…He was asked to sign a declaration that the account and all the money in it had been reported to the tax authorities in his home country and he had paid everything that was due on it.
The man refused and then came the next surprise: The bank refused to let him withdraw his money. He explained that he didn’t speak Hebrew and wanted the declaration to be read and translated by a lawyer. He reminded the bankers that he was a client of long standing and had been told when he opened his account that he would not be asked questions like that. It was all to no avail.
…
Related (from another Brocker):
I remember reading a lawyer wrote that all the g7 wanted fatca type reporting…the u.s took the lead…the rest will follow..the Israel has fatca type arrangements with Europe…probably the igas crush everything related to privacy so it’s easier now.
Here is the fax of Bank Hapolaim, an Israeli bank, requiring Canadians and EU member residents and/or immigrants (or CFCs) from those locations sign away their rights similar to US citizens: Israeli Bank(s) Declaration — shall apply with respect to any existing Account and any future Account, if relevant
Thank you, Japan T, for your comment and your description of reaction of others to the subject of FATCA. I agree as many will here:
The importance of the information in the post of this particular thread and what you describe should not be overlooked. I think many have not taken their view past FATCA to GATCA.
P.S. THIS ARTICLE IS CERTAINLY RELEVANT: http://economia.icaew.com/news/november-2014/fatca-costs-on-the-rise.
Don’t give up trying to educate others. We must not!
Thanks for the comments. I am simultaneously pleased and horrified that I have something to contribute to this discussion.
I have struggled for the past year for a way to summarize all this in a way that won’t bore people new to this with details. I believe I have done so. How can I post my summary and ask everyone here to read it and correct any misinformation and make suggestions?
@ Japan T
You could post your summary on this thread and if the admins have a better place for it they can move it for you. We’d love to hear more of your perspective. We all struggle to find the key to open up the minds of those who you might say are suffering from cognitive dissonance.
Here is a summary I came up with from memory. My notes are unavailable to me while on the trains and subways of Tokyo, when I have time post.
Tear it apart! Any inaccuratacies correct. I need this as spot on as possible.
Some time ago American bankers constructed a money transfer system that functions well enough and is secure enough that it is reported to be the most commonly used route to transfer money across borders. It functioned so well that it was cheaper for bankers in other countries to pay to use this system to move money than to build their own. If I want to send money from my bank here in Japan to someone in Germany, it will most likely pass through the US on its way. Buy something online from Spain, the credit card payment goes through this system. Vacationing in Thailand or Europe and go to an ATM to pull out cash, your money most likely passes through this network set up by American banks somewhere along its way to you. The US government has hijacked this system.
In 2010, President Obama signed the HIRE act into law. Attached to the bill was the required method of funding. In this case The Foreign Account Tax Compliance Act (FATCA) is the method of funding.
FATCA requires all foreign (from the perspective of the US) financial institutions (FFIs) to report all monthly financial activity of US Persons to the US Internal Revenue Service (IRS). FFIs include banks, investment firms, insurance companies, pension funds and others.
Who exactly are “US Persons” has not yet been defined despite reporting having started on October first of this year, but do include the following; all US citizens and many who once were a citizen of the US (So, even if I had become a Japanese citizen, I would still be a US Person.) their spouses, regardless of their nationality or residence and any children from such a union regardless of place of birth and/ or residence. Anyone who works for an American founded corporation is also a US Person. It was very recently reported that there are a record three million American citizens born in the US who now live abroad. The US government estimates that there are six to seven million US Persons living outside the US who are subject to US tax law. Who are these 3 to 4 million US Persons?
Any FFI that doesn’t dance to Washington’s tune will be charged a noncompliance fee of thirty percent (30%) of any amount sent to, from, within or through the US. This would cause severe damage to the financial industry of any nation and possibly be fatal to some. But how can the US enforce this? Remember that the most common way to transfer money around the world has been hijacked by the US. In a word, extortion. My government is extorting the world.
Compliance is not cheap, however. The president of Canada’s largest bank and at least two banking organizations with in Europe have estimated the cost of the new computer system needed to comply with the reporting requirements to be $100,000,000 per large bank.
Knowing that is illegal in most countries for FFIs to give such information to anyone, especially a foreign government, without some kind of due process, the US Treasury Department will allow foreign nations to enter into InterGovernmental Agreements (IGAs) in which the signatory nations would agree to amend or bend their laws to allow their financial institutions to comply with these dictates from Washington. In return, Treasury will allow FFIs to report to their own governments which would then forward the information on to the IRS, thereby greatly reducing the financial burden on the individual banks. Faced with a choice between paying an additional 30% in fees for any money transfer across borders or buying a $100,000,000 reporting system in the absence of an IGA, bankers petitioned their governments to sign the offered IGA or risk financial collapse.
These IGAs violate not only the laws of the nations signing them with the US, but also, most likely international law and certainly do violate US law as well!
What must be reported? Although the reports are sent annually, FFI’s must report the highest monthly balance within any account held by a US Person in Dollars. This is a momentous task. Even if the balance remains the same in the local currency, exchange rates fluctuate daily. This requires a daily calculation of an account’s balance in dollars. Insurance companies and pension funds are also required to report the highest monthly value in US dollars of all policies and accounts held by US persons.
Banks simply do not have the resources to perform this task and risk the penalties stated above if they misreport. Thus, banks in Europe and around the world are now forbidding Americans from opening new accounts and closing the accounts of current US Person account holders.
Yeah, well so what, I’m not an American. It doesn’t effect me. You sort out your own problems and leave me alone!
Not so fast. By signing IGAs with the US, all signatory nations also agreed to exchange information amongst themselves. So, the UK agreed to also exchange all financial data of not only Japanese citizens who have accounts in the UK but of all Japanese residents. And so too did Japan agree to report to the UK all British nationals and UK residents who have accounts in Japan. And thus it is for all nations that have signed IGAs with the US.
This is how a friend of mine living just outside Tokyo, Japan, a British national has had his accounts in the UK closed. His now former banks have to report to the Japanese government and the reporting is too cumbersome to be bothered with. Likewise, he is experiencing great difficulty with his accounts in Japan as they have to report to the UK.
ARE YOU prepared for life without a bank account, insurance and pension?
“By signing IGAs with the US, all signatory nations also agreed to exchange information amongst themselves. So, the UK agreed to also exchange all financial data of not only Japanese citizens who have accounts in the UK but of all Japanese residents. And so too did Japan agree to report to the UK all British nationals and UK residents who have accounts in Japan. And thus it is for all nations that have signed IGAs with the US.”
Can anybody here verify if the above is true? If it is, the mobility of people will quickly grind to a halt.
Yes, please help me verify this. I just got a clearer picture of this from one of my sourses for this point. It may not be as I understood it.
discussed on the other post. I think it means that they signed and committed to OECD GATCA during the October meeting. SEe the other post for a list.