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:
@Blaze:
Not quite. The language in Bill C-31 says:
If the IGA does not explicitly require or allow for the collection of birth location, then there is no inconsistency between the IGA and the privacy legislation. Privacy law says you cannot collect birth place, The IGA doesn’t require that you collect it, therefore no inconsistency and no overide.
The qualifier “to the extent of the inconsistency” limits the override to the minimum necessary to make the legislation “work”. It is not a global gutting of the privacy legislation.
The only things specifically mentioned in the legislation are citizenship, tax residence and US person hood. There is an actual inconsistency between these questions and the privacy legislation and these are the questions that the overide effects.
I’m SOOOO with you, Anon Anon.
And….a great quote from “Mahatma” Gandhi…..
“You assist an evil system most effectively by obeying it’s orders and decrees. An evil system never deserves such allegiance. Allegiance to it means partaking of the evil. A good person will resist an evil system with his or her whole soul.”
Mr. Gandhi DID achieve his goals.
It is my understanding that the banks and credit unions do no need your permission to forward account info to the CRA because when you opened your account you signed their account agreement. This agreement includes a privacy statement which allows the banks and credit unions to share your account info with the CRA. If you still have a copy of your account opening info check it out. I was told recently that there is no need to inform you if your account info is being sent to the CRA since you already have signed a privacy waiver when you opened the account. If the bank or credit decides to let you know that your account info has been passed on to the CRA it will be a courtesy call only to let you know. That is what I have been told.
I am thinking that this is why the IGA was designed the way it was – you already gave up your privacy rights to your account info with respect to the CRA so therefore ? no privacy rights have been violated by the banks. The CRA is the one sharing your info and isn’t that already covered ? the sharing of info by the CRA?
Scotiabank IRS Forms
“The links below are provided to facilitate access to the forms needed in order to document a customer’s status for FATCA purposes, when required. These are not intended to serve as legal or tax guidance.
If you have questions or concerns about your U.S. tax status, we suggest you consult consult a professional advisor…..”
@badger. I clicked on your link…it does not work.
Try this, Only a Canadian: Scotiabank IRS Forms
Those forms alone will drive people and banks away from all things American.
Even the former Soviet Union communists could not have designed a more repressive system of financial control over people’s lives.
@downtherabbithole
During his testimony before the Senate Finance Committee, Kevin Shoom of Finance stated that there was a change in the implementing legislation. The change was to insert ITA subsection 265(5).
Here is what Kevin Shoom stated:
“If a financial institution does find one of these indicators through an electronic search, the agreement says that it should treat the account as reportable unless it elects to attempt to clear the indicia. That’s what the agreement says. In our implementing legislation, we have taken away the voluntary nature of that. This is contained in 265(5) of the implementing legislation, and it’s making it clear that financial institutions attempt to clear the indicia. Clearing the indicia would mean contacting the client and giving the client the opportunity to provide the documentary evidence necessary to demonstrate that they are not in fact a U.S. person.”
For more information please see my posting at Maple Sandbox
http://maplesandbox.ca/2014/banks-must-notify-customers-before-sending-information-to-cra-and-the-irs/
thanks for the info Hazy I think that the operative words are “unless it elects to attempt to clear the indica”
I equate ” election” as “voluntary” – electing to report is not the same as requiring them to notify anyone. I could be wrong but this statement sounds to me that the bank or credit union have the option of not electing to clear the indica and therefore will just report anyone with “indica” . In any case they have your signed consent to share your account info with the CRA I don’t think that citizenship comes into this consent that you gave the bank or credit union. Therefore they have not violated your privacy since they already have your permission to send your account info. This could be the reason why The CRA is doing the reporting.
@downthe rabbithole, Thats what I was told on the phone after calling a high street bank. They were going to report all.
A non-US Citizen who has the indelible US Place of birth is shut out from banking at many local financial firms.
Part of this is the over zealous compliance industry.
Anyone who has a bonafide relinquishment needs to thoroughly investigate who they will be doing business with.
Just received this from RBC:
…..When opening a new account you will be asked about your status as a US person. We will also review existing accounts in order to identify and report information on US and certain potential US persons. Any required reporting will be sent to the Canada Revenue Agency. Please bear in mind that RBC may contact you more than once in relation to FATCA if you work with different areas of RBC (e.g., investment banking).
@charl – did you get that as a matter of course or because they know something already?
@GwEvil
Nope, just came in their monthly “this and that” newsletter. Funny, of course I knew this was coming but when I actually saw it in writing I started spewing four letter words! I am curious as to what “potential US persons” means. Maybe children born in Canada to US persons? I thought that might be a few tiers away from the initial inquiry.
@GwEvil
Be aware that some banks are *Updating* their privacy policy… with no mention of fatca… just blah, blah, blah… marketing or so forth… as they see fit… basically saying backhanded… got no privacy for u if u got the taint… but its not mentioned so u won’t lose your mind or notice the change in the wording & go ape sh*t on them… HSBC sent me multiple notices… small booklet… I realized I usually get one… I got multiple so they are covering each account I have…
@charl,
My optimistic interpretation of the vague RBC letter is that they will only ask questions of people with electronic US indicia, such as a US address or phone number on file.
We will also review existing accounts in order to identify and report information on US and certain potential US persons.
Notice they say they will be “reviewing existing accounts”, not “questioning existing account holders”.
Again, the letter is too vague to really know what they are going to do.
Just received by email as information for this banking thread:
@calgary411
Since now that Fatca is law in Canada… basically its not revealing to everyone that if u got the taint… they will send your info to CRA who will then send it to the US without u knowing it… What a back handed way of dealing with this. Unless u are trolling for tax info… u would never know about it. I did not know jack about it & found out by accident… this effects every money situation… saving… investing… retirement… inheritance… the list goes on & on…
@Calgary411
Perhaps I am over analysing but I see a glimmer of hope in the sentence quoted :
The key phrase being “only disclose … where required by law”
One of the problems with the IGA is that there are required elements, but the exceptions to the requirements are all optional by the bank. For instance if you are an American they are supposed to report you unless account balances are less than $50,000 or the client has a CLN etc. Unfortunately the bank has no obligation to check for the exceptions and is allowed to report you anyway.
But, just because they are allowed to report you doesn’t mean that they are required,/b> to report you. In order to determine if they are required to report you they need to check for all of the exceptions.
So to me the quoted statement implies that RBC will be applying the exceptions and only reporting the required clients and not the optional ones. This is good, there are banks that are not going to apply the exceptions at all and simply report anyone with any indicia.
Or perhaps I am reading too much into the word required.
@Just A Canadian
Even if RBC does not limit reporting to the exceptions, and say for example reports all ‘US person’ accounts even if under 50K, the question remaining is ‘What will CRA forward on to the IRS?’
Surely CRA will be doing some rudimentary assessment of the data files it receives, and filter out accounts that are not FATCA reportable. For example, if a financial institution were to send RRSP account information (not sure why they would do that), will CRA system programs have code to filter out such accounts (will they even recognize these accounts as being RRSPs)?
Another thought just occurred to me for those who think they are fine because they have accounts in multiple banks not exceeding 50K in any one bank. If banks ignore the 50K rule, will CRA ADD UP all the various account values received from multiple banks for one individual and if over 50K aggregate report to the IRS? I was a systems designer for over 15 years, and if I was working on the CRA systems to implement FATCA, these would be the kinds of questions I would be asking.
Speaking of system designers/computer programmers, I am somewhat surprised we have not had any ‘hints’ of what is going on regarding the computer systems being implemented at either the banks or the CRA by designers/programmers who are actually part of the systems teams. Surely some of them read here, and perhaps are ‘US persons’ themselves or have friends or family who are.
@JustaCanadian – we will obviously have to see how this plays out over time. However the “override” clause is not infinite in scope. With something like FATCA/IGA – clearly imposed upon Canada and serving no Canadian public purpose beyond avoidance of likely illegal sanctions – I would not expect courts or privacy commissioners to be giving a broad and liberal interpretation up front particularly where privacy and human rights statutes are in play. I would expect FATCA to get the narrowest reasonable interpretation and human rights/privacy the widest. FATCA/IGA may require reporting on things found and it may require to look through data to find things, but it is not very specific about what procedures must exist for new clients beyond a general invocation of know your client rules.
Accordingly, I would expect it reasonable that push back on the “where were you born” type of question to be may well be strongly supported by regulators and courts since FATCA does not explicity require the asking of that question and the asking of it may otherwise violate privacy and human rights protections. In other words, the specific will override the general. Remember – as we all know – birth place does not dictate citizenship or US tax liability, it merely elevates the question a further level. There is no precise definition of exactly what prudential “know your client” rules ought to be.
The Scotia self-certification regime strikes me as somewhere around the line, but quite likely on the permissible side. Objectionable to ask (see Charter Challenge), but at least allowing you to self-certify “yes” or “no” around the CURRENT US Personhood question, particularly where the term is not exhaustively defined on the forms and can reasonably be interpreted to apply only to the present, actively-held type of citizenship (and not the perpetual, clinging non-citizen US Person-hood attempted to be applied to “covered expatriates” since 2008). Even the IRS W8-BEN form does not seek such a detailed self-ruling in asking for self-certification. The form itself is pretty vague on what “US person” means. I certainly don’t read it and assume that a self-ruling on covered expatriate ex-citizen status is intended or required. I don’t see that a Canadian judge will automatically expect more of a Canadian citizen and resident or use such esoteric hair-splitting as justification for violations of human rights or privacy statutes when the “exception” statute (IGA implementing statute C-31) is not explicit. .
Canada has NOT agreed in its treaty to do ANYTHING at all to help the US re current Canadian citizens for current tax years (past years a different matter, but FATCA is about TODAY’s banking data, not yesterday’s). Parliamentarians were told over and over again, that all anyone objecting to FATCA has to do is “just renounce” – that can hardly be taken to assume multiple years of retroactive (or prospective) tax compliance under foreign rules that have never applied in Canada nor been part of Canadian law.
Given all of this, a current Canadian who was once American, regardless of when, should be able forthrightly to say “no” to the Scotia “US person” question without having to get a legal opinion on covered expatriate status for prior tax years as that is way beyond anything that the IGA can be tortured into requiring banks to require new customers to identify or certify. I’d be happier if they just asked “Are you a US citizen” and if the regulators (OSFI, Finance, CRA) clearly indicated that no more is expected or required of them. I think that would satisfy the IGA minimum “know your client” due diligence obligations adequately while infringing on privacy and human rights as little as possible. If you are able to say no to that much simpler, less-ambiguous question today – regardless of your past – you should have nothing further to do with the whole sorry mess. We’ll have to see if things evolve that way.
The road is still rocky, the questions still objectionable and the Charter Challenge reasons still valid. As I have said a few times, I continue to be of the view that FATCA or no FATCA, current Canadians who can reasonably say that they became Canadian expecting/intending/accepting loss of US nationality should be able to stay out of the FATCA mess providing they have kept and continue to keep their birthplace and past history to themselves. I don’t think it anyone’s business in Canada to be sure, but I think we can expect that any bank that goes past self-certification to try to form its OWN view on US tax status will find itself on very thin ice if push-back is received on privacy or HR grounds. The law does not OBLIGE them to do so and being eager-beaver auxiliaries to a modern-day Spanish Inquisition is not going to be where they want to be found once the courts start to get their teeth into this.
God, I think I am going to have nightmares over this one now – at one time I was a programmer at a large insurance company. Imagine being in that role, and being assigned to the FATCA systems team where your job is to crucify yourself.
small PS – re-reading the infamous IGA, I note that “US Person” is defined to mean a “US citizen or resident”. There is nothing there about “covered expatriates” – a shadowy class of former citizens the US still claims the right to tax perpetually depending on when they ceased to be citizens. Annex I, part IIIB(1) also refers only to “US citizens” in setting out what new accounts must certify. All in all, I would think a certification that simply tracks the language of the IGA and asks for certification that the person is neither resident in the US for tax purposes nor a U.S. citizen. Again, nothing in the IGA requires going into the past tax status of an individual or their potential exposure to “covered expatriate” status.
@WhiteKat
There’s always sabotage 🙂
@Bubblebustin, You read my mind.