cross-posted from the ADCSovereightyblog
Which will come first: A decision in the FATCA legal challenge or the first exchange of info? http://t.co/SZGJz5NwiX via @legalpost
— Citizenship Lawyer (@ExpatriationLaw) August 26, 2015
Note the final sentence:
“This is big stuff and it’s right around the corner,” Berg says. “And in light of the federal election, the decision may have electoral consequences.”
Originally posted on Financial Post
The first exchange of information under the U.S. Foreign Account Tax Compliance Act (FATCA) is scheduled to happen next month — unless a legal challenge of the domestic legislation enabling FATCA puts a stop to it.
The plaintiffs, two dual Canadian-U.S. citizens, claim that the legislation contravenes the U.S.-Canada Treaty, and that the treaty prohibits the exchange of information required by FATCA. The Federal Court of Canada has committed to issuing its decision in the case before Sept. 15, just a few weeks before Canadians elect new federal government.
“If the courts hold for the plaintiff, the planned implementation of CRS is also in jeopardy because it is modeled on FATCA,” says Roy Berg, director of U.S. tax law with Moodys Gartner Tax Law LLP in Calgary.
CRS, or the common reporting standard, is a proposed tax information exchange system that would swap financial data between more than 60…
View original 165 more words
More of the same “truthiness” we’ve come to expect from FP.
As I posted in the other thread:
Julius Melnitzer, one of the authors of that Financial Post article, is a convicted criminal and a disbarred lawyer who defrauded five Canadian banks of $67 million.
https://en.wikipedia.org/wiki/Julius_Melnitzer
Melnitzer has written several articles about FATCA for the Financial Post. He was a prominent lawyer in London Ontario. His name is well remembered by almost anyone over the age of 50 here–more for his crimes than for his previous legal work.
It always boggles my mind when I see Melnitzer writing about FATCA. Financial Post has only accepted one article that I submitted to them. He often quotes American citizen Roy Berg. .
It seems Financial Post prefer a convicted criminal referencing an American citizen over a law-abiding Canadian citizen.
Interesting to note that what is getting into the news about FATCA is written by former criminals and disbarred lawyers. Although I do like the final sentence from Roy Berg who is simply a compliance condor:
“This is big stuff and it’s right around the corner,” Berg says. “And in light of the federal election, the decision may have electoral consequences.”
Let’s hope these electoral consequences mean no more Conservative government in Canada.
Here’s more of today’s news from more compliance condors. They ask, “Do you have any bank or other financial accounts in foreign institutions”? :
http://www.insidecounsel.com/2015/08/26/understanding-fbar-and-fatca-what-anyone-with-a-f?ref=hp-opinion
The arrogance to assume that our checking and savings accounts in our home country are foreign financial accounts!
Hey, let’s just be happy that we’re getting even THIS coverage in the main stream media. I do wish our side would get interviewed sometime though.
Contrary to what Mr. Berg says, the CRS and FATCA/CBT are not the same thing. FATCA is a unilateral U.S. law that was enacted in support of CBT. U.S. CBT is a feature of U.S. tax law where no U.S. citizen/Green Card holder or even a Snow bird who commits the error of staying in the U.S. too long are deemed to be U.S. persons and thus subject to U.S. tax and investment restrictions even if they are not resident in the U.S. The U.S. will not sign any tax treaty that does not include what is called the, Savings Clause. This clause spells out clearly that all people who the U.S. has determined are U.S. persons and are resident in the other country are considered to be also tax resident in the U.S. Basically the U.S. reserves the right to define the word residency in a way that is contrary to what anyone in any country would consider to be the normal meaning of residency, which is actual physical presence. Basically U.S. territory goes wherever the U.S. person goes.
This is an important thing to point out because this is how CRS and FATCA/CBT differ from each other. CRS is not extraterritorial in nature because CRS only requires that countries report on the income of citizens who are not resident in the country where the account is held. In other words it follows Canada’s long standing practise of reporting to the U.S. on the Canadian financial accounts of U.S. residents, as defined by actual physical residence. Under the U.S./Canada Tax treaty this was always the practise and the U.S. never once objected to it until the arrival of FATCA.
FATCA was written solely by the U.S. The U.S. has allowed other nations to make some input but the U.S. has only allowed such input only to the extent that it felt was necessary in order to get them to sign on and save face with their electorate. The FATCA IGA’s clearly spell out that the U.S. reserves the sole right to make changes to the IGA at anytime. Which means that a country that signs and IGA really doesn’t know what it is signing. The document that it is signing now may not be the document that it is bound by at some future date. In other words the IGA’s are more or less blank checks that are written to the U.S. government.
FATCA/CBT are extraterritorial in that they mandate that the country in which the U.S. person is resident is obligated to obey U.S. law first. This is pretty well spelled out in the IGA’s because they all have clauses which state that local laws that frustrate the IGA are abrogated by the other signatory country. This is the crux of what the court case is about. The CRS does not require signatory countries to remove their constitutional protections from anyone who is a resident of that country even though they may also be a citizen of another country. America feels that it is too important to be bound by the constitutions of other nations. In this respect America is being very hypocritical when you consider how it talks about the rule of law but refuses to respect the rule of law in other nations. America does not consider the sovereignty of other nations to be on the same level as is its sovereignty.
I would also like to point out the signing on to the CRS was voluntary whereas signing the IGA was done at the point of a financial gun. The gun is the threatened 30% withholding on all U.S. source monetary transfers to Canadian financial institutions. These crippling sanctions were the only thing that would in the end force any country to sign an IGA with America since the other country gets nothing out of the IGA. The reason that other countries get nothing is because they practise either Residence Based/Territorial taxation. The only thing that the U.S. offers in the IGA is a vague promise to work toward enacting laws in the U.S. that would obligate it to do similar reporting. Now how any country can go around the world and demand of other countries that they enact laws that are in its favor while not having previously enacted those same laws is beyond belief. Even if the U.S. was bound by the same rules as it is attempting to bind others the truth is that it would still be pointless because the IGA is pointless if your tax system is based on RBT.
Now the Canadian government knows all of this but it refuses to publicly speak up and reprimand Mr. Berg for his incorrect statements because if the Minister of Finance were to do so then it would be making the case for the plaintiffs. It is convenient for the Canadian government to allow this error to be stated because it serves its case for signing the IGA.
Last of all I would like to say that I am curious as to how Mr. Berg has become the torch bearer for FATCA/CBT/IGA in Canada. Aren’t there any other opinions out there that the media can find?
“This is big stuff and it’s right around the corner,” Berg says. “And in light of the federal election, the decision may have electoral consequences.”
Really? What “electoral consequences” could this decision have? Those of us impacted are certainly not voting Conservative, regardless of the decision. Nobody outside of “us” know anything about FATCA so how could a win or lose impact the election?
Recalcitrant…..great piece of writing. Please post the same over at the FP in the comments section. Here, you’re just preaching to the choir. ; )
Kind of scares me Berg’s taking an interest in Canadian politics. I imagined him spreading his condor wings and flying home one day…
@Recalcitrant
In your excellent little essay, you say, “The FATCA IGA’s clearly spell out that the U.S. reserves the sole right to make changes to the IGA at anytime.”
Can you cite chapter and verse on this? I guess this aspect, assuming you are right, is new to me.
recalcitrantexpat,
Your analytical comment here is what should be reported in Canadian media!
Your analysis also needs to be understood — what the Conservative government has already signed away for Canada in the IGA allowing FATCA law to override Canadian laws and the Charter of Rights and Freedoms.
As well, every Canadian should know, as you point out, that the Conservative government signed a blank cheque with the US, the terms of which the US says (and the Canadian Conservative government agreed) can be changed (only by the US) at any time in the future. That is indeed an important issue that Canadians take into consideration as we go to the polls to vote for the next government of Canada. What kind of irresponsibility is that contract?
What would any Party Leader say about that blank cheque in favour of the USA over Canada? Spineless if they don’t have an opinion.
The government also signed the OECD agreement as they are members of the G’s. (G8,G20)
The ONLY differences between FATCA and GATCA ( OECD CRS) is that FATCA is citizenship based, inasmuch as the US gets to decide just WHO is a ‘US Citizen for tax purposes’ whenever they wish however they wish to justify information ‘sharing’. CRS is Residence based. And the FATCA model ( Illegal without IGAs) is used by OECD to go quite beyond the sharing between two countries to that of information being sent to OECD through the CRS for the OECD to use as they wish.
Without any justification for the gathering of the information in the first place.
NO probable cause. NO warrant.
Look at this way: FATCA violated Canada’s sovereignty and Canada’s government of the day
(The Conservatives) signed the IGA, the very instrument allowing an illegal FATCA to do just that.
Canada signed the OECD allowing OECD to violate Canada’s sovereignty and the information is slated to be turned over beginning in 2018.
The OECD CRS is GLOBAL FATCA for all. NO probable cause. NO Warrants.
http://www.oecd.org/ctp/exchange-of-tax-information/automatic-exchange-financial-account-information-common-reporting-standard.pdf
And James Jatras Excellent Statement:
http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=157&title=statement-in-support-of-fatca-repeal-andagainst-unauthorized-international-agreements
From that Statement:
“FATCA’s worldwide implementation has been assisted by the Organization for Economic Cooperation and Development (OECD) to pave the way for OECD’s global FATCA, known as “GATCA,” and what OECD’s central planners call a new “global standard” of indiscriminate financial abrogation of personal privacy by governments, known as “Automatic Exchange of Information” (AEOI) modeled on FATCA;”
What we know is that Roy Berg will never get to meet Roger Conklin, Marcio V Pinheiro, or Andy Sundberg. They are together in a place that Roy Berg will never see.
The Financial Post continues to practice yellow journalism and media malpractice.
If you are going to consult someone for an article, for an objective opinion, why not find the person who is making a shitload of money off the issue.
Would you consult a pimp as your only source if you were doing an objective article on the pros and cons of prostitution?
Here’s a question that might be considered weird for those of you who are in the midst of fighting this good fight.
Has anybody here in Brock-land considered reaching out to Donald Trump’s campaign people about birthright citizenship?
I am a homelander who had hoped to retire overseas and stumbled upon IsaacBrockSociety some time back and have kept up because I came to realize that your issues are also my issues, especially once I relocate.
Donald Trump, in one of his latest conversations with reporter Jorge Ramos of Univision (in the news yesterday, I think), has said that he has legal experts that claim that citizenship in the US is based on birthplace due to the 14th Amendment of the US Constitution. But Trump has also said that in addition to that, he also has experts who say that the 14th Amendment of the US Constitution DOES NOT AUTOMATICALLY CONFER CITIZENSHIP by virtue of ONLY birth on US soil. According to Trump, these legal experts he quotes are saying that the 14th Amendment does not need to be changed.
For some reason as I was catching up on my Brock reading, that just hit me like a ton of bricks as possibly related to FATCA issues, at the very minimum.
Now granted, Mr. Trump’s points are mainly about illegal immigration INTO the US, but some of the legal scholars he is quoting are saying that citizenship based solely on where someone is born is not actually all there is to it in the US, and my understanding is that it could become HUGE for somebody who is stuck in the FATCA or other compliance net due to thinking that they are NOT a US citizen but the IRS thinks that they are.
I think it might be a good idea to find out who those experts are and see if this could potentially help those who were born in the US but then relocated as a child.
@Petros
“Would you consult a pimp as your only source if you were doing an objective article on the pros and cons of prostitution?”
Right on.
@ Bubblebustin
I think this is not the first time you provided grist for my paradoodling mill …
“Condor” — a parody of “Snowbird”
Beneath the FATCA mantle cold and mean
The condor lies awaiting
For new clients to be seen
The condor sings the song he always sings
And speaks to them of taxes
And the penalties they bring
When we were young
Our minds were young then too
Anything our MPs told us
That’s the thing that we would do
But now we see such emptiness within
And the thing that we want most in life
Is challenge them and win
Spread your condor wings and fly away
And take that FATCA with you
Where it came from one dark day
MPs who once we trusted were untrue
And if they could, we think that they should
Fly away with you
Good sense within our reason seems to say
That he’ll try to break our spirits down
Should he decide to stay
So U.S. condor
We encourage you go
To that land across the border
Where bad legislation grows
Spread your condor wings and fly away
And take that FATCA with you
Where it came from one dark day
MPs who once we trusted were untrue
And if they could, we think that they should
Fly away with you
Yeah, if they could, we think that they should
Fl-y-y-y-y away with you
Getmikey : the US is built on birthplace citizenship. It’s intriguing for a few minutes in our context here to fantasize about this.
But Trump is full of hot air.
The root problem is citizenship based taxation.
Truly, and I say this as a Democrat Abroad (!?), we need some sensible anti Fatca Republicans in power, with a good dose of Rand Paul’s ideas. The problem is that they continue to make complete bozos out of themselves – and Trump only makes it worse.
Nice work, EmBee. It’s tedious waiting for the court decision and for this long election campaign to be over. So it’s good of you to provide some entertainment.
Seriously, I don’t think the Canadian FATCA/IGA will get much more publicity until the court rules in favour of the ADCS plaintiffs. Then things should quickly get interesting. Meanwhile we have to work to get rid of the Harper government and elect an NDP government. I think Tom Mulcair will have the courage to confront the US FATCA extortion directly, although I hope a Liberal government would do so as well. We know what Harper’s government will do. It already has caved to the US..
Take a bow, EmBee.
Wikipedia says that in 2007 Anne Murray remade “Snowbird” for her Anne Murray Duets: Friends & Legends album, the song being rendered as a duet with Sarah Brightman.
Time for another remake with EmBee lyrics.
@ Fred.
You are saying that the US is built on birthplace citizenship.
It’s quite possible that somewhere along the line that has been a big misunderstanding, a misinterpretation of the 14th Amendment.
You see, many people have said
“Intent has nothing to do with the law. The intent of the authors of the 14th Amendment of the US Constitution is irrelevant.”
And yet, when the deciding judge on the US Supreme Court ruled on the last Obamacare challenge he based his decision on the fact that the intent of the lawmakers was important.
So my point is, how can intent be relevant in keeping Obamacare the law of the land and not strike it down yet intent is not relevant when it comes to what the authors of the 14th Amendment of the US Constitution meant when they wrote that?
I’d like to at least know who these legal scholars are and what they are basing their advise to Trump on, and it could turn out that it’s also relevant for those who don’t want to be a part of the US and are seeking to leave as well for those who are fighting to get in.
OMG, EmBee, I think that’s one of your best ones yet! I’m honoured that I was able to provide at least a little bit of the inspiration for “Condor”. I could almost hear Anne Murray singing it as I played it while reading the lyrics. She strikes me as someone who’d approve if she was at least a little PO’d at the U.S.
“U.S. CBT is a feature of U.S. tax law where no U.S. citizen/Green Card holder or even a Snow bird who commits the error of staying in the U.S. too long are deemed to be U.S. persons and thus subject to U.S. tax and investment restrictions even if they are not resident in the U.S.”
Surely that proves why ET needs to be called ET rather than CBT. Extraterritorial Taxation includes Green Card holders and Snowbirds who commit the error of staying in the US too long. CBT does not include those two categories.
“The U.S. will not sign any tax treaty that does not include what is called the, Savings Clause.”
Yes, but we know a solution. Every country can apply the US “Last in Time” rule and pass a national law revoking the Savings Clause.
“Last of all I would like to say that I am curious as to how Mr. Berg has become the torch bearer for FATCA/CBT/IGA in Canada. Aren’t there any other opinions out there that the media can find?”
Good question. I can think of another Con artist who keeps Harping on things the same way.
“But Trump has also said that in addition to that, he also has experts who say that the 14th Amendment of the US Constitution DOES NOT AUTOMATICALLY CONFER CITIZENSHIP by virtue of ONLY birth on US soil. According to Trump, these legal experts he quotes are saying that the 14th Amendment does not need to be changed.”
That is true. One of the other conditions is being subject to US jurisdiction. Citizens of other countries who have diplomatic status in the US are not subject to US jurisdiction so they don’t obtain US citizenship at birth. NativeAmericans also used to have immunities to make them non-citizens, though I suppose those have been whittled down. Some of Trump’s colleagues have been trying for years to give the same kinds of immunities to babies born to illegal immigrants, so they won’t be citizens and they’ll be able to get away with murder though they’ll be deportable. Also, birth in the wrong parts of US soil also doesn’t automatically confer citizenship, because a racist Supreme Court trumps the constitution.
“So my point is, how can intent be relevant in keeping Obamacare the law of the land and not strike it down yet intent is not relevant when it comes to what the authors of the 14th Amendment of the US Constitution meant when they wrote that?”
Because judges have powers like that.
The only way to force a court to obey precedents, including its own precedents, would be for a higher court to order a lower court to obey, and the higher court would only do that if they find it convenient for some reason, not because of effects on piddly little citizens or piddlier littler non-citizens or duals. So even that hypothetical possibility isn’t possible here.
“And in light of the federal election, the decision may have electoral consequences.” -Sorry to be a debbie downer but sadly that is wishful thinking. At least I don’t know anyone in NZ other than expats or direct family of them who gives a toss about what may or may not happen to a foreign expat. Also, with most countries including NZ having a LOT of anti-USA sentiment you are doubly screwed. Also, when you become a 1st generation citizen of another country you are never truly considered “one of them”. You hold your new passport with pride, but believing you are truly one of them is somewhat in your own mind because they sure don’t see it that way. Their family have been here for generations, they were born and raised here.. ‘you think that little booklet makes you one of us?’ Therefore it’s easy enough for them to look the other way as we are thrown under the bus. We’re pretty much on our own and a small subset of the millions who are expats that actually care. Not David vs. Goliath but an army of Goliaths with unlimited resources vs. one David. Best course of action for now is likely to get your CLN and refuse to recognize the US has any further authority over you. Around 2035-2045 we’ll be moving to a world of mass abundance where money and wealth are no longer part of the human race. Then we will transition to becoming citizens of Earth and all this is moot (hopefully!).