Note: Further update September 15, 2014 introducing the idea of “Third Party Confiscation”. Updated September 12, 2014 – Reader comments of “indirect confiscation added” – if you can think of more, please add them to the comments and I will add them to the post. Thanks: NotAmused and Mark Twain.
American shakedown: Police won't charge you, but they'll grab your money http://t.co/fAuSlA6EF8 – #OVDP (hospitality) for Cdn #Snowbirds
— U.S. Citizen Abroad (@USCitizenAbroad) September 11, 2014
Direct Confiscation – Let me count the ways
The above tweet references an article which appeared at CBC.ca and was written by Neil MacDonald who is the Senior CBC Correspondent in Washington. The article is about the increasing U.S. use of “civil forfeiture” to confiscate people’s assets. (There have been previous Isaac Brock posts on the use of civil forfeiture here, here and here.)
To put it simply:
Civil forfeiture is a process where the government simply comes in and directly takes your property and money. As the article in the above tweet notes, cash is particularly susceptible to arbitrary confiscation.
But, what about the confiscation of cash according to U.S. law? For example, what about the confiscation of cash pursuant to Title 31? This issue was recently explored as comments to a blog post about the backlog of renunciations in Toronto.
@Phil..there are already exit controls in place. They just aren’t overt.
1. CBP “interviews” people on the jetway or at border crossings enforcing Title 31 violations -i.e. not reporting $10,000 the country.
2. They regularly scan names on departing flights. IRS issuing Writ ne exeat republica anyone? See:
http://www.forbes.com/sites/jayadkisson/2014/02/07/a-wedding-and-the-writ-of-ne-exeat-republica/
and
Every — and I do mean every — Los Angeles to Dubai flight I have ever taken has a group of uniformed officers checking people for Title 31 violations. To other destination? Meh, nope. Those guys are not checking anyone.
It’s based on a simple principle: “We will do it because we can”. (Interestingly President Clinton noted that this is the least morally defensible reason for a course of conduct.)
Indirect Confiscation (or in some cases clearly intentional) – Let me count the ways:
To continue the context of confiscation, the U.S. government is confiscating the assets of Americans abroad through:
– devaluation of the U.S. dollar
– taxing the devaluation of the U.S. dollar
– the necessity to pay for expensive compliance costs
– Double taxation
– FATCA penalties (added courtesy of Mark Twain)
– Medicare and Social Security penalties (added courtesy of NotAmused)
– Social Security (not available to many Americans abroad)
– No right to vote for certain Americans abroad
… and more
Third Party Confiscation – The U.S. Government Encourages Third Party Asset Confiscation
This is an “unintended consequence” of FATCA. FATCA requires a “hunt for American Citizens”. Once discovered, both foreign governments and criminal organization may seize their assets. See the following post at Citizenship Solutions which discusses how U.S. citizens in Saudi Arabia may lose their property courtesy of the Saudi Government.
But, I digress. To get back to the original article, which should be read by anybody planning on visiting the United States of America:
The article includes:
Seizing suspected drug money has been legal here for decades, but after 9/11 police acquired a whole new set of powers and justifications. And they set about using them for profit.
The Washington Post this week reported that in the past 13 years, there have been 61,998 cash seizures on roadways and elsewhere without use of search warrants.
The total haul: $2.5 billion, divided pretty much equally between the U.S. government and state and local authorities (hence the Kafkaesque “equitable sharing” euphemism).
Half of the seizures, according to the Post, were below $8,800. Only a sixth of those who had money taken from them pursued its return.
Some, no doubt, were indeed drug dealers or money launderers and just walked away from the money. Others just couldn’t spare the expense and time of going to court.
Of those who did, though, nearly half got their money back, a statistic that fairly screams about the legitimacy of the seizures.
So does another fact: In many cases, authorities offer half the money back – money they’d claimed was proceeds of crime. And when they do issue a cheque, they almost always insist their victim sign a legal release promising never to sue.
It would also appear police like to target minorities, who tend to be cooperative and less likely to hire a lawyer.
Civil rights advocates have documented all sorts of outright legal theft:
- The (minority) businessman from Georgia who was relieved of $75,000 he’d raised from relatives to buy a restaurant in Louisiana.
- The (minority) church leaders who were carrying nearly $30,000 from their Baltimore parishioners to carry out church activities in North Carolina and El Salvador.
- The young college grad with no criminal record on his way to a job interview out West who was relieved of $2,500 lent to him by his dad for the trip.
News outlets here have reported many such abuses over the years. But the Washington Post’s latest investigation exposes money-grabbing as big business.
It involves a nationwide network of enforcement agencies (except in the few states that have banned it) that operates with the help of a vast private intelligence service called “Black Asphalt” (police forces pay an enrolment fee of $19.95). The network uses consultants and trainers who either charge fees or operate on contingency, keeping a percentage of cash seized by their police pupils.
Police forces use the money to finance their departmental budgets, sometimes spending it on luxury vehicles, first-class tickets to conferences, and lavish quarters. They regard the money as rightfully theirs. One prosecutor used seized cash to defend herself against a lawsuit brought by people whose cash she seized.
It’s just human nature, really.
Give police the legal ability to take someone’s money, and to claim it’s in the national interest, and then tell them they can keep a nice chunk of it, and what other result could there be?
Travel advice
So, for any law-abiding Canadian thinking about an American road trip, here’s some non-official advice:
Avoid long chats if you’re pulled over. Answer questions politely and concisely, then persistently ask if you are free to go.
Don’t leave litter on the vehicle floor, especially energy drink cans.
Don’t use air or breath fresheners; they could be interpreted as an attempt to mask the smell of drugs.
Don’t be too talkative. Don’t be too quiet. Try not to wear expensive designer clothes. Don’t have tinted windows.
And for heaven’s sake, don’t consent to a search if you are carrying a big roll of legitimate cash.
As the Canadian government notes, there is no law against carrying it here or any legal limit on how much you can carry. But if you’re on an American roadway with a full wallet, in the eyes of thousands of cash-hungry cops you’re a rolling ATM.
The comments are interesting.
Conclusion:
It’s about confiscation, stupid!!
That’s the:
“FATCA Of The Matter”
US DoJ loses money freezing order in Austria against the wife of a former US Ambassador.
http://www.bbc.com/news/world-us-canada-29162057
Perhaps foreign courts will not cooperate with US in certain cases involving future FATCA cases.
How appropriate that you posted this today USCitizenAbroad! While 9/11 evokes sadness and horror it also forces one to face the fact that a lot more than the deaths of thousands of innocent civilians & fall of the Twin Towers (& Bldg 7) happened that day.
I have heard it said that Osama bin Laden achieved more than he ever dreamed of. However, that sentiment seems to be based on what I believe to be, a false assumption. The general public allows this to go on believing the implied justification, that all this is necessary to keep Americans safe. I begin to believe that the most unsafe people on earth are American Homelanders. And just like expats found out that their government could care less about them, eventually the Homelanders will also be forced to see this obscene government for what it is but it will be too late.It won’t matter which Party will be in the White House or controls the Senate and/or the House, The raw “FATCA” of the matter is those who need to control have figured out how to use 9/11 and its associated myth, as a way to do whatever they like.
While I am surprised to hear this is going on, it certainly doesn’t shock one when put in the perspective of the behaviour pattern exhibited by the US in recent years:
Honestly, the “equitable sharing plan?” This is so far off it is actually funny!
So we have the false assumptions which amount to myths: the war on drugs, the war on terror, the war on tax evasion and god-only-knows what next.
In his appearance before the FINA committee on May 14, 2014, John Richardson closed his testimony with something that sums this all up very nicely. (No time to check for exact quote).
“The opposite of truth is not the lie. The opposite of truth is the myth.”
We can only hope that the Canadian government and the rest of the world wakes up and exercise the one tiny bit of the
Americanhuman ideal we currently have the ability to exhibit-the right and more importantly, the responsibility to question and stand up to injustices, regardless of the source.You missed the FATCA confiscation. When a person fails to acknowledge to the local bank, perhaps in Nigeria or Russia or China or North Korea, that he is a US person, that suspected US person then has 30% confiscated of any further transactions, by the USA.
@Tricia Moon
I think the role of 9/11 in restricting US civil liberties is often greatly exaggerated. Yes, 9/11 clearly didn’t help, but it simply allowed authorities to justify a trend that began long before 9/11 and has continued since 9/11. I’ve lived in the USA since the Reagan presidency and with each successive presidential administration the civil liberties atmosphere–especially at the federal level–has gotten more and more grim. And, yes, I think Obama is worse than Bush 43 in that regard.
Clinton got a bit of a free ride on these issues because the economy was going gangbusters during much of his administration, but I think the go-go economy in his time masked increasing encroachments on civil liberties.
9/11 occurred early in the reign of Bush 43 and I do think served to frame the restrictions on civil liberties that were to take place during his administration. But the trend IMHO is longer term and bigger than Bush 43 or 9/11. FATCA for example is the handiwork of Obama and not directly connected to Bush 43 or 9/11.
The attached document shows how civil forfeiture definitely was a trend that began before 9/11 but has gotten worse in recent years:
http://www.ij.org/images/pdf_folder/other_pubs/assetforfeituretoemail.pdf
Right now I think the hope for America is at the state and local level–and every effort should be made to limit the powers of the federal government. Most of what is rotten seems to be federal in nature. If you look at the above document, you see that in some cases states have very reasonable and appropriate limitations on civil forfeiture which are being overridden by out of control federal authority.
There is a new article in the WSJ on FATCA but it is behind a pay wall….if anyone has access perhaps they can share.
http://online.wsj.com/articles/expats-left-frustrated-as-banks-cut-services-abroad-1410465182
Go to GOOGLE NEWS and put the title into their search box. It should come up for you, Steve.
WSJ: Expats Left Frustrated as Banks Cut Services Abroad
Americans Overseas Struggle With Implications of Crackdown on Money Laundering and Tax Evasion
——-
Americans living abroad are being cut off by banks and brokerages as financial institutions seek to steer clear of a U.S. crackdown on money laundering and tax evasion.
…
[Editor’s note: please do not paste copyrighted articles into comments]
– http://online.wsj.com/articles/expats-left-frustrated-as-banks-cut-services-abroad-1410465182
Full Spectrum Dominance – Chris Hedges
http://youtu.be/k36_kV-Ur8g
@Dash 1729
For once we agree! Hallelujah! I was NOT saying 911 was the reason for the eradication of civil liberties but rather, that it has and does, serve the interests of whomever wishes to justify such restrictions. I left the US in 1982 and honestly was not paying attention to such things as I had no reason to suspect anything was changing. I could easily say that I paid no attention to what was going on in the US until the early ’90’s because I began to travel overseas (on the first day of the Persian Gulf War for example) and was nervous about having a US passport. And until my OMG moment in 2011, generally remained unconcerned and uninvolved in things political.
“We can only hope that the Canadian government and the rest of the world wakes up and exercise the one tiny bit of the American human ideal we currently have the ability to exhibit-the right and more importantly, the responsibility to question and stand up to injustices, regardless of the source.”
The only way we’re going to do that, is for us to vote the Conservatives out of power and make sure that our votes and the votes of voting members in our family go towards the Greens or the NDP. I don’t trust the Liberals not to do the same as the PC.
@The_Animal
Yep, sounds about right. Would be good to have some sort of organized approach to that, at least with regard to the expats we can reach.
regarding WSJ wall, I just clicked on their cookies policy and it then started allowing me to read
@USCitizenAbroad
Re: “Indirect confiscation”, 2 more for your list for any self-employed “US person” abroad who is forced to pay into the following programs:
– Medicare: no benefits available whatsoever for those outside the USA
– Social Security: depending on the home country’s treaty with the USA (or lack thereof), benefits may or may not be payable to those outside the USA. Even if benefits are payable, they may be drastically reduced due to the “windfall elimination” clause if that person had also paid into his/her home country’s plan and receives benefits.
What did US citizenship do for murdered US journalist James Foley? -listen to his mother’s interview.
http://edition.cnn.com/2014/09/11/us/james-foley-mother/
If anybody is skeptical about whether Civil Forfeiture in the U.S. happens….
I visited relatives in Ontario this summer. My niece’s American partner told me a “wacko” story of his brother in the U.S. being stopped and having a suitcase full of money that he was carrying from the sale of a house confiscated by the police. I didn’t know what to make of it.
Now, the story still seems utterly wacko, but any sense that it is unlikely has been removed.
The real way to get thru to the politicians is to explain that if Canadians are locked out of the Canadian banks, they will resort to using cash and bitcoin, and the underground economy. There’s the loss of tax revenue to the Ottawa but also the opportunity for drug dealers. I don’t mind if drug dealers buy cars with cash, but some politicians do. (If the last 15 customers bought cars with cash because they are locked out of the banks due to FATCA, then the car dealer won’t bat an eye when the drug dealer comes in and buys a car with cash.)
@Tricia Moon
Glad to hear we agree on this!
I definitely recall the 1st Gulf War as being one of the steps on the general path to degrading civil liberties. It attracted significantly more international support–including from Canada–than the 2nd Gulf War. But there was still definitely concern, even during the 1st Gulf War, that the US was going down a dangerous path. For example, if Saddam Hussein was such a bad guy, why had the US supported him for so many years earlier?
@Shovel
Civil forfeiture has been around for quite awhile. I started hearing about it a fair bit during the Clinton years–part of the reason I don’t think all this stuff started with 9/11, although it has gotten worse after 9/11 and 9/11 has been used as a justification for stepping up the pace.
Incidentally, there was a news report that got a lot of attention regarding Toronto Mayor Rob Ford. Ford’s a controversial guy, of course, but I’m referring to his being stopped in Florida for a DUI in 1999. He apparently threw all his money on the ground when the police approached him. He was almost certainly guilty as charged when it came to the DUI, but I wonder if Ford thought initially that it was a civil forfeiture stop, and that was why he threw his money on the ground. Sort of like offering your money quickly to a mugger so it doesn’t get any worse–in this case the mugger was the police.
I don’t understand, though, why people still carry cash in significant quantities. There are many, many ways in which the carrying of cash is discouraged. Larger denomination bills were taken out of circulation awhile back and the currently largest bill is the $100–which isn’t much these days. Plus cash transactions over a certain amount have to be reported to the authorities–and also if you carry cash in or out of the country. And of course carrying cash leaves you vulnerable to thieves–as it always has–regardless of whether the thieves are working for the police department or just for themselves.
As far back as 1987, my purchase of an airline ticket for about $400 (maybe equivalent to $1000 today) in cash seemed to be viewed quite suspiciously by the airline.
@ ghost66 interesting video.
@ USCitizenAbroad Are you suggesting a connection with these police seizures? Basically the US Government and IRS want the ability to track and seize everything in your bank account anything in the world. All gold/silver purchases and sales in the US are tracked. If you are carrying cash in the US, it may be seized without due process. FATCA is now a virtual Berlin Wall which has the effect of keeping cash and taxpayers in the US. Is this all coincidence? Or is there something more? Even if pure coincidence, this is quite disturbing. It is hard not to conclude that the US has become a police state.
@ ghost66 to clarify, I think Chris Hedges gets most things right, though he has put forth some (minor) inaccurate details and speculation.
@ Tom, you got it! Bitcoin is coming and once expats begin to move their funds into Bitcoin it is completely untouchable. You could have a million dollars connected to nothing more than a passphrase in your brain. Like many ask, how will Bitcoin deal with banks, governments etc? The answer is it will not, it will simply make them irrelevant and of no concern. Mind you, mass adoption is likely 2019 but it’s never to early to begin dabbling in Bitcoin. For the less geeky I recommend an account at Coinbase.com
@pukekonz I’m not sure about all of that. I was asked for a copy of my passport when I opened a Coinbase account. I would imagine the IRS will do its best to track how many BTC you have. My understanding is that the USG now tracks all purchases of silver and gold in the US. But this is interesting:
http://techcrunch.com/2014/09/10/coinbase-europe/
September 15 Update:
This post has been updated to include the identification of:
The FATCA Induced Confiscation of the assets of Americans abroad by other governments.
See:
http://citizenshipsolutions.ca/2014/09/15/fatca-turning-americansabroad-over-to-the-irs-and-foreign-governments/
Thanks, USCitizenAbroad, for highlighting the obscene position in which *US Persons in places like the Kingdom of Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait find themselves in with FATCA.
I hope that these *US Persons* are encouraged to support the US litigation being led by Mr. Bopp. Litigation is the ONLY means of every finding justice for *US Persons Abroad*, however they may be described.
Note: The author, Ms. Jecker, is Virginia La Torre Jeker J.D. There is a lot of good information at her blog at AngloInfo.com.
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