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:
I totally don’t understand a word of that. If I took out most of my cash and left my supposedly non-reportable RRSP and TFSA, would that help? You may have to type a little slower, I’m a high school drop out. (LOL).
@snub,
I didn’t quote the whole section. It simply says (my words): “Closed accounts must still be reported even though they are closed before the reporting date”, and “If a reportable account is closed, then report the account balance from immediately before closure”. In other words it says, “Just because an account was closed doesn’t mean it doesn’t have to be reported”.
I think that answers your question. Nothing else matters (RRSPs, etc). There doesn’t seem anything you can do to stop the reporting other than to prove you are not a US person (by producing a CLN or whatever else they may accept).
Snub, I don’t think we can say what HSBC will actually do. It would appear to be a good idea to move your reportable accounts. Tell them the wait time for a CLN is 2 years. The inter governmental agreement Canada signed says that a W8 Ben plus a ‘reasonable explanation why you don’t have a CLN’ should be enough. You don’t have a CLN because way back then they were unheard of.
If they report your closed account anyway, so what?
@Snub
If they deem your account to be reportable (i.e. if you’re classified as a “US person”), they will report the closing balance from Dec. 31, 2014, i.e. there’s nothing you can do to influence that. Anything you do with the account now will only affect what they report for 2015, which will be done around this time next year.
“Circumstances in which an account holder would not hold a Certificate of Loss of Nationality
Snub. This is what the Irish gov’t has to say about IGAs.
Canada should have followed suit but hasn’t so far. No way should you agree with HSBC that you were American. Tell them you can’t produce a CLN for at least 18 months.
Thanks to all for your help and advise. The part that confuses me ( O.K., one of many parts) is that if I no longer had an account at HSBC, then why would they need to report me. It seems to me that it would be in their best interest to just ignore the fact I ever existed. This whole mess only started a few months ago, so there should not have been any reporting in 2014.
@Snub
“The part that confuses me ( O.K., one of many parts) is that if I no longer had an account at HSBC, then why would they need to report me.”
Well, FATCA resp. the IGAs are specifically designed to catch people who close their accounts to avoid reporting…
“This whole mess only started a few months ago, so there should not have been any reporting in 2014.”
This is from the CRA:
“Canadian financial institutions began collecting information about new client accounts on July 1, 2014, and reporting information on their existing and new U.S. account holders to the CRA every year starting in 2015. “
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html#q1-2
I recently helped my daughter (who turned eighteen) open a CIBC Investor’s Edge (self-directed brokerage account) TFSA. We used my daughter’s SIN card and driver’s licence for ID. She is not a US Person (born in Canada and I don’t satisfy the US residence requirements to give her any claim to US citizenship) so I was not worried about FATCA. I was curious if we would be asked the US questions and was waiting for them.
There were none. They are not even on the CIBC Investor Services TFSA application forms. There are two boxes under “Canadian Citizenship”: Yes or No. If one checks the No box then there is a line to fill out to answer “what is your country of citizenship?”
The CIBC employee did not even ask us about this section as she filled out the application (initially on computer before printing out a copy for us). She just silently clicked Yes and went on the next section.
CIBC (for self directed brokerage accounts at least) seems more FATCA friendly than ex. RBC Direct Investing, which asks for one’s country of birth.
Thanks for all the details shared here all.
I have my CLN, and I have kept some modest assets in one of the big banks for the express purpose of using them as potential canaries in the FATCA coal mine. So far nothing, though I don’t have any US indicia on file that I know of. Otherwise, I deal with credit unions. Can’t say what they’ll do because they were opened pre-FATCA.
It gets more complicated every day. See in Bloomberg from Premiere International Tax Library, August 7, 2015:
http://www.bna.com/fatca-versus-igas-n17179934450/
“A FATCA issue that has recently bubbled up relates to the differing approach to FATCA compliance by the U.S. Treasury and the governments of some countries, notably, the United Kingdom and Canada, with respect to the self-certification requirements for new individual account openings under an Intergovernmental Agreement.”
Canadian guidance implementing FATCA states, ” It provides in Section 9.15 that if the self-certification is not provided by the account holder, the account is to be treated as a reportable account. The Canadian Guidance, however, goes further and emphatically states in Section 9.16 that the IGA in no way requires or encourages a Canadian financial institution to refuse to open an account or otherwise deny service.”
“Against that backdrop, the IRS, in its Frequently Asked Questions (FAQs), recently added Question 10 to the section dealing with General Compliance. The question posed is whether, if a Reporting Model 1 FFI or a Reporting Model 2 FFI, in applying the due diligence procedures in Section III(B) of Annex 1 of the IGA, cannot obtain the self-certification upon the opening of new individual accounts, can the financial institution, nevertheless, open the account and treat it as a U.S. reportable account? The IRS responds “no,” stating that, pursuant to Section III(B) of Annex 1 of the IGA, the financial institution must obtain the self-certification at account opening, failing which the financial institution cannot open the account.”
So now the IRS is dictating who can or cannot open a bank account in a foreign country.
I feel like a trapped rat…where are we headed? You can’t even open a bank account without the US’s permission.
@2terrified
I agree, I feel like a trapped rat also and so beyond angry that the US legislators just can’t seem to find the time nor interest to do anything about it. They all know the situation and simply do not care. Shadowraider reported that the folks he spoke with were all sympathetic but that translates into NOTHING. Just disgusting, simply and utterly disgusting. Who the Hell do they think they are? Such arrogance is just beyond words. I have never in my life been consumed with such rage.
@2terrified2sleep and Charl
We need to follow how the banks deal with this new IRS compliance mandate. I agree it is not getting any better. The situation is beyond outrageous. Also we need to move finances to FATCA exempt credit unions wherever it is possible.
Once again, I ask….Where are all these “FATCA Exempt” credit unions? I’ll move there in a second if I could find one….and how do I invest for the future anyway?
@PierreD,
There is a thread here somewhere devoted to FATCA-free credit unions. I’ve been always surprised that so few people seem to care or use them.
There are some where you have to be a resident of the province to be a customer, such as VanCity in British Columbia and at least one in Ontario. I always post the three online credit unions that I have found that are Canada-wide and pay high interest on savings. They are Accelerate Financial, Achieva Financial and Implicity financial. They have checking accounts and GICs, TFSAs, but no sophisticated investments as I recall.
“The IRS maintains that it does not make sense to allow the account to be opened and to then have the financial institution report on the account when it’s quite possible that the account is not U.S.-owned. It would simply encourage incorrect reporting. ”
http://www.bna.com/fatca-versus-igas-n17179934450/
ROFLMAO
Best laugh I’ve had all week.
Here is the link to Maple Sandbox post on credit unions:
http://maplesandbox.ca/2014/are-other-canadian-credit-unions-being-as-responsible-about-fatca-as-vancity/
I did research on credit unions in BC, which is in one of the comments on this post. Others looked into credit unions in other provinces. The credit union research in other provinces was never finished and is incomplete. As this is a fluid situation, one always has to check out a credit union before opening accounts. If you live in BC, Vancity is the best.
I will post more on this tomorrow under fundraising post as this is a major issue. It would be great if we could get people in other provinces and territories to complete credit union information as to FATCA exemptions,
@The Mom
This is getting more surreal. Sorry, IRS, the horse has left the barn!
What Am I,
I had investigated before moving $$ up from the US and spoke to both Achieva and Accelerate before opening accounts with them. They are in fact, connected in some way to an investment company and it is not totally clear, whether they are exempt from FATCA or not. I may have the name of that company and will post it if i find it. I actually spoke to a man there as well………..
@Tricia Moon
Vancity in BC also has connected investment company but I am not sure of it’s FATCA status. It is Credential Financial. Will try to find out.
i have opened accounts at van city credit union with only showing my drivers license and zero questions about where i was born.
i have known the nice lady who opened my accounts at van city for almost 25 years. when i was opening accounts she asked my why now? i asked her if she had ever heard of fatca and she said “no” i told her all about it and she was amazed at what i was telling her.
prior to opening the account i had to go through the assistant manager to the branch manager to confirm that van city was in fact an “local client based branch” in that the assistant manager was confused about fatca and in the first place claimed that they were in fact reporting “americans to the cra”
all in all van city has been great to deal with once you set them straight.
Stephen Kish reported that he had gone into a branch of the Coastal Community Credit Union and asked them, if he was to open a new account, would they ask if he was a U.S. Person. The answer was “Yes”. That is strange because that is where I opened a new account in early June. At that time they only required my Drivers Licence and Social Insurance Number. No questions about place of birth or any relationship with the U.S.A.. Very strange.
@ PierreD
“Once again, I ask….Where are all these “FATCA Exempt” credit unions? I’ll move there in a second if I could find one….and how do I invest for the future anyway?”
This a list of Financial Institutions that are registered with FACTA. It is over 2000 pages but might help you out. It is also a year old, so may have changed.
https://www.abolishfatca.com/IRS_FFI_List.pdf
What I think folks need to do is go online and see what questions are asked
If the ask country of birth they are what I call ultra vires fatca and should be shunned
If they ask citizenship you answer it to the best of your ability. I believe that I may be Canadian by descent but I do not disclose that because I have no citizenship docs from them
@ Pierred and Snub
The simplest answer is to call the credit unions in your province and inquire about their FATCA status. Keep asking until you get a clear answer. That is what I did in BC. You need to know if they are in one of two FATCA exempt categories. Either the credit union is Local Client Based and does not accept clients from outside Canada and in some cases outside the province. (in addition, they must register as LCB) Or the credit union has small total assets, less than $175 million US. If you are interested in investing, you must ask the associated investment company, which is usually a separate entity, about their FATCA status. Usually only the larger credit unions have this.