Some of you know that the Israeli Supreme Court recently issued a temporary injunction preventing implementation of the U.S. FATCA law in Israel. See for example Forbes article.
On September 12, 2016 the Israeli Supreme Court, however, quashed the injunction.
Marc Zell, a counsel to the two petitioners (Republicans Overseas and Rina Schreiber) confirmed to me today (September 14) that they have no intention of giving up the FATCA litigation fight in Israel — which will continue. He also reminded me that the lawsuit is in fact still pending as the Israeli Supreme Court has not issued an opinion.
Two surprising statements made by the Justices deserve mention:
1) “Privacy in modern life is very limited,” said Justice Menahem Mazuz, one of three judges who ruled on the matter. “This is nothing new, the only change is that the regulations have now been codified into law.” [“The court ruled that the Israeli law, passed as part of an arrangement with the United States Treasury Department, did not violate Israel’s Basic Laws of Human Dignity and Liberty.”]
[Compare the above statement on privacy with a similar argument made by U.S. Treasury Department et al. against the plaintiffs of the U.S. FATCA lawsuit: “…there is no legitimate expectation of privacy concerning information kept in bank records, and the Sixth Circuit has repeatedly reaffirmed as much…”]
2) Justice Hanan Meltzer in part justified the law by noting its acceptance by the United States, saying this created a presumption of constitutionality.
“As long as the US law is in force, there is a presumption of constitutionality in regards to its purposes.” Above from: http://www.israelnationalnews.com/News/News.aspx/217717
Found article in Hebrew (can be google-translated) on the FATCA injunction in Israel. See post.
My fingers are crossed that the court won’t lose heart.
Cheeky, by the nation the USA supports & (seems to respect) more than others.
https://translate.google.com/translate?sl=iw&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.themarker.com%2Flaw%2F1.3055283&edit-text=
google translation (not working well)
“Supreme Court Justice Hanan Meltzer decided yesterday to ban the meantime, the country will begin operating a mechanism designed to convey to the US authorities information on the accounts of American citizens with financial institutions in Israel.
The mechanism was developed through the summer Knesset adopted legislation in order to implement the FATCA agreement, signed by Israel and the United States, the exchange of information between the tax authorities of countries – in accordance with the requirement enacted in the US in recent years. The date set for the implementation of the agreement, Israel is September 30, but the administrative decision states that are already open information exchange systems, to be able to maintain the commitment to transfer information at the time.
However, yesterday decided to ban the opening Meltzer computer systems to transfer information to be held in an expanded discussion of the three-judge High Court petition, attacking the legality of the law. The discussion to take place no later than 15 September.
FATCA agreement regulates the transfer of Israeli financial institutions and information to the tax authorities in the US, through the Israeli Tax Authority. The agreement provides that the information provided will include information on financial accounts of more than 50 thousand dollars held in Israel by US citizens or green card holders by.
According to the petitioners – Association of Republicans Abroad in Israel and Rinat Schreiber, a civilian resident of Israel has US citizenship, which holds the account in Bank Hapoalim – it contradict the Basic Law on Human Dignity and Liberty. This is because it violates the right to privacy, right to property and the right to equality, and no proper purpose of this law. the petitioners, who are represented by attorneys Mark shade and Noam Schreiber, the best of our knowledge there are similar proceedings in the United States and Canada.
Hanan Meltzer
Justice Hanan Meltzer
The argument is that the law is sweeping and automatically operated without judgment, no attempt was made to minimize the damage, and there are no mechanisms for securing information transmitted. For example, it was argued that due to the fact that the institution of financial Israel can in some cases also classify accounts with less than 50 thousand dollars as reported – institutions are taking advantage of it, and forcing customers to sign a FATCA, even though they are exempt from reporting.
The State contends that the breach of the agreement may be severe and immediate consequences for the financial system. “Financial institutions may be defined as not in compliance with FATCA, which could immediately throw their ability to work with financial institutions in the US and worldwide, the threat of hold activities are defined as institutions that do not comply with FATCA.”
The FATCA provisions were enacted in Congress in 2010, in order to prevent tax evasion of US citizens with accounts outside of the US financial and step up enforcement and compliance of tax laws in the United States. As part of the regulations, financial institutions, like banks, which operate outside the United States are required to report to the US authorities on the accounts of American customers, and to impose sanctions on clients who cooperate with the financial institution.
Accordance with the regulations, the Israeli financial institutions to transfer the information required of them no later than 20 September, as part of the information has been passed to the tax authority.
After the amendment takes effect in early August, banks were required to inform relevant customers whose accounts have been classified as an account required to be reported, and they have the 30-day response. Therefore, set a waiter, even if early August sent messages to anyone whose account was classified as required reporting date for filing objections will be after September 1, so in any case have to give some time for discussion and decision on objections.”
Leave it to them Jews to lead the way. To quote God, A “Light Unto the Nations”
There is an English article in Haaretz (no translation necessary), which is for subscribers only. But if you go to Google News (news.google.com) and put the following in the search bar, you will get a link that opens the full article for you:
Court Bars Preparations to Share Tax Data With U.S.
Better yet, Karen has made a PDF of the article for anyone to read:
Hooray! I relinquished my citizenship 3 years, effective 10 years ago. My reasons for relinquishing were about my world view than anything related to taxes. However it’s nice that I don’t need to spend hundreds of dollars more to just to certify that I don’t owe the US any taxes. In Israel I’ve heard very, very little about any resistance to FATCA or the very many ways that the US rules over Israel as if it were a possession of the US. It seems that the prevailing Israeli mindset is that the US is somehow our protector (disproven on many occasions) and that Israel must kowtow to any American request.
There is huge ignorance in the banking system here about FATCA and what constitutes a US person. I had to take my battle to the Bank of Israel (the central bank) to get my bank to stop threatening to close my account if I did not file a W9 with them. Even then two years later I got another request from them and had to remind them of the last round with the Bank of Israel.
Many people are prevented from being involved in ownership or leadership of the many high tech companies here in Israel due to their US taint. The US is a prime example of a collapsing empire attempting to collect taxes worldwide as Rome did. As in the case of Rome, the barbarians are at America’s gates while the political and business elite party and orgy all night.
@Yitzi: I infer from your comment that you relinquished by having Israeli citizenship? If so, how were you able to backdate to 10 years ago, if you only relinquished 3 years ago. I had heard that State Dept considers Israeli citizenship as being conferred upon birth regardless of when you actually immigrate to Israel. Is that correct?
@howie That is correct, backdated to the day of my Aliyah. It was a special case, our status was not automatic under the law of return. We had to apply to the consulate for approval and then to be issued Aliyah visas.
In Israel, After much research on this website, and reading all the online State department instructions for it’s officers on the subject of relinquishment, I built a case for myself and family members and wrote additional letters as requested to support the request. Because of this special situation, our paperwork was sent to the State Department in the US for pre-approval which was granted. Only then we were permitted to come to the Embassy to relinquish, we got our approved CLNs two weeks later (an astonishing time frame) due to having been pre-approved prior to taking the oath.
I might add, I literally had to act as my own advocate and even guide the staff in the embassy as needed on how to proceed. The many hours of research on State Department procedures I had invested were well rewarded. It was a nice bonus that other than my time, postage for the documents, and one trip to the Embassy in Tel Aviv it did not cost me a Shekel.
@Yitzi: thanks for explaining. Your case is indeed unique in 2 ways. First, as you say, you made Aliyah but somehow were not considered one of the chosen people at birth. At first glance, that may imply a conversion although I’m sure there could be other explanations.
Second, you got pre-approval. As someone who has loitered around this forum for a while, that is the first such “pre-approval” case I’ve ever heard of, and I never saw that in the State Dept manual (although that doesn’t mean it it’s not possible).
@Howie It seems that due to the unique nature the pre-approval was something decided on the fly rather than being some established process. Our case is the only one I’m aware of where a pre-approval was done.
The thin edge of the wedge? We can only hope.
@Howie,
Re:
I think Dept of State began recognising aliyah as naturalisation, in accordance with INA, s. 349(a)(1), in 2012 as a result of the Federal Court of Appeals decision in Fox v. Clinton. About a year later, I heard, through a third party, that Dr. Fox had received his relinquishment-based CLN (not sure when exactly he did, though).
In the case of a Brocker, Ben Ploni in 2013, DoS apparently was recognising his aliyah as a relinquishing act, but he had a problem because of using his US passport after his relinquishing act, so he ended up renouncing. You can read his story (and Yitzi’s) in the Consulate Report Directory.
Fox v. Clinton, US Court of Appeals, District of Columbia, 12 June 2012
Yes I build my case with them using exactly the same arguments as noted in the case you cited. In addition as I mentioned, ours was not a clear case of law of return without first providing additional documentation, then asking to have it approved only after that was accepted a visa for the purpose of obtaining citizenship was then issued.
thanks to @yitzi and @pacifica.
This is yet another reason to visit this site regularly, my knowledge is indeed rusty.
so i gather that post-2012 (fox v clinton) that aliyah can be considered relinquishment. interesting and thanks to you both
@All
This is very encouraging news. I will be following.
@yitzi
A most unique approach and report. Good for you.
@pacifica
Thank you for the information and for adding to our knowledge base. I agree with Howie that there is so much to be learned and Brock is the place.
Does anyone know what is going on in France? Do we have any report from their front on their recent efforts?
“Israeli Supreme Court today issued a temporary injunction against enforcement of the FATCA data transfer provisions in the newly enacted FATCA implementation law and regulations in a suit brought by Republicans Overseas Israel.”
I’m very glad to hear this. We’ll see what happens from here. At least someone has said no to FATCA and this is a beginning.
Surprise…for a country that one usually supposes is in bed with the United States of America…that’s certainly a display of intestinal fortitude. I congratulate them on it.
Too bad, that it won’t bode well for those wanting US military aid in the form of equipment. Guess what, looks like the Israelis are going to be buying French again in the near future. ~sarcasm~
“Cheeky, by the nation the USA supports & (seems to respect) more than others.”
Why not? Shows a lot more balls than any of the foreign governments that have signed IGAs in the rest of the world.
I fear the wailing and gnashing of teeth by the Israeli bankers over the threat of sanctions by the US (however illegal they may be under US law) will be enough to snuff out the rebellion and the Israeli courts will knuckle under throwing it’s citizens under the bus.
Notice the capitalist response from the ruling elite: If we [Israelii banks] don’t come into compliance, then there will be hell to pay. This is the nature of the world we live in. Neoliberal capitalists have no problem tossing the vulnerable under the bus as long as their financial gains are realized. People are disposable for these folks.
Fabulous news! Our first win in court! Leave it to an Israeli judge to have the guts to tell it like it is and do what’s right. May this be the beginning of a vast sea change in our fortunes!
I see my “avatar” has changed. I assure the administrators that I am the same MuzzledNoMore as before. I have a new computer and had some issues with it. I think some of the resettings of various things that I don’t understand has caused an alteration in my online identity. I’m still me!
@ MuzzledNoMore
Changes all round I think (except for personalized gravatars). Must be a glitch in WordPress … or maybe new management decided to redecorate with new colours. Despite going from yellow to aqua, I’m still me too!