From the back alley of the Compliance Community comes this little tidbit which reinforces concerns about what all those trustworthy banks are going to do with all that shiny US Person customer data once their new FATCA and AEOI (Automatic Exchange of Information to support the OECD’s GATCA) systems get up to cruising speed:
AEOI: Tax reporting doesn’t have to be taxing
From FATCA to AEOI, who knows what the next move will be. And, with confirmation of exact reporting rules around AEOI still up in the air, there is still much uncertainty. The point is that those who continue to paper over the cracks instead of looking for a long term solution run the risk of non-compliance to local and global regulations and reputational damage. On the flip side, financial institutions that adopt flexible technology designed to cater for future unknowns, will avoid any headaches, and have capacity to explore how best to use the new AEOI/FATCA customer data. The silverlining, of course, is that once a firm’s AEOI infrastructure is in place, it provides a goldmine of customer data. Golden nuggets that could then be used for purposes other than keeping the tax authorities happy.
Kind of gives you that warm fuzzy feeling of being wanted and secure (NOT!) Financial Privacy is dead.
@Steve
Someday soon, much more than just financial privacy will be dead, thanks to FATCA and its growing spawn GATCA.
With GATCA, if you are Canadian but used to have the American Snake skin, who is there for GATCA to report to?
This provides a golden opportunity for passport havens to advertise that they are AOEI-free. In other words, their citizens will not be among those whose financial information must be spied upon by banks around the world. Might make a difference to people like me, who are formulating plans for alternative citizenships, then renouncing (and denouncing) the USA. Not that I have anything financially-speaking to hide, but all else being equal, I’ll choose a place that doesn’t sign up to GATCA, AOEI, etc.
@kermitzii
Canadian authorities for GATCA and US authorities for FATCA. Of course, GATCA (CRS – Common Reporting Standard) countries will only be interested in the reporting of offshore accounts held by their own citizens who are currently permanent tax residents of their native countries. This, of course, is a distinction lost on apologists for FATCA. It is also why the US will never sign-up for the OECD’s FATCA lite and will never provide any more reciprocity than it already provides under FATCA, which is the square-root of zero.
Deckard, well I do much math in my research. Square root of zero is either +0 and -0. Depends on the context. It is like CBT either you want it you do not. Maybe it is better talk about imaginary numbers. Square root of negative one. Makes not sense just like CBT.
AEOI? Sounds like an acronym for some kind of terrorist organisation.
FATCA is forcing americans living abroad to create business’s where they get payed in cash to survive. Bravo USA.
I’m going to open up an icecream man business and sell peanuts on the beaches, collect cash, by gold coins with it and keep it well hidden to get out of the banking system.
That’s all that’s left for american citizens to do. The USA really is a great power lol.
The middle ages are back. Got to get your money out of the banks, buy gold, silver, diamonds, whatever with it and hide it well from the King’s men.
@Walt …. sure does …. all we need to hear now is that the Main Servers to gather this data will be located in Tehran, Detroit, Bethnal Green or Istanbul. Oh Joy Oh Allah the beneficient who has endowed the Believers with targeted information on all people everywhere. Imagine the funds to be extorted, the necks to be cut, the kaffirs to be owned and the virgins awaiting our arrival. A fiction writer of lesser imagination than George Orwell could not make this stuff up !
@kermitzii
Darn, I knew I should have stuck with the more colourful “square root of jack shit.” Now I understand that it is also mathematically safer 😉
@ Deckard1138,
Thanks for that valuable reminder that with FATCA, the US presents the FFIs and all the others with great datamining and commercial opportunities to exploit accountholders – as per that quote. I saw other mentions of this potential earlier on in all this, on a compliance condor or FATCAenabler site. Those who are to be FATCAnized are also to be offered up for exploitation to a whole range of groups, interests and entities.
@nervousinvestor;
I am sure that there are plenty of hackers, American homegrown groups of a wide variety of ideological stripes, and organized crime who would like to get their hands on the FATCA data for nefarious purposes. And of course all the officially sanctioned shadowy ones with the alphabet acronyms like the NSA, etc.
@ badger: So true. So very true.
@Badger – Who needs hackers? Just cash will do. I’m there’s some crooked banker or IT worker that will just download the who file on to a USB key and walk straight out the FFIs door.
If Governments are paying reward money for stolen data by people working in banks to uncover hidden bank accounts, getting a US Person file should be a cheaper option if not a walk in the park.
Again if the data is stolen what are the consequences to the FFI – none. The US Person has no recourse and the US Government doesn’t care about its citizen’s security only about the lousy few extra bucks of tax revenue that amounts to a drop in the bucket vis-à-vis the US Federal deficit.
Perhaps the names and addresses of IRS agents living working abroad should be made public if they ever became known in kind.
Madness.
On a related note: I recently met the wife of a banker who works for an international bank in an Asian country I won’t specify (I don’t want to risk incriminating him). He is not American, but says that FATCA is causing unbearable stress not just for US expats, but for bankers like him. He and colleagues around the world went through a month’s training in compliance issues–at enormous expense to the bank–and now since then he finds it hard to sleep…not out of moral dilemma (though there’s that too), but because he and his colleagues are running scared: If they even inadvertently fail to uncover an account under their purview with a “US interest”, or are perceived in any way, even through unintended action, to be sheltering one of their American banking clients, it will cost them their jobs. Yet he feels like a Judas having to report clients–business people he feels responsible for–to this list. In other words, the same arbitrary and pernicious issues that make us US expats lose sleep are affecting bank employees around the world. His wife says he’s been drinking more, sleeping less, and talking about leaving his career of the past 25 years, all over FATCA. I never thought I’d see myself writing this, but I pity the bankers.
@Barbara
Well I don’t feel sorry for Canadian banks more American than I am (have extensive holdings in the US) that demand the Canadian government throw its citizens under the bus to protect their own interests.
What, no one could project that any of this would happen? Don’t we all know by now that US doesn’t care about collateral damage?
@Bubblebustin: It isn’t the banks I pity, but their employees, who now lose sleep over having to snoop on their own clients, many of whom they’ve built a relationship of personal trust with over the years, and being forced to dig up any “US indicia” such as US birthplace, transfer accounts, etc., and then compile information on every account related to them and any of their businesses. So, yes, the banks are to blame for screwing up the lives of both their customers and their employees at the behest of the US government and its proxies in Canada and elsewhere.
Barbara and bubblebustin,
How many of those bank employees will indeed, themselves, be US citizens and subject to all of the same?
Also, for those of us who have our names out there, with our banks likely knowing our identities, will they or won’t they be obligated to do something with that information — or have consequences? I guess I’ll find out one fine day and I will be relaying the next chapter of my family’s story.
Small comfort that we have company in that our *foreign financial institution bankers* have sleepless nights as well.
@Barbara
I don’t mean to be insensitive about any qualms bankers might have about the specific targeting and persecution of their American clients, but unless they are willing to take issue with their employers about it, they are facilitating it. I’m sure that many will get over their feelings, just as others have done throughout history.
bubblebustin and Barbara,
*Just Following Orders* — in fact, isn’t that what our Canadian government is doing too — *Just Following Orders*?
@Barbara et. al.
I often wonder how the architects of FATCA can sleep at night. It’s not like the horrendous damage created by their little brainstorm isn’t patently obvious by now.
How have others said it?
The only thing necessary for the triumph of evil is for good men to do nothing.
All that is needed for the forces of evil to triumph is for enough good men to do nothing.
All that is required for evil to prevail is for good men to do nothing.
In order for ‘evil’ to prevail, all that need happen is for ‘good’ people to do nothing.
All that is needed for evil to prevail is for good men to do nothing.
The surest way for evil to prevail is for good men to do nothing.
All it will take for evil to prevail is for good people to do nothing.
All that is necessary for the forces of evil to take root in the world is for enough good men to do nothing.
All that is needed for the forces of evil to succeed is for enough good men to remain silent.
All it takes for Evil to prevail in this world is for enough good men to do nothing.
The only thing necessary for the triumph of evil is for good men to do nothing.
Thanks, bubblebustin, for the many ways to give that important message.
And we seem to have too many good men and women doing nothing or going their own way when the support of many voices could make such a difference.
I will soon be able to make my next monthly donation to ADCS-ADSC, my small voice. http://www.adcs-adsc.ca/
As I’ve said before, successful banking is about having customers feel that their money’s safe with you. Any doubts about that will have customers running for the doors. No wonder those at the ground level aren’t sleeping at night. After all, there are alternatives…
And who is ultimately going to be held responsible for not detecting the bank customers who are US citizens because of birth abroad to US parents–when there are no indicia? Even a training program can’t help a bank determine whether someone who hasn’t been registered as a US citizen actually is a US citizen….