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:
@badger
I read “Governmental Entity” as a government entity, whatever that is – something that the government needs to function, like The Bank of Canada?, but I assume it is not a financial institution that holds depositor accounts, such as ATB. In other words, an entity owned by the government for government use, not for public use like ATB.
That’s my interpretation!
Having said all that…
You’re quoting from the generic Model 2 IGA, but I think we have a Model 1 IGA. Regardless, the words you quoted are not in our IGA:
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
I don’t see anything about ATB to get excited about, including their ho-hum interest rate.
WhatAmI, thank you for pointing out that I may be wrong about the exception I thought ATB fell under if the Model 2 language is not in Canada’s Model 1 IGA.
From looking at the same text, entities like the Bank of Canada fell into another category of exemption, I thought because they do not serve individuals as ATB does, and they are owned and operated by the Canadian government. But the IGA is so complex, and points to so many other regulations, that I am defeated in trying to figure out what it means.
This type of NFFE from the IGA is what I was referring to re ATB:
“The NFFE is a government (other than the U.S. government), a
political subdivision of such government (which, for the avoidance
of doubt, includes a state, province, county, or municipality), or a
public body performing a function of such government or a
political subdivision thereof, a government of a U.S. Territory, an
international organization, a non-U.S. central bank of issue, or an
Entity wholly owned by one or more of the foregoing; ……..”
pg 34 http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
or, ATB as a
“Deemed-Compliant Financial Institutions
The following Financial Institutions are Non-Reporting Canadian Financial Institutions
that shall be treated as deemed-compliant FFIs for the purposes of section 1471 of the
U.S. Internal Revenue Code.
A. Financial Institution with a Local Client Base. …..” pg 40
I see the Bank of Canada mentioned here on page 39;
“Exempt Beneficial Owners
The following Entities shall be treated as Non-Reporting Canadian Financial Institutions
and as exempt beneficial owners for the purposes of sections 1471 and 1472 of the U.S.
Internal Revenue Code:
A. Central Bank
1. The Bank of Canada.”
@badger
Although I’ve read through the IGA many times, I never try to look up the references to other Treasury documents. Without looking at those, it’s impossible to understand many parts.
You may have seen my posts about credit unions. I’ve opened accounts at 9 high-interest CUs with Local Client bases. I haven’t heard from all of them, but 3 of 5 so far are FATCA reporting even with their Local Client Bases. I don’t know why. It appears that ATB is another one. If we knew what it is about these FIs that make them ineligible for the Local Client Base exemption, it might be easier for people to find more FATCA-free CUs. I can’t imagine a CU opting to report if they didn’t have to.
Thanks WhatAmi. I don’t understand why ATB as owned and operated by a political subdivision of Canada, with a local client base, and which is also provincially (not federally regulated) is not exempt, but maybe the province of Alberta agreed to for reasons that we don’t know or understand. I just hope they’ll be tepid about applying FATCA, and I also hope that the residents of Alberta become so incensed when they find out that the Province of Alberta is kowtowing to the US, that it gets media attention.
Here is the response I got from my fairly senior financial advisor at RBC. More encouraging than I expected!!!!!!
“I asked [my associate] to find evidence in writing regarding RBC and its process for complying with FATCA. Specifically, I wanted to answer your questions pertaining to RBC’s definition of a U.S. Person. You will find attached to this e mail three documents and one web link.
“On the matter of who is deemed to be a U.S. Person, you would be deemed to be a U.S. person if [LM & hubby] had not gone through the formal process of renouncing your U.S. citizenship. Because you have, and you will not be staying in the United States beyond the limited number of days under the Substantial Presence classification, you will not be deemed to be U.S. persons. [LM’s] CLN will arrive before the end of this taxation year. The absence of this CLN to date will not pose an issue.
“RBC is required by law to comply with, among other laws and regulations, The Privacy Act. As part of this requirement, RBC can not arbitrarily send your name or account information to any third party such as CRA. If the bank had reason to believe that you were a U.S. Person, the protocol requires RBC to ask for clarification from you, in writing. If you were to fail to provide clarification, the bank would only then file a report with CRA. It is not legally permissible for any Canadian bank or wealth management company to report your accounts to CRA – IRS on an arbitrary basis. If you have seen something to the contrary, I would be happy to examine it and provide you with a response.” [Can anyone at IBS provide a link to the part of the IGA that is raising our concerns that FFI’s can/will send account info without letting the account owner know?]
“No where on our records does it indicate that you were born in the United States. Even if our records were to indicates that you were born in the U.S., you would be asked for clarification on your citizenship status which would come via the CLN.
“You have done everything correctly and in full accordance with the laws of both Canada and The United States. I hope the above documentation will provide you with the clarity (and relief) you are seeking.”
These links were included (plus one other I could not open but will ask to be sent again in PDF):
file:///Users/LM/Library/Containers/com.apple.mail/Data/Library/Mail%20Downloads/CBA-FATCA.pdf
file:///Users/LM/Library/Containers/com.apple.mail/Data/Library/Mail%20Downloads/The%20Navigator-FATCA.pdf
@All IBS folks – – your comments please
Here is the last document sent by my advisor (NOTE: I have not read through this myself yet but should combine reading this with his letter to me & the other 2 documents mentioned above):
RBC Dominion Securities Inc.
FATCA: WhAT InvesTors need To KnoW
This fact sheet primarily addresses personal accounts. For implications to non-personal accounts, such as trusts and corporations and other entities, please contact your advisor. We strongly recommend that you consult a qualified tax advisor if you believe that you may be a U.S. person.
What is FatCa?
The objective of the Foreign Account Tax Compliance Act (“FATCA”) is to identify U.S. persons who may evade taxes by investing through foreign (non-U.S.) financial accounts – either directly or indirectly through foreign entities such as corporations and trusts.
In its original form, FATCA would have required non-U.S. financial institutions to either:
■■ Enter into agreements with the Internal Revenue Service (IRS) and report information about financial accounts held by U.S. persons – or held by foreign entities in which U.S. persons hold an ownership interest – directly to the IRS, or
■■ Face punitive U.S. withholding tax on U.S.-source payments
To address privacy and regulatory concerns related to FATCA, many countries, including Canada, have negotiated intergovernmental agreements (IGAs) with the U.S. Canada entered into a Model 1
IGA, meaning that RBC will report information to the local tax authority (CRA), which will then exchange this information with the IRS.
hoW Will i KnoW iF i am a
“U.s. Person”?
The IRS1 defines a “United States Person” or “U.S. Person” for U.S. tax purposes as:
■■ A citizen or resident of the United States
■■ A domestic (U.S.) partnership or corporation
■■ An estate other than a foreign (non-U.S.) estate
■■ A trust, if a court within the U.S. is able to exercise primary supervision over the administration of the
trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.
■■ Any other person that is not a foreign (non-U.S.) person
A citizen of the U.S. (including an individual born in the U.S.) who is a resident in another country for tax purposes can still be a U.S. person if they have not formally renounced U.S. Citizenship.
A resident of the U.S. includes a lawful resident of the U.S. (including a U.S. green card holder); and a person who spends a certain number of days in the U.S. each year (substantial presence
generally means a person spending over 183 days in the U.S. in the last three years, excludes exempt categories of persons such as students).
What are the reqUirements
oF FatCa?
Individuals may be asked to
provide additional information or documentation to establish whether they are a U.S. or non-U.S. person. This may include the completion of an IRS Form W-8BEN (certification of non-U.S. status or W-9 (certification of U.S. status). If you are required to submit one of these forms and do not provide it as required, you will be considered a U.S. Reportable Account and details of your account will be reported to the CRA.
Key Dates
■■ July 1, 2014: New individual accountholders must complete and submit a W-8BEN Form or W-9
■■ 2014 – 2016: Additional documentation may be requested from existing individual accountholders which could include a W-8BEN Form or W-9
1Source: http://www.irs.gov/Individuals/International-Taxpayers/ Classification-of-Taxpayers-for-U.S.-Tax-Purposes)
I received an e-mail today from someone in B.C. (not active at either Brock or Sandbox) who had contacted me a couple of months ago. He was a draft dodger. He is now in his 70s. Like me, he is not prepared to go anywhere near a US Consulate.
He became a Canadian citizen in 1972, so I told him his citizenship file would have his renunciation oath. The signed copy witnessed by a Citizenship Canada official arrived a couple of weeks ago.
CIBC knew he was born in the U.S. He gave them a copy of the renunciation oath. They said they had never seen one before, but they accepted it as documentation that he is not a U.S. person and that he will be treated as a Canadian citizen only.
As many of you know, I have the same oath from my own 1973 file. i was quite certain Canadian banks would accept it, but it was great to have it confirmed that it was accepted by one bank.
CRA gave the banks and credit unions HUGE wiggle room. They have said clearly FIs are NOT required to ask for place of birth. They said a place of birth that gives a city and state but does not say United States is not unambiguous place of birth.
The banks and CUs that are asking for place of birth are doing it because they have chosen to do it–not because they are required to do it.
The FIs that are choosing not to ask those questions–like Vancity and possibly RBC are respecting the rights of their customers while also doing what they have to do to “comply” with FATCA.
I transferred from Libro to Your Neighbourhood Credit Union recently because of very different answers I received about FATCA from the two. I may also transfer my TD accounts, but first I want to see if Your Neighbourhood posts any changes on FATCA.
No cover over the door for US Persons. How symbolic.
…nor is there a ramp to the entrance for anyone physically unable to manage the stoop.
That is wonderful news for a lot of people — the way it should be and good for CIBC!! Congratulations to you, Blaze, and to anyone that came in those years for those reasons in getting this confirmation.
i just got back from an event where i ran into the head bank teller for our local bank of montreal.
i purposely sought her out because i know her position and she would give me a straight answer.
she informed me that earlier this week she and all the other tellers just had to do a fatca course with the bank and that there were directed to start asking nationality for all new accounts. when i asked what about existing account holders she said she was told to ask but that she was going to put down “canadian” for anyone she talked to.
she said she was surprised but the number of americans living in our little town and that the one person that came into open a new account with her she directed them to go to our local credit union rather than open an account at the bank of montreal.
she was sympathetic with our situation and was doing her best to subvert the process.
while i am appreciative of what she was doing i felt anger for her to ask someone their nationality because the banks were directing her to
interesting times we live in eh?
I will add this NEW HSBC information consentto the text of this post.
This document states that they reserve the right to “close or block” your accounts if you are unable or unwilling to answer the ‘question’! I thought that under our “special” IGA in Canada they were not allowed to do that!?!?!
I wonder what our MPs would have to say about that. Here is what the CBA (Canadian Bankers Association) says:
http://www.cba.ca/en/consumer-information/40-banking-basics/597-fatca-and-the-canada-us-intergovernmental-agreement-iga-information-for-clients-
From an email just received regarding another financial investment firm, Odlum Brown (https://www.odlumbrown.com/)
@Calgary411 I am actually not surprised they are reporting accounts under $50,000. That amount is ONLY the level at which they must search for indicia. It is not that they should not report under that amount.
FIs are also not required to ask for place of birth or citizenship under the IGA. Some are doing it anyway.
As I said, CRA gave them tons of wiggle room to be comply without doing anything to actually identify “US persons” living in Canada. Too many of them are choosing to ignore that option.
I haven’t gone to my neighbourhood branch in months–and don’t want to. The branch manager knows I have a US connection. She also knows I have a copy of my 1973 renunciation oath in my safety deposit box. I hope it will be accepted as happened to someone at CIBC, but TD seems to be doing the most to comply, so I am no longer optimistic.
Blaze,
I’m not surprised either. What is happening with our “foreign financial institutions” remains a crap shoot. Some will get squashed like a bug more easily than others.
The legal challenge is vital. http://www.adcs-adsc.ca/
Question – Hubby went to our local TD bank today & asked about again FATCA. He was shown the new computer-screen forms that are now to be used when someone wants to open a new account.
This form adds one line to the previous form: “What was your place of birth?”
I recall reading here at IBS that this specific question, about place of birth, is not only intrusive and out of line, but actually illegal and should be neither asked nor answered.
Can anyone out there provide specific information on what law this contravenes?
Where can one find a reference to this being more than just “unacceptable”?
We are not setting up any new accounts but I still would like to point out this transgression to TD staff if there are legalities to back me up.
LM, thanks. Your info on TD bank agrees with the info that I received from a teller — that TD asks for place of birth for new accounts.
What about CIBC questions for new accounts? Can someone find out or do a test on this — and report back here on this post?
I already have several accounts at CIBC and last week opened a new personal chequing account at my CIBC branch. There were no questions about my place of birth etc., but this may have been because I am already an existing account holder with the bank.
I would like more info on CIBC questions when opening a new account. These questions may be part of the information we provide in the lawsuit.
LM, the courts will determine, in response to our lawsuit, the (I believe many) Canadian laws contradicted by these unreasonable questions.
Donors and those still considering: I know that many of you have kindly donated multiple times, but we still need more money, and we will continue to need more money until this is all over.
PLEASE DONATE TODAY: http://www.adcs-adsc.ca
@LM: CRA Guidelines say banks are not required to ask for place of birth. That is very different from saying they must not ask for place of birth.
My understanding is that previously banks could not ask that question under Human Rights, privacy and banking laws. However, the Implementation Act overrides all Canadian laws except the Income Tax Act.
In questioning from Murray Rankin, the Interim Privacy Commissioner said the Privacy Act is `quasi constitutional“ and it was her view the Privacy Act would prevail over the FATCA Act. I have also since learned from on line information Human Rights laws also are considered quasi constitutional.
I have no idea what that means for practical purposes or how it might apply to our situation. However, if I am asked the question, I will file a Human Rights and a Privacy complaint. I have no idea if it would succeed or if either Commission would even consider it.
Why wouldn’t the banks instead ask what your citizenships are? After all, someone who’s naturalized as an American would be just as likely a US citizen as someone born there.
Is it because if you answered Pervian and Canadian that would be discriminatory against Peruvians? It would sure work for those undocumented relinquishers who no longer consider themselves to be Americans.
If my bank or another financial institution asks for my Place of Birth, I will answer “Earth”. If the question is Country of Birth, I will refuse to answer. If the clerk won’t accept that, I will ask to speak to someone higher up in the organization and will politely escalate that to the President of the bank, to get a response in writing as to the reason for their attempt to discriminate against me based on my national origin. I recommend that others do the same.
My current bank would be left with two options: (1) report my accounts as belonging to a presumed U.S. person with no evidence for doing so other than my refusal (I have been a Canadian citizen for 35 years and have a CLN dated from when I became a Canadian, which I will not show them.) or (2) threaten to terminate my 45 years of business with them. I don’t know if option (1) is even legal for them to do. Option (2) would require me to pursue with the government my legal rights as a Canadian citizen to banking services. My objective will be to make them put their reasons in writing and make the whole process as uncomfortable for them as possible.
Until the Charter challenge goes forward, refusal to cooperate with the FATCA IGA is our best course, I believe.
Thanks, AnonAnon, for telling us what you will do when you face discrimination at your financial institution by being asked “Where were you born?”
You are correct!!!!!!