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.
…..and what was it again that our taxes go to pay for?
They keep telling us all that we are GETTING?
@OddlyNamed Thanks for confirming what I’d assumed and sorry to hear that you will be stung with the higher fee too. I was sure they’d charge the higher fee even though I booked my appointment before the fee change was announced. It will be doubly expensive for me because I am also paying for one of my children to renounce. I had been saving up to help with his university costs, so it’s quite galling to have to spend it on this instead. I am trying to tell myself that it’s still an investment in his future, but it’s a very bitter pill to swallow.
Good Morning all,
I sent a bunch of requests out yesterday night. I have heard back from one so far. The Consulate in the Bahamas is scheduling for Sept 17. Booo. So far no good. But might be worth considering for doing on a vacation to the Bahamas as there turnaround is really quite short.
Cheers,
krackerjack121
Global TV just covered the fee hike on the morning news. Immigration lawyers are up in arms!
@krackerjack–did you try the consulate in Tijuana? Right across the border from San Diego.
There was just a story on Global BC morning News about the fee hike.
But as usual, the story had a few holes. I sent the anchor an email pointing out the holes and asked that they mention ADCS. We’ll see……
@ RMA – I have sent one off two all of the consulates in Mexico that I could find an email address for. I have not heard from any of the Mexican ones yet. So, I am hopeful to here from them soon. I would imagine that the one in Tijuana has just opened for the day.
When I read about this the other night I was sick to my stomach – now I am just MAD. My daughter wants to renounce but the increased costs will be an issue for her. I live on a pension but I will eat beans and rice forever so I can pay for her ticket out of this particular madness. Screw them.
Just heard back from Barbados. It looks like they have openings the week of September 8-12.
So that may be an option for some.
Cheers.
AngloInfo, August 29, Virginia La Torre Jeker J.D. — HELP! I Want to Expatriate But They are Scalping Me….
@krackerjack….Europe?….London? Scotland? Dublin? Iceland?
Can anyone here confirm the procedures for advising the State Department that one has relinquished one’s citizenship? Notably, section 877A of the US Tax Code states that for those who relinquish, the date of expatriation for tax purposes is:
“The date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of an act of expatriation …”
Can you literally just draft your own signed statement and send it to them? Alternatively, if there’s a particular form, could you fill it out and send it to them, or are you required to book an appointment (possibly months ahead) and actually visit the consulate?
A strict reading of the 877A wording suggests that you might be able to inform the Consulate, in writing, of your expatriation. If that requires scheduling a meeting at a later date to formalise any arrangements, it would be the earlier date that is counted as your expatriation date for tax purposes. The ability to determine, at your absolute discretion, the date of you tax expatriation might be extremely useful. For example, those who can only get a consular appointment in the following year could avoid an extra year of IRS compliance by providing the written confirmation in the present year. Also, those subject to the exit tax could provide the written confirmation the day after their investments have dropped in value.
@Deb
I heard the same newscast this morning. Great you followed up with them. I suspect it’s immigration lawyers who pushed to make it a news item. Those using immigration lawyers to renounce might be able to take the hit, but there must be many others in the queue who are having to reconsider renouncing.
@domino…you have to sign part II of http://www.state.gov/documents/organization/97025.pdf in front of a consular officer before they’ll process a CLN but I theoretically suppose if you sign a cover letter saying it was you intent to relinquish before that and maybe attach it to a Ds4079 you could use that date for tax purposes.
@Calgary411
I’m disappointed in Virginia’s use of the word “fashionable” in her opening sentence. It sets the tone that we’re renouncing for frivolous reasons, or on a whim.
@Domino, with respect to notification thats stepping into yet unknown territory.
On reflection as to what you said, what should someone do when they have knowingly relinquished US Citizenship?
1. If registered to vote in the USA, notify the elections officer in writing.
2. If you have a US Passport, it is no longer valid. So in theory you should return the US Passport for cancellation because it is “US Property.” Doing that by special delivery would be notification.
3. No passport? If you are “known” in any manner to the USA and want to “notify” then maybe a sworn statutory deceleration with a notary.
4. If you relinquish and have no US indica, never in the system, would you want to ever notify them? Maybe do an affadavit with a lawyer and file it.
Bubblebustin,
Yes, that is indeed an unfortunate choice of words for her. She has provided good information on past posts — and this one.
@RMA Edinburgh told me today their earliest date is 14 October. London is 8 October.
That’s why I’m disappointed in her, Calgary411. We already get this kind of stuff from our ‘friend’ at Forbes.
@JC says
I see that Woods site is full of comments now that he has “called out”. I just added one too, that is NOT called out…
Just called out at Forbes… There are a lot more and better comments than mine, but threw this one into the mix…
I guess the newest inversion is that the CLN is becoming more valuable than the Passport. When the cost to give it up, is more expensive than the cost to get it, you have a problem mate.
So, if I have this straight, the IRS and State Department create the renunciation complexity and then use it as the justification to increase the cost of the service(?) using some very fuzzy math. Have they ever heard of ‘sunk cost’ or simplification?
This is typical bureaucratic bizzarro speech. “We have made it very complex, and so we have to charge you the fully burdened cost at an amount we determine it to be.”
How about just making the process simpler? It should NOT require legions of bureaucrats and a university degree to give up your citizenship if that is your desire. I think it is a universal human right to emigrate or change citizenship.
Simplification? That thought would never enter the bureaucratic mindset. Barriers to process is part of their job description. It seems to justify their miserable little lives.
Beginning to wonder if we need enlist Moses to invoke God to cast 10 plagues on the IRS/State Department Pharaohs to “let my people go” without a fee.
I just received this email from the US Consulate because I have an appointment scheduled to renounce. They say they are accepting comments on this fee change :
The Department of State published an interim final rule (IFR) on August 28, 2014, to amend the Schedule of Fees for Consular Services. The IFR lists fee changes, including for certain citizenship services fees. While the Department will receive comments on the fee changes for 60 days, the new fees will become effective September 12, 2014. As part of the published changes, the fee for “Renunciation of U.S. Citizenship” will increase from $450 to $2,350 effective September 12, 2014. The renunciation fee is paid on the day you appear at the U.S. Embassy/Consulate and officially renounce your U.S. citizenship before a U.S. consular officer. You will be required to pay the increased fee on or after September 12, 2014.
This fee was first introduced in 2010 and was initially set below true cost. The fee is now reflective of the true cost of providing this service.
If you would like to comment on the IFR and the new fee change:
– Persons with access to the Internet may view the notice and submit comments by going to http://www.regulations.gov and searching for the rule by its Regulatory Information Number (RIN), 1400-AD47.
– Mail (paper, disk, or CD-ROM): U.S. Department of State, Office of the Comptroller, Bureau of Consular Affairs (CA/C), SA-17 8th Floor, Washington, DC 20522-1707.
– E-mail: fees@state.gov. You must include the RIN (1400-AD47) in the subject line of your message.”
Her final paragraph was interesting too:
@ Just Me
I was beginning to wonder if you were completely drawn into the World of Short (Twitterland). I’ve always admired your long comments and welcome their return. Your last sentence … sounds like bio-weapons (anthrax, ebola, etc.) you are talking about. You have to go to Fort Detrick to find those and nobody gets in there easily, not even Moses.
So the net effect of Canada signing a FATCA IGA will be an increase USC’s renouncing or relinquishing US citizenship, only renouncing is unavailable for Canadians at birth. Way to go, Canada.