On July 2 2014 my understanding is that Canada’s banks will be asking (at least) new account holders questions and employing a variety of approaches to establish U.S. personhood. These questions will violate Canada’s Charter Of Rights and other laws. Many of us also wonder whether the Silent Majority out there feels that such questions have no consequence.
Coming to a Canadian bank near you?
We need to know the actual questions and approaches and are focusing first on questions about U.S. personhood that will be asked by Canada’s major banks when Canadians open a NEW PERSONAL CHEQUING account after July 1. I suspect that different banks may ask different questions.
When you have this information, please provide in your comments these questions to be asked and I will update the top of this post.
[Please also read the disturbing comments below from @Pollyanna, who reports that one Canadian bank actually used information provided in casual conversations with the account manager to help establish whether the account holder is a U.S. person.]
My local Canadian bank branches provide this information on U.S. questions asked or not asked when opening a new account (this info may all be incorrect; please correct):
SCOTIA BANK: “Are you a U.S. person for tax purposes?”
http://www.scotiabank.com/ca/en/0,,6098,00.html
TD BANK CANADA TRUST: “Are you a U.S. citizen” AND “Where were you born?”
TD’s web information page: http://www.td.com/fatca/index.jsp
See: LM Correspondence with CustomerCare, TD for others to consider in relation to their own FFI’s web information and their relationship with their FIs.
HSBC CANADA: “Do you hold multiple citizenship” AND “What is your place of birth”
http://www.expat.hsbc.com/1/2/hsbc-expat/services/expat-tax/tax-matters/fatca?WT.ac=HBIB_14_5_29_home_small_pro_FATCA_Find_out_more
NEW HSBC information consent
CIBC: Local branch will receive info July 2.
Note: the link below is for CIBC World Markets, which deals with Wholesale Banking (Corporate & Institutional) as opposed to Retail Banking (Personal & Small Business). We have yet to see a CIBC FATCA page specifically written for Retail Banking clients. Perhaps as of July 2, once local CIBC branches receive info, there will be such as page on the CIBC website.
http://www.cibcwm.com/cibc-eportal-web/portal/wm?pageId=fatca&language=en_CA
BMO: “Do you have any other citizenships” (tentative per @Anne Boleyn)
http://www.bmo.com/home/about/banking/foreign-account-tax-compliance
RBC ROYAL BANK:
http://www.rbc.com/aboutus/fatca.html
I would be very skeptical of this information:
“If you open a new account and provide two pieces of ID that are not U.S. tainted and do NOT INCLUDE A CANADIAN PASSPORT (e.g., Canadian driver’s license and social insurance number are ok) and the bank has no other evidence to indicate that you are a US person (e.g., you never told the bank by mistake) no U.S. questions will be asked.
However, should you PRESENT A (TOXIC) CANADIAN PASSPORT at the time of opening an account, YOU WILL BE ASKED whether you do or do not have a U.S. place of birth.”
The way to stop the questions from being asked is to go to:
@George in response to @Whatamiwrites:
http://isaacbrocksociety.ca/2014/06/26/please-provide-in-this-post-questions-big-canadian-banks-will-ask-new-account-holders-on-july-2-2014/comment-page-17/#comment-6170178
In my view George is 100% correct. Canada was faced with the question of:
“To sign the IGA or to not sign he IGA that is the question. Whether tis better to commit suicide and to guarantee that the country will cease to exist as a sovereign nation or to take a chance (which I believe is totally remote) that it would not”.
To be perfectly clear (as a prominent Democrat would say), the decision to enter into the IGA was made by the Canadian banks (who were able to influence the government) and NOT by Canadians in general. Clearly, the banks are quite happy to hurt Canada to “help” themselves. The banks fingerprints are all over the IGAs (the proof being the differences between the clear delineation of what they are REQUIRED to do and what they are ALLOWED (turn over everything) to do.
Was the IGA the right thing for Canada?
Absolutely 100% NOT.
One must understand that FATCA IGAs are really the equivalent of OVDP for countries. Here are some excerpts from a post that I wrote in September of 2013 ago on this topic:
http://isaacbrocksociety.ca/2013/09/28/we-are-not-alone/comment-page-1/#comment-558253
I followed this up with a separate post at:
https://renounceuscitizenship.wordpress.com/2013/10/11/the-fatca-iga-aka-ovdp-for-countries/
As I reread this comment 22 months later, I continue to believe very strongly that Canada should NOT have signed the FATCA IGA. I don’t believe that USA would have withheld on anything. The macro implications would have been too huge. Had they withheld, even a “five year old in a sandbox” would have seen FATCA for what it really is and the Democrat administration in Washington for what it really is.
The USA knows what the repercussions of withholding the 30% will be. That’s why they are “deeming” countries to be “FATCA Compliant” (through “pretend IGAs”).
If you accept my analysis that a FATCA IGA is nothing more than an OVDP program for countries, then I leave you with the following two questions:
1. How many individuals who entered OVDP regretted it?
2. How may Swiss banks who entere OVDP for banks regretted it?
The United States of America, under the Democrat leadership of President Obama has became so abusive, that FATCA compliance is probably far worse than non-compliance.
I recognize that I am in an extreme minority in taking this position. That said, any dealing with the United States is a choice between two outcomes. The FATCA IGA is a guarantee of suicide. Personally, I would opt for the choice that leaves a chance of living.
Only an idiot would commit suicide to avoid dying. That’s what the Government of Canada did.
Of course, the Canadian banks (who don’t care the slightest bit about Canada) would never agree to that.
@WhatAmi
No. I have never worked for the government. Private sector my whole life.
@Portland PLC:
I believe you are correct that only diplomats were exempt. It is the Canadian law that says I’m a Canadian citizen due to my father being in the military. Apparently The Americans don’t care about our laws.
From the cic.gc.ca website:
I am Canadian. My children were born outside Canada. Are they Canadian?
Every situation is different. This answer is just a guide. The official way to find if your child is a citizen is to apply for a proof of citizenship for them.
This question is only for people who were citizens when their children were born. If you got Canadian citizenship after your children were born, your children did not automatically become citizens because you did.
On April 17, 2009, the rules changed for persons born outside Canada to a Canadian parent. Pick the situation that applies to you.
My children were born before April 17, 2009
There are a number of laws and rules that affect if your children are Canadian. They probably are because most children born to Canadian parents before April 17, 2009, were citizens at birth.
Use the scenarios in the instruction guide for Proof of Citizenship to see if they are Canadian.
My children were born on or after April 17, 2009
Your children will only be Canadian at birth if you:
•were born in Canada, or
•became a naturalized Canadian citizen before they were born. (If you were adopted, see the exception below.)
There are exceptions to these rules.
You were born outside Canada and adopted by a Canadian
Your children born outside Canada will not be citizens if you were:
•born outside Canada,
•adopted by a Canadian citizen, and
•became a Canadian citizen using the citizenship process for intercountry adoption.
However, if your children’s other parent was born in Canada or is a naturalized citizen, your children will became citizens through them.
Your children are born outside Canada while you are working for the Canadian government
Your children will be citizens at birth if, when they were born, you had a job with:
•the Canadian Armed Forces,
•the federal public administration, or
•the public service of a province or territory.
This rule does not apply if you were employed as a locally engaged person.
You were born outside Canada while your parent worked for the Canadian government
Your children will be citizens at birth if, when you were born outside Canada, your Canadian parent had a job with:
•the Canadian Armed Forces,
•the federal public administration, or
•the public service of a province or territory.
This rule does not apply if your Canadian parent was employed as a locally engaged person.
Charl, I’m not sure that’s how it will play out, but if the ADCS lawsuit is successful, it will force the next Canadian government into serious negotiations with the US over FATCA and its impact on Canada and Canadians. (Yielding to the US-imposed IGA was not a serious negotiation.) Given the relationship between the two countries as trading partners, neither can afford the 30% withholding tax impact on funds transferred from US to Canadian financial institutions. The Canadian government would be forced to show some spine and defend Canadians against the financial imperialism of US citizenship-based taxation as it applies to Canadian citizens and permanent residents.
Could someone explain this to me? It is from the Fatca Glossary from HSBC.
Withholding Tax.
“In certain circumstances, a 30% withholding tax applies under Fatca on U.S. source income in respect of non-compliant financial institutions.”
Is this the 30% tax they were inferring to if I didn’t sign the W9? I have no U.S. source income.
@AnonAnon re:
“Charl, I’m not sure that’s how it will play out, but if the ADCS lawsuit is successful, it will force the next Canadian government into serious negotiations with the US over FATCA and its impact on Canada and Canadians. (Yielding to the US-imposed IGA was not a serious negotiation.) Given the relationship between the two countries as trading partners, neither can afford the 30% withholding tax impact on funds transferred from US to Canadian financial institutions. The Canadian government would be forced to show some spine and defend Canadians against the financial imperialism of US citizenship-based taxation as it applies to Canadian citizens and permanent residents.”
…appreciate your viewpoint,…which is one that has been articulated before..
…but the cards have already been dealt…and the winner has been chosen….whether we like it or not.
…yes this sounds defeatist but it’s not….as they have underestimated their opponents…YOU, ME…all of us.
Snub, Not quite. It has little to do with you as an individual. It’s actually much much worse which is why all FIs in the western world will comply unless they are stopped by a legal challenge.
Suppose Bank of Zambonia hasn’t yet become FATCA compliant. (For whatever reason). Suppose also Bank of Zambonia purchased $100 million of HSBC Bonds due Jan 1 2016 and the bonds were issued by HSBC in New York.
As i understand it, when repayment is due to BoZ, HSBC would only send them 70 million and would send the other 30 to the US treasury. The 30% doesn’t just apply to income-it applies to principle as well. That’s why any FI with a US connection is determined to be FATCA compliant. It’s also why governments signed IGAs in order to make life easier for the banks.
Imagine the lawsuits when $millions are at stake. Imagine the fun the lawyers are going to have. It will be a goldrush.
@AnonAnon & Snub:
Thanks for providing the names of the banks that you are involved with.
@Snub:
Portland PLC and Blaze have given you good advice. HSBC is not a good bank to do business with if one is potentially affected by FATCA. It is an international bank and its Swiss operations were involved in a tax evasion scandal. The US has come down hard on some Swiss banks for promoting offshore accounts for resident Americans. HSBC is likely terrified of running afoul of the US.
Personally I would not sign a W9 – I believe that doing so is equivalent to admitting that one is a US Person. This may be difficult but I would try to argue my case with them that I am not a US Person.
I would look for a smaller credit union that does not do FATCA reporting and transfer all of my money from HSBC into the credit union.
@WhatAmI:
I agree with the others. The Canadian govn’t. could have and should have done more to stand up to the US. They took the easy way out. They failed at their most important responsibility – to uphold the rights of every Canadian citizen. Instead they sacrificed us, a minority of Canadians. They could have fought the US hard on exempting all “US Persons” who are resident in Canada.
@ WhiteKat & GwEvil:
It does appear that FATCA developed in an atmosphere of anger over resident American offshore tax evasion in private Swiss bank accounts. However I do suspect that there was more to it. I think that people like Max Baucus were looking for a way to enforce CBT. I recall a quote from a US bureaucrat that the US needed to “expand its tax base” (I cannot remember the name) and I’m sure that the US debt is the reason for comments like this.
@snub. I’m not 100%sure of this but I think you may have an out here in that there was a law, revoked in 1978, I believe, which stated that you had to claim your U.S. Citizenship prior to age 18 if you wanted to retain it, otherwise you lost it. I think that being born in 1954 this law would apply to you and mean you lost your citizenship. Lucky you!
@SilverBirch, close but no cigar…..
Its age 25, and @snub would have missed it by a few months…..
@Mr. A., I agree that some people in the US govt. saw FATCA as a way to “expand its tax base” by enforcing CBT on US citizens abroad. However, in doing so, the US is violating what should be a fundamental principle of democratic government: Do not impose on your citizens continuing costs (in this case costs of compliance with tax reporting laws) for which they receive no benefit. They will surely rebel. The error is, of course, compounded by the fact that the citizens so affected have no representation with that government.
@Snub…….lets see your sixty plus years old….at or near retirement and are setting screwed over…..by your own government that your father protected and served.
When I responded to @Gwevil who I have great respect for, but responded in general terms which is a violation of Rule One that everyone is different at Brock.
I am myself an oddity with respect to loss of citizenship here on Brocker Island amongst this great group of very different people.
It is possible that you did not gain US Citizenship despite being born in the USA. The IGA provides that you may state “The reason the Account Holder did not obtain U.S. citizenship at birth.”
Your Mother and Father are either pretty old or have already passed on. But I think you stated somewhere that you did not believe you were a citizen nor has it ever been adjudicated by the USA.
You have a US Birth Certificate and a Canadian Birth Abroad Certificate. I assume that BOTH of them state your parents were born in Canada and that your Fathers profession was a Canadian Naval Officer.
It is POSSIBLE that he was assigned to the USA and was provided with a Diplomatic Official Passport from Canada.
It turns out historically and up through the Harper Admin that such passports were handed out rather loosely in Canada.
You may be able to either find a record of such passport in your parents papers or may be able to write various records agencies to see if they have any record or simply do not know.
If there is no record and your Father is alive and if he is competent mentally, he could swear an affidavit before a lawyer/notary that he was assigned to the USA and traveled under an Official Diplomatic Passport if he believes that was the case.
@ George.
The Certificate of Registration of Birth Abroad does not state that my father was in the Military. However, My Certificate of Live Birth from the Commonwealth of Virginia has his occupation as a Lieutenant in the Royal Canadian Navy.
Both my parents are long gone. As far as a diplomatic passport is concerned, I suppose I could go through their belongings and see if I can find something. But the clock is ticking. HSBC will freeze my accounts on June 10. I may just pull my money out, if they will let me. It is a large sum.
Thanks to all for your help. It is much appreciated.
Could someone tell me what a CLN is? Thanks!
Snub. If one of your accounts at HSBC is a RRSP, you could remind them that RRSPs are not reportable.
@Snub – a CLN is a “certificate of loss of nationality” issued by the US state dept after someone either renounces or proves a past relinquishing act.
If I was in your position, I’d get a lawyer to draft up a nasty legalese letter threatening to sue their asses off if they dare to freeze your accounts. They have NO right. You have every right to take your money and leave!
Yes, I have an RRSP there. And a non registered.
@Snub
CLN = certificate of loss of nationality
Could someone tell me why that lady in the video had a $ 93,000 bill to pay to the IRS? Did she get a huge inheritance? I don’t understand where such a big dollar amount came from…..???? Was it because her husband wasn’t a US citizen???
The story doesn’t make it clear. She might have received bad advice. There was no way the IRS could have collected.
Ok…but I still don’t understand how it’s possible that Canada charged her around 35,000 and the US 75,000 then they hit her with penalties. What would have caused such a big tax bill…??? It would be interesting to know so that we could avoid it!! The best solution is to abandon ship…bail out as fast as possible and get rid of this toxic citizenship!!
@Duke of Devon
She could have been screwed over with the mutual funds… seniors all seemed to have them… I know the elders in my family do/did… it allowed them to get a better return…. But as a US person… its the most toxic thing u can have… My education is not that good that I could even do the math on it…. Someone tried to explain it to me… my eyes glazed over & what little is left of my mind… wandered off…
@snub. When we went through our banking woes, resolved, for now, we had planned to move our money to a non-reporting financial institution. We learned that this would not stop the reporting but if we closed our account the account would be reported with the balance on the last day it was open, rather than its balance at the end of the year. When we learned this we decided we would not close the account outright but leave only a token amount in it, which would then be the number sent to the IRS ( via the bank and CRA). We certainly didn’t want to attract attention with a high value account.
@ Silver birch
That is very good to know. I was thinking about closing the account completely, so that would have been a bad idea.
@US Foreign Person, re; “My education is not that good that I could even do the math on it…. Someone tried to explain it to me… my eyes glazed over & what little is left of my mind… wandered off…”
Exactly what my experience has been when I’ve tried to explain other aspects of this, and lost any pretense of interest from my audience. Including my spouse. And because I was lucky not to have any mutual funds, I didn’t have to learn the ins and outs of PFICs. I barely could follow all the 3520/A reporting for my paltry TFSA – which I had to dissolve – to pay the tax lawyer and accountant, and also to get rid of my “taxable foreign trust” before I had to do yet another expensive and meaningless round of reporting.
: )