Confirming reports passed on by commenters at the Isaac Brock Society, DiploPundit points to a State Department interim rule just placed on public inspection for printing in tomorrow’s Federal Register, which raises the fee for renunciation of U.S. citizenship (but apparently not relinquishment) to US$2,350, more than twenty times the average level in other high-income countries. As they state:
[D]emand for the service has increased dramatically, consuming far more consular officer time and resources, as reflected in the 2012 Overseas Time Survey and increased workload data. Because the Department believes there is no public benefit or other reason for setting this fee below cost, the Department is increasing this fee to reflect the full cost of providing the service. Therefore the increased fee reflects both the increased cost of the provision of service as well as the determination to now charge the full cost.
The Universal Declaration of Human Rights states that “No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality”, while the Expatriation Act of 1868 says that renunciation of citizenship is “a natural and inherent right of all people” and that “any declaration, instruction, opinion, order, or decision of any officers of this government which restricts, impairs, or questions the right of expatriation, is hereby declared inconsistent with the fundamental principles of this government”.
As of press time, the State Department has not yet commented on whether it sees “public benefit” in other human rights such as freedom of election or freedom of marriage, or whether anyone seriously believes that charging people a month’s salary to get a ballot paper or a marriage certificate would not restrict or impair those rights.
Practical effects
Because this fee hike apparently does not apply to relinquishments, ex-Americans who naturalise in most other countries will still be able to obtain a Certificate of Loss of Nationality from the U.S. government for no more than the cost of taking a day off work and driving or flying halfway across the country to the nearest consulate which isn’t backed up for months with renunciation appointments. (“Most other countries” means those which allow dual citizenship, like Canada and France, or those which forbid dual citizenship but allow new citizens to submit proof of loss of their former citizenship after the naturalisation ceremony, like Japan.)
However, Americans seeking to naturalise in countries which require new citizens to give up their former citizenship before the naturalisation ceremony, like Taiwan, or those who have been foreign citizens for decades or all their lives and never exercised any benefits of U.S. citizenship but now need to acquire a formal CLN (for example because their bank will discriminate against them if they don’t have one), will feel the full impact of the new fee hike, and also have to wait for months or even longer than a year for the State Department to give them a CLN before they can get on with their lives.
What changed?
The State Department has always claimed that processing renunciations has a high cost, but four years ago when they first introduced the renunciation fee, they at least pretended to take a very different attitude to the cost:
The CoSS demonstrated that documenting a U.S. citizen’s renunciation of citizenship is extremely costly, requiring American consular officers overseas to spend substantial amounts of time to accept, process, and adjudicate cases. A new fee of $450 will be established to help defray a portion of the total cost to the U.S. Government of documenting the renunciation of citizenship. While the Department decided to set the fee at $450, this fee represents less than 25 percent of the cost to the U.S. Government. The Department has determined that it must recoup at least a portion of its costs of providing this very costly service but set the fee lower than the cost of service in order to lessen the impact on those who need this service and not discourage the utilization of the service, a development the Department feels would be detrimental to national interests. See 31 U.S.C. 9701(b)(2).
They also note the per-hour cost they use to calculate the new fee:
The Department previously charged a consular time fee of $231 per hour, per employee. This fee is charged when indicated on the Schedule of Fees or when services are performed away from the office or outside regular business hours. The CoSM estimated that the hourly consular time charge is now lower. Accordingly, the Department is lowering this fee to $135 per hour.
This implies that they take about seventeen employee-hours to process each renunciation (assuming that none of the fee goes to other expenses such as travel or printing). Oddly enough, in their 2012 Paperwork Reduction Act filings on Form DS-4079 (which is filled out by both renunciants and relinquishers), the State Department indicated that the cost for processing the form was just $33 per hour. I don’t understand how these two estimates relate to each other.
To explain the new fee hike, the State Department point to procedures (such as the pointless and repetitive double in-person appointment system) which are required neither by the Immigration and Nationality Act nor the Foreign Affairs Manual, nor used by any other countries:
For example, consular officers must confirm that the potential renunciant fully understands the consequences of renunciation, including losing the right to reside in the United States without documentation as an alien. Other steps include verifying that the renunciant is a U.S. citizen, conducting a minimum of two intensive interviews with the potential renunciant, and reviewing at least three consular systems before administering the oath of renunciation. The final approval of the loss of nationality must be done by law within the Directorate of Overseas Citizens Services in Washington, D.C., after which the case is returned to the consular officer overseas for final delivery of the Certificate of Loss of Nationality to the renunciant. These steps further add to the time and labor that must be involved in the process.
As demonstrated by the experience of other countries, the State Department could greatly lower their costs by simplifying their procedures, but apparently such a common-sense step has not occurred to them.
But look on the bright side! 31 USC § 9701 says that “[e]ach charge shall be … based on … (A) the costs to the Government; (B) the value of the service or thing to the recipient; (C) public policy or interest served; and (D) other relevant facts.” Given how valuable a CLN has become these days, imagine how high a fee they could charge for it if they set the price based on its value.
Timeline for fee hike and comments period
The State Department ends with an excuse for why they can’t be bothered to tell us about the fee hike more than two weeks in advance, while keeping renunciants waiting for dozens of times that long to get the CLNs in the first place:
The Department intends to implement this interim final rule, and initiate collection of the fees set forth herein, effective 15 days after publication of this rule in the Federal Register …. The Department is publishing this rule as an interim final rule, with a 60-day provision for post promulgation comments and with an effective date less than 30 days from the date of publication, based on the “good cause” exceptions set forth at 5 U.S.C. 553(b)(3)(B) and 553(d)(3). Delaying implementation of this rule would be contrary to the public interest because the fees in this rule fund consular services that are critical to national security, including screening visa applicants.
You have until 4 October to submit a written comment on this rule. I will update this post with a link to the docket page on Regulations.gov once the fee hike is officially published.
In my last years with the U.S. Foreign Service in the Departments of Stare and Commerce it was obvious that “user fees” — fees for client services accounted for outside appropriated budgets and funds and thus effectively a flush fund for favored projets of senior brass — had Risen to disproportionate levels so as to distort supply and demand. The $2,350 citizenship renunciation fee (never mind the expatriation tax for covered expatriates) has no relationship with costs. Today’s Economist Magazine has something negative to say about the principle of governments gouging in elastic markets with little voting power or influence: http://www.economist.com/news/leaders/21662545-charging-public-services-sometimes-makes-sense-often-though-it-racket-itll-cost-you?frsc=dg%7Cc
Good read, andy05, and relates to those increasing renunciation of US citizenship fees.
Thanks for pointing out the not so obvious.
Read the State Dept BS in dismissing the record number of complaints (70) re the unconscionable rise in renunciation fee:
https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-21042.pdf
An article says
“……….The 70 comments the department received were overwhelmingly negative. ……..
“Despite the opposition, the State Department is expected to make the fee permanent, in a rule to be published in the Federal Register on Tuesday. In the rule, the department defends the fee increase as necessary to keep up with demand for expatriation.”………….
http://blogs.wsj.com/law/2015/08/24/why-it-now-costs-so-much-to-renounce-your-citizenship/
@Calgary….I posted elsewhere for our Aussie brockers……
In the next phase of ADCS, I think you guys need to start developing an argument along the following;
1. Canada passed a law of which the USA defines the terms.
2. Said Canada Law creates a second class Canadian.
3. In order for Second Class Canadian to become a First Class Canadian again, they need to enter a labrynth to get rid of Clinging US Nationality. (Side note, suggestion that all future litigation material refer to Clinging Nationality and NOT Dual Citizenship, also the media needs to be corrected each and every time.)
4. Because Canada passed this law, they are responsible for paying COMPENSATION to those harmed. Lets not argue if the so called “compensation culture” is right or wrong, it is what it is.
5. Canada now needs to PAY all fees for second class Canadians to ditch their clinging US Nationality!!!
Cost? 1,000,000 times ($2,350 plus $10,000 streamlined professional fees, plus $1,000 average travel expense)
$10,335,000,000 USD
So the Government of Canada needs to face a Ten Billion Dollar renunciation problem.
The alternative is they make a deal with the US, maybe streamlined renouncing!!!!
Good Morning All,
I normally don’t comment on these types of things all too often, but I thought I would share my thoughts on the article that badger shared.
I read through the article outlining the case for the increase in the cost of renunciation of the USA citizenship. And I must say that on the surface their rationale sounds seemingly plausible. But once you reflect upon it a little bit more it does not carry much weight. I saw three points that I would describe as misleading at best if not downright incorrect.
1. Burdensome – the article states, “In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation. Further, the fee is not punitive, and is unrelated to the IRS tax legislation criticized in some comments, except to the extent that the legislation caused an increase in consular workload that must be paid for by user fees. Rather, the fee is a cost based user fee for consular services. ” (Top of Page 6)
The whole process is burdensome; now add on top of that the fee of $2350. You are required to comply with all of the tax laws and the whole process of coming twice to give up your USA citizenship in person. The whole process could easily be simplified by required one visit by stamping a CLN that they give you at the time of the visit. And still complying with the Supreme Court rules.
2. Cost of Services – This was referenced numerous times in the article that the new charges are just reflecting the true cost of providing the services. Let’s set aside my own belief that there are more nefarious intentions of this cost increase. This links back the previous comment about burdensomeness (is that even a word?) Streamline the process and you would remove the need for the extra bureaucratic layers by a lot.
3. Fairness – The article states, “In the interest of fairness, the Department must assess the renunciation fee when the core service is performed, rather than upon the provision of information.”
I found this one of the most laughable statements of the whole article. Actually it was more angering that laughable. I cannot even fathom how they feel that this is fair. The “fair” thing to do would be to honor everyone who had already made an appointment and then allow them to pay the fee that they had signed up with. Not stick it to them after they had already made an appointment. I could at least grapple with that in my mind a lot easier then penalizing someone who had already made an appointment. And going forward anyone who hadn’t made an appointment would have to pay the “full cost” of the fee. Now, as to the fairness of the full cost of the fee, that is another matter.
Anyways, that is my two cents on their justification of the change.
Cheers,
Rocky
Their explanation sounds like a lot of “blah, blah, blah” to me. There’s no accountability left in this government when the interests of its citizens come last. This is the door hitting people on the way out.
Despite the disreputable inventor of the Expatriation Act of 1868, the invention itself is valuable. Canada should enact an Expatriation Act that will allow Canadian ciizens to renounce other citizenships for a fee of around C$100.
The State Department States “In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation.”
Can’t say I’ve ever read such a bald-faced lie. As if $2,500 isn’t a burden for a very large number of people. The country at large pays taxes…to cover costs for such required services.
Among the reasons for considering renunciation is that our “rights” are just that, to be given on their terms, conditions of their liking, and at a large cost. The fact they’re acknowledging renunciation as a write makes it all the worse.
@Sir_Stier, re; “The State Department States “In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation.” ”
One wonders just what percentage of an average person’s annual income State would commit to identifying as the boundary and the threshold line that marks where a fee amount that “restricted or burdened the right of expatriation.” would start? The current 2350 USD fee is also now applied to BOTH relinquishment and renunciations and State is raking in the dough.
They can create and raise the fees as they like, because no-one in or with power will take them to task.
“In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation.”
Because 100% of the US’s diaspora are in the economic top 1%.
“In raising the fee to process renunciations, the Department has not restricted or burdened the right of expatriation.”
I just googled this phrase and read the Federal Register March 2015, which attempted to justify the massive increase in fees for renunciations. It made me angry all over again. This fee represented about 10% of my net income for the year, but I was still determined to renounce last year. I’m NOT one of the economic top 1%…
Would it be considered “restricted or burdened” if a person exercising their rights had to pay $2,350 to register a birth abroad or for anyone to pay that fee to apply for a passport?
IF $2,350 for a CLN does not violate the Expatriation Act THEN the same fee would pass muster to simply apply for a passport or to register a birth abroad.
Professor Allison Christians said she believed the renunciation fee could be successfully fought in court, but who wanting to renounce would fight that battle, when over the hill is the CBT and FATCA war?