Posting here for further discussion: http://isaacbrocksociety.ca/consulate2/comment-page-36/#comment-4379627
It is apparent procedures and even specific questions to us from those asking will vary from one “foreign financial institution” (better known as our local CANADIAN banks, credit unions, insurance companies, etc.) to another, not to mention one country to another. Sort of like our experiences at US Consulates around the world — not necessarily the same experience for one person than another!
KCam says
November 20, 2014 at 11:55 amJust following up on the RBC issue for anyone that is interested. RBC froze access to my new DI account until they see my CLN. They allowed the money to come in, but then froze it! They want this because they did not like that I answered positively to “born in the US” on one form and filled out a W8 Ben saying I am not a US citizen (because I relinquished prior to 1995 through government employment.)
So, I figured I’d give them a chance to resolve:
1. By not worrying about it because TFSAs and RRSPs are not reportable and that is what I ahve in the account, or
2. By allowing me to provide “reasonable explanation” other than a CLN that explains why I am not a US citizen, and by showing that I am not required to have notified the state department of my renunciation because it occured prior to 1995.After several phone calls, the bank advises that they will not accept anything other than a CLN. Further, while RRSPs and TFSAs are not reportable, their policy is collect the paperwork regardless. This means my only option is to liquidate or transfer my account to have access to manage my funds prior to receiving a CLN.
Does anyone have experience with a Canadian FI that would not hold this same policy?
…(Further) it is a registered account and was a transfer from another FI. They accepted the transfer with the paperwork provided, then froze it. They will only allow me to transfer or withdraw but can not manage the funds within it.
George comments to @WhatAmI,
“Still, to refuse to hold registered accounts without a CLN is a BAD sign.”
Its not a “bad sign” rather its Ultra Vires and unlawful discrimination.
Everything needs to be documented in writing and the firm needs to be first advised they will be taken to Court if they do not change and if they fail to change be taken to Court.
Note I am assuming this is FATCA related and not Registration S related of the Securities Act which is another kettle of fish.
MORE from US_Foreign_Person and George:
@KCam, I fully agree with @USFP “I would resolve the situation with them… once the account is *unfrozen* then I would close it up & go elsewhere…”
You have no future with RBC DI but that should not stop you from getting everything in writing first. You then find another FI.
You said that you verbally told them you relinquished when you took Canadian employment. Well to be brutally honest if I was a RBC DI employee, that statement alone would not move me at all. First, how the hell am I to know that working for the Canadian Government is potentially expatriating under 8 US Code IF there is intent?
You need to put in writing what exactly you did with lots of corroborating documents, when you did it with lots of corroborating documents, you need to cite US Law as it applied at the time with footnotes and copies, you then need to cite the requirements under Canadian Law with footnotes and copies. All your documents will need to be certified by a notary/lawyer as true and correct. You will also need to swear an affidavit that you in fact relinquished.
And then send it to them special delivery so someone is on the hook signing for it.
Having received all that they need to do something and you need to demand it in writing if they call you on the phone.
If they reject your thorough well documented “reasonable explanation” then you have their written response in which you can take legal action in Canadian Court.
But again, “I am not a US Citizen because I worked for the Government” over the phone to a customer service rep is not going to float far.
I did the above for a EU FI and received a written reply thanking me for the information and that my file would be updated within seven business days.
AND, from George…
@All, this with @KCam is a perfect example as to why asking place of birth which is Ultra Vires according to the CRA website, is causing discrimination to Canadian ONLY Citizens who have relinquished their clinging US Citizenship and further said Canadian ONLY Citizen is being further discriminated against based on a second Ultra Vires action requiring a CLN instead of a reasonable explanation which is a valid cure option under Canadian Law and in the IGA.
From Anne Frank:
@KCAM and others: It would be useful for people to all attempt to maintain a consistent approach to these problems and to be firm.
1. Nothing in C-31 or the guidelines produced by CRA authorizes a bank to request place of birth nor obliges any customer to provide it. It seems to me that there is little chance to argue that they cannot demand new accounts self-certify that they are not US Persons, but there is no obligation to go behind that assertion nor any explicit blessing in C-31 or the IGA to authorize personal inquiries such as that. I would suggest that any and all can take the view that no FI can demand place of birth or parentage and all should refuse it on principle.
2. If RBC is refusing to allow access to a TFSA or RRSP on the basis of a misguided demand for a CLN, it is time somebody made a complaint to their regulator (OSFI – Office of the Superintendent of Financial Instutiions) with a copy to the Privacy Commissioner and the Human Rights Commission. All relevant addresses etc. can be obtained in 30 seconds on Google. That will escalate the situation in a hurry.
The IGA requires NOTHING in the case of registered accounts to begin with, and their “practice” is an unsanctioned violation of your right to privacy and none of their business. Secondly, the IGA only speaks of the FI obtaining a CLN or “reasonable explanation” for the lack of one. If you state that you relinquished before 1995 when there was no shred of a requirement for a CLN, I can see no reason why they should reject that explanation out of hand as failing to meet the standard. To the contrary, it strikes me as eminently reasonable: you lost your citizenship in accordance with US law at the time and from and after that minute, the US had no rights in you whatsover. A subsequent (tax code) requirement for CLN’s mattered no more to you than changes to zoning laws in Beijing – none of your affair. Remember – the IGA made asking for a CLN or reasonable explanation purely optional. The FI was only excused for NOT turning someone over if they had that explanation but under the IGA as drafted they could ALWAYS turn in a suspected US Person just in case with impunity. Bill C-31 (to Canada’s limited credit) REQUIRED FI’s to engage in that back checking. As a result, “reasonable explanation” is not merely limited to the whim of a compliance officer at RBC. You have rights in what that means as well. It will mean what it is interpreted to mean by the courts, by Human Rights Commissions, by OSFI (their regulator) etc. If you feel up to it, you can and should push back.
UPDATE 21 NOVEMBER 2014
“What will they do if you do not provide YOUR Certificate of Loss of Nationality?”
George says:
“Well the issue has been addressed in the EU (Netherlands). The Netherlands Banking Association issued specific guidance for a standard form used by all FIs. It covers not having a CLN and what needs to be “demonstrated by the client (reasonable explanation)”
ENG_FATCA Guidance Dutch self-certification form natural persons
The ScotiaBank self certification as supplied by Tom is very interesting in that it does not ask for place of birth or CLN. Seems pretty good to me.
@Tom,
For anybody who doesn’t know, the $50K reporting threshold is an election FIs can make or ignore.
Even when a FI elects to use the $50K threshold, I wouldn’t be surprised that they get all clients (with US indicia) to fill out the forms anyway, so they’ll be ready when/if the balance eventually creeps over the threshold. It makes sense to do it all now and get it over with rather than tying up staff on an ongoing basis for many years chasing down FATCA forms and certification when the circumstances change and require it.
When I phoned the number shown, they said there is no minimum reporting threshold and the account will be reported to CRA. Note that I spotted my debit card number in the reply and redacted the non-public portion of it. That is an important security step to check for before posting anything from a bank. First redact it with Notepad and then copy that to the clipboard, so you cannot accidentally post it.
Message:Response to your message of November 25, 2014.
November 27, 2014
Dear Mr. Alciere,
Thank you for taking the time to write us.
The Foreign Account Tax Compliance Act (FATCA) is a U.S. legislation to identify U.S. persons who maintain financial accounts outside of the U.S. Its intent is to prevent U.S. taxpayers from using financial accounts outside of the U.S. to evade taxes. Canada has signed an agreement with the U.S. supporting FATCA bringing new Canadian Banking Regulations effective July 1, 2014.
Canadian banking regulations now require that we identify and record the U.S. tax status of our customers when it is determined a specific personal or non-personal customer may be impacted. Scotiabank intends to meet all obligations imposed under FATCA and any associated local legislation across our entire global network.
For further information, kindly contact us at 1-877-660-6633 as we have a dedicated line available for further assistance.
Thank you for choosing Scotiabank. We value your business and look forward to assisting you again in the future.
Regards,
Yohan Gayle | Email and Information Centre
Scotiabank | P.O. Box 4100, Postal Station ‘A’ Toronto Ontario, M5W 1T1
http://scotiabank.com
Scotiabank is a business name used by The Bank of Nova Scotia
On 11/25/14 6:08 PM, 453[REDACTED]@solinbox.bns wrote:
I recently got my FATCA forms and I suspect they were sent to me in error:
1.) I am definitely a U.S. Person but.
2.) FATCA-related legislation only applies if the balance of the account reaches the 50,000 USD threshold, which my account does not. So why does the bank need these forms? And does the bank intend to report the account?
Just received my first witch hunt letter – from the building society where I have been a member since the 1970s. (I would have opened the account back then using a US passport for ID.) ISAs are exempt but my current and savings accounts are no where near the $50,000 reporting threshold so it appears they have no minimum for reporting purposes. They at least had the decency to use their own forms, rather than the US ones.
Two simple forms – ‘A’ to confirm you are a US citizen or tax resident, ‘B’ to confirm you are not. B requires identification (passport or drivers license, etc) and ‘if you were born in the US’ in addition you need to provide a certified copy of your CLN – no option listed to give a reasonable explanation. US personhood through parentage, green card, etc isn’t mentioned at all.
Also, it says if you don’t reply then the ‘regulations’ still require them to share your account information with Her Majesty’s Revenue and Customs. No mention that HMRC will send your personal account info on to a foreign government tax collection agency.
The reason stated for the letter is ‘The International Tax Compliance Regulations’. There is no direct mention of FATCA at all, except a ‘for more information’ link at the end of the letter: hmrc.gov.uk/fatca which takes you to a page saying ‘this item has been archived’. I did a FATCA search on the HMRC home page and what comes up is mainly all the technical stuff needed by the FFIs. I couldn’t find an easy path to an explanation for individuals unaware of all this. A deliberate oversight?
I no longer bear the US taint, and knew letters would be coming at some point, but it just brings all the bitterness and feelings of nausea to the surface yet again. Makes me feel quite tearful and outraged at the same time. Not something I had ever experienced before this tyranny began.
@Old English, I received the exact same letter from my building society today and had to, in fact, pop into my branch with all my documents including my birth certificate and marriage certificate (as well as my passport and CLN). They were concerned that my account was in my maiden name so are changing it to my full married name as appears on my CLN/passport.
I also felt quite upset about having to go in there, especially as I’ll never know for sure whether they’ll report my accounts to HMRC for FATCA or not!! They claim they won’t but I get the impression that they will err on caution and over – report to cover themselves. At least I feel better in that I have explicitly explained and proven to them that I am no longer a USC. …However, I wonder if at some future point they may start insisting on also proving full tax compliance, such as FBARs and having filed 8854 to certify having logged out of the US tax system!!
@OldEnglish, @MonaLisa
Do you know whether your building societies contacting everyone on their books?
@KingOfTheRoad
No form has come as yet for my British husband. He has an account there only in his name, in addition to those we hold jointly. My cover letter did say I was sent the forms because I had US indica so I am guessing only those with the U.S. branding have been contacted.
@Kingoftheroad, my form also mentioned that they needed to verify my US status because they had me down as having US indicia. I opened the account some twenty years ago with a US passport.
@OldEnglish and @monalisa,
Sorry to hear that you had to go through that – and prove that you are no longer US persons/citizens. I am also no longer a US citizen – and I am angry and resent that even after going through all the hoops that entailed, FIs may at some point ask me to prove to them that I am not – forever?
It is nauseating and insupportable that one would have to prove one’s lack of US citizenship to a bank or other FI. Disgusting.
@Badger, indeed it is disgusting, especially from a building society without any presence in the USA. However, I can also see why they feel the need to err on caution and do their due diligence. It would not at all surprise me if they were to gradually insist on even more proof of non -US-PERSONHOOD, especially as they could unwittingly have green card holders or non US citizens who have spent too many days in the US and thus are residence aliens, etc.
@Old English
I haven’t had anything yet, but always have generally had everything on my EU passport because I wanted everything financial to match up with the information my employer had. The only difference is my main bank where an employee took exception to it and changed it. I don’t think it was FATCA, since it was a while back. Officialdom is just funny sometimes. I heard about a dual U.S./German national working in the U.K. on the German passport who was told off by a U.K. border guard for not having his U.S. passport on him while coming in from another E.U. country.
Things could be worse. I have heard of one European non-EU, non-EEA foreign country without an IGA where the financial insitutions are trying to unearth U.S. persons by putting questions about U.S. persons into things like applications for the gas station loyalty cards they operate and even the cards linked to child benefit. When people ask, sometimes they are told that it is about FATCA, but sometimes they are told that it is part of a crackdown on terrorism or has to do with economic sanctions. In this same country, the banks are closing the accounts of U.S. residents with government backing to avoid FATCA, but the government isn’t mentioning that the law would also impact non-U.S. residents who are U.S. persons. So someone with U.S. ties could think that they were o.k. because they aren’t a terrorist, but then give answers that might cost them their acount. Brilliant.
In the EU, IGAs I have looked at exempt “credit unions” or “local banks” or “Financial Institutions with a Local Client Base” from reporting (there are many conditions, and I could not find, in practice, a local bank that billed itself as such an institution).
I’m looking at the UK IGA now: Annex II, NON-REPORTING UK FINANCIAL INSTITUTIONS
AND PRODUCTS
Sorry, messed up the quote thingie. Here is what I wanted to post from UK IGA:
Annex II, NON-REPORTING UK FINANCIAL INSTITUTIONS
AND PRODUCTS
II. Deemed-Compliant Financial Institutions. The following categories of institutions are
Non-Reporting United Kingdom Financial Institutions that are treated as deemed-compliant
FFIs for purposes of section 1471 of the U.S. Internal Revenue Code:
A. Non-profit Organisations
Any entity registered as a charity with the Charity Commission of England
and Wales
…
B. Financial Institutions with a Local Client Base
1. Any Financial Institution, including any of the entities listed in this
subparagraph 1, that meets the requirements of subparagraph 2, below:
Credit Unions – a body corporate registered under the Industrial and
Provident Societies Act 1965 as a credit union in accordance with the
Credit Unions Act or a body corporate registered under the Credit Unions
(Northern Ireland) Order 1985 or a body corporate registered under the
Industrial and Provident Societies Act (Northern Ireland) 1969 as a credit
union
…
Building Societies – a building society incorporated or deemed to be
incorporated under the Building Societies Act 1986 (c. 53)
Mutual Societies – as defined in the Building Societies (Funding) and
Mutual Societies (Transfers) Act 2007
@Fred, that seems correct but I believe some of the larger building societies such as Nationwide may still have some overseas operations so are erring on caution. I also believe Nationwide may be deemed to large not to be reporting. Not sure
It is infuriating that the world was scared of FATCA’s sanctions involving the threat of confication of 30% of US source income. Does most of the world have US-source income??? Aren’t there any banks with no US business? They could have ignored FATCA.
But I guess most banks are part of big groups and wanted IGAs.
But even the FATCA IGAs allow for non-reporting institutions and thresholds. It is becoming clear that all financial institutions are scared as hell, and want to be even more compliant than necessary, whether the account is under the reporting threshold is not relevant to them.
I do not understand this. Has anyone found local banks or deemed-compliant credit unions that don’t care if you are a US person? What would happen to them if the opened an account for a US born Canadian, or other?
@Fred,
I have found 3 Manitoba-based credit unions that are deemed compliant and non-reporting due to their local client base. They are available only to Canadian residents. It is fine if you are a US citizen, as long as you live in Canada.
AcceleRate Financial
Achieva Financial
Implicity Financial