FATCA”) did not mention that funds need to be raised for the U.S. legal challenge. I expect that the Republicans will be successful in raising the monies. My understanding is that there will be a separate organization related to Republicans Overseas raising these funds – similar to our own Canadian “ADCS/ADSC”.
Irrespective of whether you like Republicans, or worry about their motives, the world will better off if either Republicans Overseas or ADCS/ADSC is successful in killing the bad FATCA law.
Jim Bopp, the mean bulldog lawyer who would lead the charge mentions here some (but not necessarily all) of the U.S. laws that might be contradicted by FATCA:
Mr. Bopp told The Times that he plans to attack the act on three legal grounds: that it violates the Senate’s sole possession of foreign treaty power, the Eighth Amendment’s ban on cruel or unusual punishment and the 14th Amendment’s personal privacy guarantee.
Some research convinced Mr. Bopp that the act violates the treaty powers that the Constitution grants members of the U.S. Senate. The U.S. government has forged agreements with foreign governments to have their banks reveal all financial matters about their American customers or face huge penalties.
These country-to-country agreements are in effect treaties but ones that no U.S. department or agency bothered to seek the U.S. Senate’s advice on or approval for, he plans to argue.
Finding senators to serve as plaintiffs in a drive to get the Supreme Court to acknowledge the act’s unconstitutionality is task No. 1 for Mr. Bopp and the board of Republicans Overseas.
Mr. Bopp, as general counsel to Republicans Overseas, presented to its board two other constitutional objections: violation of the Eighth Amendment’s prohibition against unusual punishment in the form of gargantuan monetary penalties and violation of the 14th Amendment’s ban on unreasonable search and seizure of the financial assets of Americans abroad.
Republicans Overseas now wants a litigation vs. legislative approach:
“Seeking legal rather than legislative remedy on behalf of Americans living abroad before the scheduled July 1 full implementation of the law is the only available course for now,” said Solomon Yue, the Republicans Overseas chief operating officer and an Oregon RNC member.
The Republican Overseas position differs from that of Republican Senator McCain and Democrat Levin:
Mr. McCain and Mr. Levin see it differently. They not only want to sustain the law, but they also want to strengthen it.
In a joint report by their Senate permanent subcommittee on investigations, the two lawmakers signed on to a call for “the U.S. Treasury and the IRS [to] close gaping loopholes in FATCA that have no statutory basis.”
@George says:
“Can’t you see the pincer movement? The Charter Challenge in the North and the Republican Overseas in the South.”
See today’s Washington Times article on Republican efforts to kill FATCA.
4th amendment not 14th right????
@Brockers, couple of things.
1.) This should embolden the Charter Challenge!!! You/we are not alone in the battle. This is not England in 1939 it is 1942. We are on OFFENSE, not defense. Defense was scurrying around setting up a credit union account with a spare, good idea but still defensive.
2.) It looks like they want to do something before 1 July 2014, maybe an injunction? We need to tell or plant that seed with MPs.
3.) The Canadian Opposition should be emboldened by this as it makes the conservatives weak and on the wrong side of the road. I am amazed they have not backtracked to hedge their bets.
It may interest UK Brokers, that I have explored with two UK solicitor firms about setting up a similar UK legal challenge (raise funds etc.), however, these UK solicitor firms don’t get it. One was too busy with other cases, and the other saw it as a US tax issue, not UK.
My enquiries were brief and it would seem to be a case of finding the right firm. In a few months I may start to pick up the ball on this more seriously depending which country I ultimately land in.
Public awareness in the UK and on the Continent is very low and undeveloped. However once the banks start to attempt to extract the FATCA info from customers, I suspect they’ll eventually hack off the wrong person who will see this in the same light as fellow Brokers.
Harper’s arrogance will get the best of him in the end. “Pride goeth before destruction a haughty spiral before a fall.”
My understanding is that Stephen Harper is forcing some conservative PC to the Liberal Party of Canada. Spoke to an old friend yesterday who is a liberal party activist who mentioned this. Here is another example of how Harper has become an embarrassment: http://fullcomment.nationalpost.com/2014/05/05/andrew-coyne-pmo-has-created-another-needless-controversy-by-picking-fight-with-canadas-top-judge/
@George
“It looks like they want to do something before 1 July 2014, maybe an injunction?”
Where are you reading they want to do something before July 1–was that in the article?? I didn’t see it.
just saw this..
http://www.newrepublic.com/article/117652/shameful-irs-skips-crackdown-tax-cheats-swiss-bank-accounts
Looking at the arguments, I would think that this is somewhat of a long shot.
Senate’s sole possession of Treaty power. Good point, but do Republicans Abroad have standing? Even when Congress had a case where its war powers were clearly ignored (Clinton administration violating War Powers Resolution in the Balkans), a lower court amazingly argued that Congress did not have standing to bring the case forward. Part of the difficulty with this issue is that unless the Senate speaks with one voice on this issue, the courts may decide that it is really a political issue and back off.
On privacy issue, there is again the matter of standing: people will have to be subjected to unreasonable search and seizure first and then the Republicans will have to carefully select out a worthy plaintiff, preferably with a great name. It looks like the implementation is being delayed. Not surprising, since the banks I deal with don’t seem to have made much of a start on this. Yet again, the delay applies to the banks, not individuals.
http://www.newrepublic.com/article/117652/shameful-irs-skips-crackdown-tax-cheats-swiss-bank-accounts
http://www.irs.gov/pub/irs-drop/n-14-33.pdf
Cruel and unusual punishment. PFIC penalties are bad, but will the court consider them to be severe enough to be “degrading to human dignity”?
@p2w, here is why I wrote what I did, from the article;
““Seeking legal rather than legislative remedy on behalf of Americans living abroad before the scheduled July 1 full implementation of the law is the only available course for now,” said Solomon Yue, the Republicans Overseas chief operating officer and an Oregon RNC member.”
@George–I see, thanks. Then the next couple of months could get real inneresting.
@Publius,
I can’t assess the merits of the legal arguments very briefly mentioned in the WT article, but I think that it would be safe to assume that the U.S. laws contradicted by FATCA that Republicans Overseas litigators are considering would include but not be limited to those mentioned in the article.
@Don,
Staunch Obama supporter George Clooney is now engaged to Amal Alamuddin, she’s hailed as one of Britain’s best international human rights lawyers. Clients like the King of Barain and Julian Assange.
This from her firm’s web site:
“Doughty Street Chambers is probably the largest and most wide-ranging civil liberties legal practice in the world. Striving for access to justice, professionalism and excellence is the driving force behind everything we do.
They have openly congratulated the happy couple. Perhaps they’d like to know more about the “family” she’s marrying into.
@P2W, that was my reading into it. But it looks like their strategy.
The lawyers are heavy hitters so they know what they are doing and what they think can get done. They also have access to deep pockets for funds.
Would they need a Senator or simply an overseas US citizen to be named in the litigation? Sure they thought that out.
I would guess they would seek an emergency injunction from a lower Court.
I would wonder if they would cit international law in their arguments?
Anyways, it should cause Harper to pause and reflect. The right thing would be for him to step back acknowledge their is time now to do this right. Do not make it a confidence vote in the end and then let it take a natural course. A politician stepping back and taking pause can receive much forgiveness.
If they do not step back and a US Court puts on an injunction, then they risk a Charter defeat in court. That is a political firestorm brought on by themselves.
@Publius
Thanks for touching on what this legal challenge might be facing, but I believe that merely shining the light of day on the FATCA beast will go a long way in destroying it.
Supporters on both sides admit that FATCA as it is is unworkable. Are there enough loose threads in the FATCA tapestry’s warp and weft to unravel the whole thing? I think so!
@Bubblebustin, I think we could support a FATCA rework that defined offshore accounts as being outside your residence. As Clinton would have said, Its the homelanders stupid.
@George
I regularly tweet the Standing Committee on Finance about all such things as well as our “allies.” You can bet your boots this will continue.
@Don
Please do keep in touch regarding any legal challenges; I am aware of a few in Germany who are starting to think a legal challenge is the only way to go. I realize an EU court won’t fly in the UK but you mentioned “whichever country I end up in….”
us dot expat canada at gmail dot com
Thanks!
@George
No doubt. Of all the comments I’ve read by Carl Levin about offshore tax evasion, I haven’t seen any that make direct reference to Americans living abroad. We’re dynamite and he knows it. Better to stick to the script.
@Don – I have not researched the issue, but I do know that the EU has community-wide human rights standards. The UK has traditionally been like pre-Charter Canada and relied on Parliament and its sense of fair play etc to protect rights. Thus, if Parliament approves an IGA, it likely overrides existing anti-discrimination and privacy statutes. However, when Britain joined the EU, they inherited a Charter via the EU which has precedence over UK law. Among the issues that their Human Rights declaration addresses is national origin discrimination. There is quite a bit of jurisprudence about on the subject I know. Because the expat community in Europe seems to be smaller than Canada’s, the issue has not garnered much attention. However, the achilles heel of this whole world-wide effort is dual citizenship. When the European courts begin to realize that French nationals and Dutch nationals are actually being targeted by this nonsense solely because of their birthplace or that of their parents, I am convinced they will spring into action. Victoria’s blog from Paris strongly suggests that the French simply assume that FATCA doesn’t apply to French citizens. Remember – France won’t extradite French citizens pretty much ever. This is a pretty sacred sovereignty cow for them. The rules ought to be the same in the UK. If the EU and Canada carve dual citizens out of the FATCA structure, a pretty strong blow for fiscal freedom will have been struck and the US just might be impelled to re-examine this crooked institution of CBT.
@Anne Frank;
” When the European courts begin to realize that French nationals and Dutch nationals are actually being targeted by this nonsense solely because of their birthplace or that of their parents, I am convinced they will spring into action.”
Concur 110%
“Victoria’s blog from Paris strongly suggests that the French simply assume that FATCA doesn’t apply to French citizens.”
A French Citizen resident anywehere in the EU, is a French Citizen first and a EU Citizen second. The master nationality rule applies and I would guess that is their mindset.
Basically if you were born in Syracuse, so what who cares.
” If the EU and Canada carve dual citizens out of the FATCA structure, a pretty strong blow for fiscal freedom will have been struck and the US just might be impelled to re-examine this crooked institution of CBT.”
Its not a carve out for “dual citizens” because dual citizenship is NOT a status recognized anywhere. The USofA does not recognize a persons so called dual citizenship whilst in the USofA.
I think the EU would ultimately decide through the courts that FATCA is fine with respect for an IGA except place of birth is effectively struck done and master nationality is reaffirmed.
@George – I take your point re dual citizens. I am simply trying to get at the idea that the French et al imagine they are only being asked to “turn over” data about US citizens in their midst. They likely believe that they don’t have any, or very few. This is because they don’t consider as US citizens French citizens that are born in the US. I highly doubt London intends to send Boris Johnson’s bank data to the IRS. When they figure out the IGA’s refer to US law not EU law on determining who is a “US Person” and that the agreements they are implementing require them to violate the privacy rights of French and British CITIZENS, the scales will drop from their eyes. As I said, i don’t believe they understand what the US has conned them into signing because they can’t conceive of the silliness of the whole CBT structure. I continue to believe that in the end, the IRS is going to get about nothing out of this whole endeavour. Indeed, from a Canadian perspective, it seems likely that the main data transfer may well be for “pure laine” Canadians (how I hate that term!) who may accidentally have given their bank a Florida or Arizona address to be used during the three months per year they are snow-birding it down south!b Hey, US indicia….,
@Anne Frank, you may just be right that some in the EU do not think “duals” are impacted. Except for the compliance industry especially in the UK where some High Street Banks are IMO asking illegally place of birth.
@All, some more info from Facebook;
https://www.facebook.com/republicansoverseas/posts/254736114710191:0
@Anne Frank, spot on that those who do not know better are going to be fed to the lions.
I know some “duals” who proudly show off and proclaim they are AMERICAN and their blood is red, white and blue at every opportunity. Sitting in a bank I can see some clerk trying to give them leeway not to hang themselves and they hang themselves nonetheless.
@George,
“Victoria’s blog from Paris strongly suggests that the French simply assume that FATCA doesn’t apply to French citizens.”
Yet, AXA bank that started discriminated did it based on place of birth.
http://www.lepoint.fr/economie/axa-banque-ferme-les-comptes-de-ses-clients-americains-en-france-06-02-2014-1788961_28.php
The guy featured in this story is French, who had the misfortune to be born in the US. I wonder how much losses he had to take, when they closed his account.