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!
November 20, 2014 at 11:55 am
Just 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?”
“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)”