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.”
@noone – pretty blunt letter from AXA. We should download that and get a copy to Joe Arvay. Per the article (for those that don’t read French) , the fellow was born in the US to a French student temporarily resident in the US. He was soon moved back to France, has lived in France his whole life, has no US connections whatsover and uses only his French passport (apparently once had a US passport that expired). In short, true blue French with a delicate veneer of the USA. His bank says to him that we have 720000 accounts and only 320 affected “american” accounts. So sorry, I know you’ve been our client for 10 years, but you have 60 days to pack your bags and leave our bank (PS – your loans FROM us are unaffected…). He is then given a letter inviting him to prove that he is NOT an American, including a W8-BEN (which he may or may not be able to read and understand as a Frenchman growing up in France – I’d be inclined to doubt it). He inquired about getting a CLN and was told that it couldn’t be done in the time he had available (before all his account closed). Let Robert Stack call it a myth – here is the actual letter and, by the way, it pretty much quotes the language of the IGA verbatim (in French of course).
Another satisfied IRS customer abroad.
@ George:
The link to the facebook article is an important one.
The interview with Solomon Yue yields very useful information for everyone. Of particular interest is the Republican Senate support as well as emphasizing that Sen Rand Paul was a lone voice for a long time but now has company in the Republican Senators signing on.
James Bopp, Jr. has an excellent track record.
It also mentions the part the Credit Unions have been playing in getting this monstrosity killed.
Interview with Solomon Yue:
https://www.facebook.com/republicansoverseas/posts/254736114710191:0
Solomon emphasizes that he feels China will not sign an IGA with the IRS because they do not want the Chinese People to know how the elites in China are getting away with what they are going to be hit hard with if China does sign an IGA with IRS.
Mythter Stack is sticking to his guns that any bank that closes a US account doesn’t understand FATCA. Sure it won’t stop having to report altogether, but it will decrease the number of people to report on – reducing compliance costs for the banks – and taxpayers for that matter (not that the banks care about that though).
Any bank that closes a US account probably understands FATCA very well — and they want nothing to do with it nor its target US Persons in their country.
@Calgary411:
You are exactly right about them understanding FATCA VERY well!
FWIW, today’s RT has an article on FATCA and efforts by the Republicans Overseas group to challenge its constitutionality. It is essentially a re-hash of the Washington Times article:
http://rt.com/usa/157140-bopp-scotus-fatca-tax/
I added a loonie’s worth (plus some metaphorical pennies) of my thoughts at the WT. This would be one place Mr. Bopp is likely to look for words of encouragement. Join in Brockers!
@Anne Frank & all
The EU washed its hands of FATCA at the EU parliament meeting on FATCA, run by Sophie Int Veld, on May 28th? of 2013. USA was in their meetings and strongarmed all of the countries in a divide and conquer strategy, so that all of the EU countries would be acting individually. The EU was happily willing to be castrated.
https://www.youtube.com/watch?v=zRoU-JNFhr0
It is very not obvious as to how one makes a charter challenge in Europe.
I’ve filed with the discrimination ombudsman in Sweden, and was immediately rejected (my immigrant friends told me that they reject everything).
The European court system is a big unknown not understood system.
To get anywhere, it takes a critical mass of motivated persons to drive something, and Canada is the one place where that is possible.
Indian immigrants have a mass and they are gettin’ their fatca whoopin’ already. Too bad they can’t be united with us. Otherwise, people are literally spread out over the map and hard to join together.
There are waaaaay too many of us in Canada to ignore. Apparently there are more in Mexico, but I get the impression that too many of them are pretending to still be resident in the US to want to unify themselves.
@ Admin
Just testing to see if comments are back on again. Also it looks like a whole new thread disappeared — “Calling Chuck Schumer: Canadian Conservative MP Gerard Keddy tell US citizens in Canada to RENOUNCE”.
@Em, that thread is pending review. I did that.
@Em
I need to do some more work on that thread. I need to get the video and transcript of the meeting. All of this is moving faster than I can keep up.
@ Petros & Tim
Okay. Long as I know I wasn’t imagining things. Carry on!
@Em
The gist of what Keddy was saying i.e you should give up your US citizenship if you don’t like FATCA but I don’t have a video or transcript of that yet.
@Anne Frank
Was the IGA voted on by Parliament or was it just the result of negotiations between HM Treasury and the US? I just wonder if it had the scrutiny of the Lords to have a look at the fine print. I can’t see how an IGA can override the Equalities Act (at least to a High Court or Court of Session judge).
A bank requiring nation of birth would probably be a breach of the Equalities act, and denial of service would based on national origin would certainly be a breach. Aside from the general monstrosity of the IGAs, I think part of the problems with the banks is their (1) their interpretation of the IGAs and (2) the advice they are given by the ‘compliance consultants’ and their own interpretation.
@Brockers; more fallout
http://www.zerohedge.com/news/2014-05-06/exactly-how-you-destroy-banking-system
@Anne Frank
More on what has been going on in France from today’s Huffington Post, in English:
http://www.huffingtonpost.com/fredericlefebvre/facta-a-reminder-of-the-s_b_5275449.html
@Creature, it was passed by Parliament part of a budget bill.
As you know we agree on all else you noted. Its the compliance industry hence why some firms ask place of birth and others simply wait and see what you present to open an account.
Because some UK firms are blatantly asking and some are blatantly not asking that tells me someone is wrong!!
I agree there is likely an Equalities Act problem.
@CreatureOutside, riddle me this. A British Citizen resident in the United Kingdom has clinging nationality with one or more other other countries which could include the USA, Brazil, Cuba or any number of other countries.
Said British Citizen goes to his local financial institution and is asked “What is your citizenship?”
What is the appropriate answer that can be given in the United Kingdom?
We know that The Home Office in its publications cites the Master Nationality Rule;
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/267945/dualnationality.pdf
“Commonly known as the “Master Nationality Rule”, 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. ”
So while a national is in State B he has “no right” to claim protection or any status from State A just as State A has no right to that person as its national.
We know that the United Kingdom is and remains a signatory to “Convention on Certain Questions Relating to the Conflict of Nationality Law” dated 13 April 1930;
http://www.refworld.org/docid/3ae6b3b00.html
As the UK is and remains a signatory to the 13 April 1930 Convention, I am of the opinion that a British Citizen resident in the United Kingdom can only be regarded as a British Citizen and NOTHING else.
@George
3. Master nationality rule. That is also my interpretation. Seems very clear:
“person is a national of… States (A and B), and is in territory of State A, **then State B has no right to claim that person as its national** or intervene on that person’s behalf”. If that is the position of the Home Office, then it is entirely reasonable for any UK citizen resident in the UK to list their citizenship as British and by doing so would be following the HM government adherence to the master nationality rule.
@George – ZeroHedge makes a pretty cogent point, similar to what I have been saying for some time. Win or lose on FATCA (and I suspect that Treasury is a long way from “winning”), they have dealt a body blow to the role of the US dollar and US banks in the world system going forward. That role was based on tangible and intangible things. The tangible – predominance of US economy post-War, glut of dollars in circulation due to US trade deficit (esp. petrodollars) and quiet acquiescence of oil powers reliant on US defense umbrella (esp. Saudi Arabia) is mostly gone now. US will be the #2 economy next year in all likelihood. Saudi Arabia is so disenchanted with Obama that they can’t see straight due to Syria (among other things) and the US imports less oil anyway. The intangibles are those same features that have continued to keep London as a world finance centre seventy years after her empire crumbled: a well-earned reputation for discretion, predictable rule of law and allowing business to be conducted. These foundations are severely challenged with FATCA as well since it is a brazen US imposition upon the rest of the world coupled with a threat to use their financial position to exert pressure, even on allies. The world is sitting up and taking notice and will do what markets do best when faced with an obstacle: find a way to circumvent it. The dollars days are numbered – not in days or even weeks, but its influence has been severely corroded by this, regardless of the outcome.
@Publius – nice catch from Huffington re France. As i said, start stomping on French citizens in France and watch the fur fly. This brush fire will catch.
I think 14th Amendment would be most useful against CBT. If the Republicans are serious about getting expat donations and votes, they need to attack all three: CBT, FBAR and FATCA. That will bring them a major windfall in funding and votes from expats for sure.
14TH AMENDMENT
PRIVILEGES AND IMMUNITIES CLAUSE
The Privileges and Immunities Clause of Article IV, Section 2 of the Constitution states that “the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.” This clause protects fundamental rights of individual citizens and restrains state efforts to discriminate against out-of-state citizens. However, the Privileges and Immunities Clause extends not to all commercial activity, but only to fundamental rights.
EQUAL PROTECTION
The Equal Protection Clause of the 14th amendment of the U.S. Constitution prohibits states from denying any person within its jurisdiction the equal protection of the laws. See U.S. Const. amend. XIV. In other words, the laws of a state must treat an individual in the same manner as others in similar conditions and circumstances. A violation would occur, for example, if a state prohibited an individual from entering into an employment contract because he or she was a member of a particular race. The equal protection clause is not intended to provide “equality” among individuals or classes but only “equal application” of the laws. The result, therefore, of a law is not relevant so long as there is no discrimination in its application. By denying states the ability to discriminate, the equal protection clause of the Constitution is crucial to the protection of civil rights. See Civil Rights.
Generally, the question of whether the equal protection clause has been violated arises when a state grants a particular class of individuals the right to engage in an activity yet denies other individuals the same right. There is no clear rule for deciding when a classification is unconstitutional. The Supreme Court has dictated the application of different tests depending on the type of classification and its effect on fundamental rights. Traditionally, the Court finds a state classification constitutional if it has “a rational basis” to a “legitimate state purpose.” The Supreme Court, however, has applied more stringent analysis in certain cases. It will “strictly scrutinize” a distinction when it embodies a “suspect classification.” In order for a classification to be subject to strict scrutiny, it must be shown that the state law or its administration is meant to discriminate. Usually, if a purpose to discriminate is found the classification will be strictly scrutinized if it is based on race, national origin, or, in some situations, non U.S. citizenship (the suspect classes). In order for a classification to be found permissible under this test it must be proven, by the state, that there is a compelling interest to the law and that the classification is necessary to further that interest. The Court will also apply a strict scrutiny test if the classification interferes with fundamental rights such as first amendment rights, the right to privacy, or the right to travel. The Supreme Court also requires states to show more than a rational basis (though it does not apply the strictly scrutiny test) for classifications based on gender or a child’s status as illegitimate.
The 14th amendment is not by its terms applicable to the federal government. Actions by the federal government, however, that classify individuals in a discriminatory manner will, under similar circumstances, violate the due process of the fifth amendment.
@Tim:
Your Comment:
“The gist of what Keddy was saying i.e you should give up your US citizenship if you don’t like FATCA but I don’t have a video or transcript of that yet.”
Yes, I watched that last week and was outraged at Keddy’s nonchalant attitude about it. The IGA is to protect Canadian citizens. If one is a US Citizen in Canada, regardless of permanent residence status, and you don’t like what the IRS plans for you, well you just go out and renounce. No indication he had ANY idea what that entailed nor any indication whether or not he understood the ramifications of just what he was saying:
Canada could not care less if you are concerned about being a US Citizen in Canada. NOT our problem.
NOR is it their problem it would seem from their attitude that IRS can designate “US Person” in any way they see fit and this bunch of spineless idiots are going to let them get away with it. They have done their best to protect the banks and the rest of us can straight to hell.
His body language alone made that clear that is at least his personal attitude if not the government’s attitude.
From the entire session it is clear they both know not what they are doing and they don’t want us to know that. Because they don’t care, plain and simple. This is a problem at the very least the government should have made a priority of everyone understanding so they could actually do the job they were elected to do: Protect and defend Canada and everyone in it.
And isn’t it a sad comment that the only people who are actually learning about and doing something about FATCA for Canadians IS the NDP.
Liberals, except for Scott Brison , are silent and Trudeau has also exhibited that nonchalance about it all. Just not a problem for him.
The reality is that FATCA, unless defeated entirely, can and will destroy the Canadian economy.
I believe Trudeau was quoted saying that FATCA only affects dual citizens who’ve worked in the US.
Saying we should just renounce is like saying that if you don’t like your car getting broken into, don’t drive. Where does that put law enforcement? Where does that put him?