There are a few people in Trinidad and Tobago (T&T) who believe that compliance with the U.S. FATCA law will harm the citizens of T&T.
— If you can spare a few minutes of your time to send an email — and feel that sovereign countries should not comply with the U.S. FATCA (extortion) law, because that law is harmful, then EMAIL YOUR THOUGHTS BY THIS FRIDAY to The Secretary, Joint Select Committee on Tax Information Exchange Agreements Bill, 2016, Office of the Parliament of Trinidad and Tobago at jscfatca@ttparliament.org
— See here and here for articles mentioned/authored by Jim Jatras on the attempt of this “tiny island nation” — that puts other countries to shame — to retain its sovereignty.
Consider the text of the T&T Constitution where you will find the statement: “1. (1) The Republic of Trinidad and Tobago shall be a sovereign democratic State.”
Go to the link found by Badger where you will find:
“The Joint Select Committee established for consideration of the Tax Information Exchange Agreements Bill, 2016 is calling for comments on the Bill.
The purpose of the Bill is to implement certain tax information exchange agreements entered into between Trinidad and Tobago and the United States of America.
The Committee is inviting members of the public to submit comments on the Bill, which includes proposed amendments and is available here. PDF Icon The report of the Joint Select Committee, which was laid in the House of Representatives on February 3, 2017 can be found here. PDF Icon
THE DEADLINE FOR SUBMISSIONS IS FRIDAY FEBRUARY 10, 2017.
Written submissions should be addressed to the Secretary to the Committee as stated below or can be forwarded via email to jscfatca@ttparliament.org.
The Secretary
Joint Select Committee on Tax Information Exchange Agreements Bill, 2016
Office of the Parliament of Trinidad and Tobago
Levels G-9, Tower D
International Waterfront Centre
1A Wrightson Road
Port-of-Spain”
— My own email suggested to the Committee that any FATCA Compliance bill likely violates the T&T Constitutional provisions on Sovereignty and Equality — and that T&T cannot knowingly pass legislation that violates its Constitution.
Do you think that it would be helpful if a (presently) sovereign nation refused to comply with a U.S. FATCA demand?
Four more days only to send those emails…
Just sent the mail. Every bit helps I think.
Thanks Stephen and Badger! I linked to this post, with deadline, in the Sidebar under “Take Action!” and on the Ongoing Projects page, also in Sidebar.
It appears that a living person will actually acknowledge receipt of your email sent to the T & T Committee:
“Received. Thank you. [XXXXXXXX] | Procedural Clerk | Financial Scrutiny Unit…”
There is never any guarantee of success, but if you really feel that FATCA is an abomination that should not be imposed on others, what excuse do you have in not taking a minute or two to send an email using either your real or anonymous name?
@Stephen, yes a Keiba Jacob, procedural clerk, acknowledged receipt
@All
I am glad to see that Isaac Brock Society has picked up on the brewing tempest in Trinidad and Tobago (TT). There are actually a number of significant items that have appeared with respect to TT, one of which may be relevant to the Canadian lawsuit (see below).
Also, note two further things:
1. Expect news of a major new DC initiative shortly.
2. Re comments on Brock re urging Justin Trudeau to renegotiate Canada’s IGA, Mrs. Kamla Persad-Bissessar, the Opposition Leader in TT, with FAR fewer resources at hand has take a much bolder step than is being requested of Trudeau. Specifics below (including link to her letter, here http://www.jimjatras.com/downloads/728364237648726384.pdf ).
Re TT and Canada, note this in commentary (full text below) by Dr. Hamid Ghany of University of the West Indies:
The Bill explicitly states at section 2 [ of the pending TT act to comply with the FATCA IGA] as follows :
“This Act is inconsistent with sections 4 and 5 of the Constitution” which confirms that it infringes fundamental human rights and freedoms. Two Sundays ago, I highlighted the fact that Trinidad and Tobago is the only country in the Commonwealth Caribbean that has adopted the model of the Canadian Bill of Rights 1960 for its human rights chapter in its constitution.
[Perhaps of interest to the litigation team in Canada?]
Link and full text of Dr. Ghany provided below.
A. Also, see below WSJ editorial “Taming IRS Imperialism”
B. Jatras The Hill “Tiny island nation standing up to ‘hare-brained’ tax haven law”
http://www.guardian.co.tt/columnist/2017-02-05/fatca-and-judiciary
FATCA AND THE JUDICIARY
BY
DR. HAMID GHANY
The explanatory notes accompanying the The Tax Information ExchangeAgreements Bill, 2016 read, in part, as follows :
“This Bill seeks to implement certain tax information exchangeagreements entered into between Trinidad and Tobago and otherStates. The Bill contains thirty sections and may affect the rightsof individuals to private life guaranteed by section 4 of theConstitution of the Republic of Trinidad and Tobago. As such the
Bill requires a three-fifths majority voting for passage inParliament in accordance with section 13 of the Constitution.”
The Bill explicitly states at section 2 as follows :
“This Act is inconsistent with sections 4 and 5 of the Constitution” which confirms that it infringes fundamental human rights and freedoms. Two Sundays ago, I highlighted the fact that Trinidad and Tobago is the only country in the Commonwealth Caribbean that has adopted the model of the Canadian Bill of Rights 1960 for its human rights chapter in its constitution.
This clearly sets us apart for the enactment of FATCA legislation to comply with United States law. It must be noted that FATCA is not a free-standing Act, but rather an insertion into the Hiring Incentives to Restore Employment Act (HIRE) (Public Law 111-147, March 18, 2010).
The overall effect of non-compliance by states around the world is that they may be subject to severe banking penalties. This has been cast in Trinidad and Tobago in many ways that range from the comments of the former US Ambassador to this country publicly talking about people having “cocoa in the sun” to “what is the opposition afraid of”.
The Office of the Prime Minister recently threatened the population with the possibility of economic inconvenience in their lives if Parliament does not comply with this US law. The OPM alert called for citizens to contact their MPs and tell them to support the legislation.
It is unfortunate that this twist has occurred because citizens are being asked to surrender their rights and their sovereignty because of the fear of the “Big Stick” of the United States. Using the United States as a convenience for carrying out a local political agenda is unfair.
The real issue that should be probed is that Trinidad and Tobago has no guarantee that it will still not be subject to the US “Big Stick” even if it passes this law. That is because of the complete provisions of section 13(1) of our constitution which say as follows :
“An Act to which this section applies may expressly declare that it shall have effect even though inconsistent with sections 4 and 5 and, if any such Act does so declare, it shall have effect accordingly unless the Act is shown not to be reasonably justifiable in a society that has a proper respect for the rights and freedoms of the individual.”
Section 13(2) makes provision for such a Bill to be passed by a three-fifths majority in both Houses of Parliament. The bottom line here is that even though the proposed legislation makes a public confession at the outset that it is knowingly infringing your human rights and that in doing so it requires a three-fifths majority, the reality is that the will of the parliamentarians can be overturned by a judge on the ground that such legislation is deemed to be “not reasonably justifiable in a society that has a proper respect for the rights and freedoms of the individual”.
What will happen to Trinidad and Tobago if its independent judiciary from the High Court to the Privy Council were to overturn the FATCA legislation that is currently before the Parliament ?
Are we going to bully our judiciary and tell them to just bypass the human rights implications in the same way as parliamentarians are being told to “just pass the dam bill” ? As I have said before, there is an amazing lack of critical thinking on the implications of FATCA for Trinidad and Tobago and the approach that is being adopted is that we have to live in fear of the American “Big Stick”. Why ?
While the political changes are taking place in Washington, D.C., Trinidad and Tobago does not have to go off to the races to complete this FATCA Bill because the directive of the Obama Treasury Department may not be the same directive to be applied by the Trump Treasury Department. We should demonstrate some political awareness before we surrender a part of our national sovereignty to the United States.
The nominee for the position of Secretary of the Treasury in the Trump Administration, Steve Mnuchin, has had his nomination advanced out of the Senate Finance Committee to the floor of the Senate for a vote very soon. The nominee for the position of Director of the Office of Management and Budget is following closely behind him. These two nominations are likely to be approved shortly by the Senate. Can we wait just a bit longer to know whether enforcement (as opposed to repeal) will or will not be on the cards for FATCA from the US end?
++++++++++++++++++++
Wall Street Journal, Sat Feb 4 (posted on Feb 3). “Taming IRS Imperialism”
Link to full text: https://www.wsj.com/articles/taming-irs-imperialism-1486166764
Partial text (due to copyright issues):
Taming IRS Imperialism
A foreign leader asks President Trump if he will keep a promise.
Feb. 3, 2017 7:06 p.m. ET
In the tiny Caribbean nation of Trinidad and Tobago, Kamla Persad-Bissessar, the leader of the opposition coalition in parliament, recently did something no other world leader has done: She read the U.S. Republican Party platform.
There she discovered that the GOP had called for repeal of the Foreign Account Tax Compliance Act, or Fatca, which is best understood as a license for IRS imperialism. The Treasury Department has used the law to demand that foreign countries change their own laws so their financial institutions report information on their American account holders. Upon discovering the Republican call for Fatca’s repeal, Mrs. Persad-Bissessar wrote Donald Trump in January asking if he will keep this promise.
[ . . . ]
Americans have an even bigger stake in the answer. In theory this 2010 law was designed to go after fat cats hiding their wealth offshore by adding a new reporting form for taxpayers with assets overseas. In reality, the law has become another example of gross federal overreach, adding another burden on Americans overseas who are already paying taxes where they live.
[ . . . ]
The roughly eight million Americans working overseas have been hit hardest by this bad law. Some foreign banks and financial institutions have responded simply by refusing to take American customers, on grounds that Fatca requirements are more trouble than the business is worth. For similar reasons others do not want Americans as business partners. Many others of modest means who owe no U.S. taxes can still find themselves hit by hefty fines and penalties because they have fallen afoul of the reporting requirements.
Meanwhile, back in Trinidad and Tobago, Mrs. Persad-Bissessar’s question to Mr. Trump has roiled the pro-Fatca establishment. The American ambassador (appointed by President Obama) has said Fatca is being held up by “some people with cocoa in the sun,” insinuating that only someone with something to hide could be opposed. The Fatca chief at Deloitte & Touche has been telling Trinidad and Tobago that Fatca is here to stay and Mr. Trump can’t do anything about it.
[ . . . ]
So two cheers for Mrs. Persad-Bissessar for asking her question. Let’s hope President Trump gives the answer that Americans deserve, by making clear he intends to deliver on the GOP pledge to dismantle a bad law that never should have been passed.
+++++++++++++++++++
Jatras, The Hill Feb 2 “Tiny island nation standing up to ‘hare-brained’ tax haven law”
Link to full text with important embedded links:
http://thehill.com/blogs/ballot-box/317422-tiny-island-nation-standing-up-to-worst-law-americans-have-never-heard-of
Partial text (due to copyright reasons):
Tiny island nation standing up to ‘hare-brained’ tax haven law
BY JAMES GEORGE JATRAS, OPINION CONTRIBUTOR – 02/01/17 08:00 PM EST
644
[ . . . ]
Kamla Persad-Bissessar, Trinidad and Tobago’s former prime minister and current leader of the parliamentary opposition, recently took an action that leaders of far more powerful countries feared to take.
Persad-Bissessar questioned the future of the so-called “Foreign Account Tax Compliance Act (FATCA),” an ill-conceived U.S. law few Americans have heard of.
[ . . . ]
Presented with the ultimatum of signing the faux treaties that compromise their sovereignty, gut their citizens’ privacy protections, and pass FATCA’s staggering compliance costs on to their consumers and taxpayers, countries have rushed to submit.
Even major financial powers like Britain, Canada, Switzerland, and Germany have bowed the knee, both signing the agreements and enacting domestic legislation to implement them.
But not tiny Trinidad and Tobago.
More precisely, the Trinbagonians signed like everyone else, but when it came time to pass domestic laws dictated by Obama’s Treasury Department, the opposition, led by Persad-Bissessar, hit the brakes.
She and her party successfully blocked efforts by the government of Prime Minister Keith Rowley to rubberstamp the legislation and, instead, forced it to a special committee where its impact on all Trinbagonians is now being assessed.
Further, Persad-Bissessar noticed something seemingly overlooked by every other government or opposition leader on the planet — the United States just had an election, and the 2016 Republican Platform calls for FATCA’s repeal.
With appropriate deference, Persad-Bissessar suggested to Prime Minister Rowley that he write then-President-elect Donald Trump and ask him what he intended to do about FATCA.
The government refused, with Finance Minister Colm Imbert scolding her that Trump “did not have time for this.”
So, on Jan. 13, a week before Trump’s inauguration, Persad-Bissessar decided to write to Trump on her own, noting both the GOP Platform language and Trump’s pledge to overturn instances of his predecessor’s executive overreach.
Writing in the Trinidad Guardian, Dr. Hamid Ghany of the University of the West Indies also noted that Persad-Bissessar’s letter to Trump is copied to incoming Treasury Secretary Steven Mnuchin, OMB Director-designate Rep. Mick Mulvaney, White House Chief of Staff Reince Priebus, Sen. Rand Paul (R-Ky.), and Rep. Mark Meadows (R-N.C.), as well as the respective ambassadors of both countries.
[ . . . ]
In response to Persad-Bissessar’s letter, Obama’s departing ambassador, John Estrada, has undiplomatically impugned her integrity, baselessly insinuating ulterior motives.
The Rowley government likewise has resorted to a sleazy scare campaign, warning of the economic ruin we Americans will inflict on Trinbagonians if they don’t submit and accept “some adjustments to local law” — code for surrendering national sovereignty and privacy rights.
The fact that none of this harm would ensue if FATCA is repealed went completely ignored.
Persad-Bissessar . . . has pitched a softball to Donald Trump, who can now hit it out of the park.
Their response to her should be that they will keep faith with the platform language and include repeal of “the worst law most Americans have never heard of” in the upcoming tax reform package. They can also expedite FATCA’s well-deserved demise by pulling the plug on the fauxtreaties.
James George Jatras is a former U.S. diplomat and foreign policy adviser to the Senate GOP leadership. He edits http://www.RepealFATCA.com and recently published a major study, “How American Media Serves as a Transmission Belt for Wars of Choice.”
Jim, thanks for the comments. I have referenced the articles you mentioned at the top of my post.
I didn’t receive any acknowledgement. Maybe they’re inundated.
Bubblebustin, I would really like to think that the T & T office is in fact inundated with Brocker suggestion emails. I received an acknowledgement of my email about an hour and a half after I sent it.
My letters have been acknowledged 🙂
Email written and sent.
ONLY THREE MORE DAYS TO SEND EMAILS OF SUPPORT TO T & T.
IT WILL ONLY TAKE A FEW MINUTES OF YOUR TIME.
Eric, Bubblebustin, and Mr A — THANKS!
There has been no acknowledgement of the message I sent 26 hours ago.
To the Joint Select Committee on Tax Information Exchange Agreements Bill, 2016
My name is Norman Diamond, Canadian citizen living in Japan, formerly Canadian and US citizen living in Japan. When I was a US citizen, I did my best to comply with US extraterritorial taxation, and never had any thought of not complying. I was a fool, but no longer.
On the matter of extraterritorial taxation of individuals due to birthplace or parentage, the US has just one friend in the entire world, Eritrea. The US sponsored a UN resolution condemning practice of the US’s sole friend, Eritrea, as a human rights violation. I agree with that evaluation. The practice of the US and Eritrea is a human rights violation.
No sovereign democratic country would agree to allow human rights violations within its territory when requested to do so by a foreign country that violates human rights.
People of civilized parts of the world respect your country’s stand.
Yours sincerely,
Norman Diamond
This sent 48h ago, no aknowledgment received.
Dear Sir or Madam,
Regarding your potential InterGovernmental Agreement (IGA) with the USA for application of FATCA I would very humbly like to draw your attention to the following:
The USA, like many countries, wants to know about “foreign bank accounts” to prevent tax evasion. This is reasonable and achieved in the EU through Common Reporting Standards. Banks take note of foreign addresses and notify countries of residence of the existence of accounts. For instance if Mr Dupont has a French bank account and lives in Belgium, the French bank will notify Belgium.
The USA does this through FATCA, which has incredibly burdensome and punitive mechanisms to force all banks in the world to find “US Persons”.
To make FATCA less burdensome, the USA has come up with IGAs, where banks report to the local government, which transmits data to the USA.
In considering your IGA with the USA I urge you to take note that the USA considers all of its citizens, and some non-citizens, to be taxable by the US even when they live abroad. This is “citizenship-based taxation”, unique to the US.
The consequence of this: if you have a citizen of Trinidad and Tobago who is living lawfully and paying taxes in T&T, he may nonetheless be determined by the USA to be a US Person, liable for US taxation, or at least filing of tax information yearly. For instance a USA Green Card holder, or a dual citizen, or someone born in the USA, or someone with a US parent. All of these people will be determined to be at risk by their banks, and will be either excluded by banks, or reported to the USA. They will have to file yearly submissions on all their bank accounts to the USA. They will have to start filing US income taxes, and perhaps pay US income taxes. The only way out for a dual citizen is to renounce US citizenship, which costs 5 years of tax compliance and $2350 (USD), and is thus out of reach of many people (this sum is officially considered exorbitant by the government of Germany).
When negotiating the IGA with the USA, it would be useful for T&T to obtain the following safeguards:
A T&T citizen (or permanent resident) lawfully residing in T&T and taxed in T&T should be exempt from declaring his T&T accounts to the USA. In this manner the USA would respect T&T jurisdiction over its own citizens/residents.
Only accounts with a US address would need to be singled out by banks and reported to the Government of T&T to be forwarded to the US. Do not burden the banks with a search for “US Personhood”, i.e. US birthplace, etc. Do not accept threats of huge punitive withholding.
Full real reciprocity: whatever the US gets in information from T&T, make sure T&T, if it should so wish, will get the same from the US. Make sure this reciprocity is not an empty promise, and all US banks, just like all T&T banks, are obligated to search for T&T addresses. Make the sending of information to the US conditional on the receiving of identical information from the US. Make sure the USA makes this law, and make the passage of that law conditional to the validity of the agreement.
If T&T are able to negotiate this, the world will take note, and other countries will follow your lead. Until now, unfortunately, other countries have bowed to US demands, at the expense of their citizens, most notably because they did not understand the concept of “citizenship-based taxation” which the US uses to reach into the lives of people everywhere.
I remain very humbly yours,
XXXX
US and French Citizen, living in Belgium
Obligated by FATCA and Belgian-USA IGA to submit my ordinary Belgian bank accounts yearly to the USA “Financial Crimes Enforcement Network”, even if they contain zero.
xxxxgmail.com
@Fred, as always my friend…..Superb!!
Yep i they did an IGA with the safeguards it would ripple through the world.
Cheers.
@All
WSJ editorial on this topic now has full text readable without subscription, LOTS of comments, almost all good.
https://www.wsj.com/articles/taming-irs-imperialism-1486166764?mod=rss_opinion_main
@All
Please note that Senator Paul, who was CC’d on Mrs. Persad-Bissessar’s letter to President Trump, has signaled his support on social media:
https://twitter.com/RandPaul/status/830121800352800769
https://www.facebook.com/SenatorRandPaul/posts/1420107081375424
@All
For those interested, today was the last day to submit comments. Here’s what I sent:
jscfatca@ttparliament.org.
The Secretary
Joint Select Committee on Tax Information Exchange Agreements Bill, 2016
Office of the Parliament of Trinidad and Tobago
Levels G-9, Tower D
International Waterfront Centre
1A Wrightson Road
Port-of-Spain, Trinidad and Tobago, WI
To: The Secretary, Joint Select Committee on Tax Information Exchange Agreements Bill, 2016
From: James George Jatras, Esq.
My name is James George Jatras. I am a former US diplomat and former foreign policy adviser to the US Senate Republican leadership. Among other private sector activities as an attorney and a government and media relations professional, I edit http://www.RepealFATCA.com, now the website of the newly launched Campaign to Repeal FATCA, of which I am co-leader with Nigel Green, founder and CEO of the deVere Group.
In recent days as the JSC has been doing its work I have been in touch with Congressional offices and the White House. I am reliably informed that Senator Rand Paul and Congressman Mark Meadows will soon re-introduce in the new Congress their bills to repeal FATCA. Unlike in past years, there is now strong reason to believe FATCA repeal – which is called for in the 2016 Republican Platform – will be put into a tax reform bill that Congress will send to the desk of President Donald Trump later this year. The Campaign to Repeal FATCA is hard at work to achieve that end.
I also have been in touch with multiple points of contact with President Trump’s White House team. They are in receipt of the January 13th letter from the distinguished Opposition Leader, Mrs. Kamla Persad-Bissessar regarding Mr. Trump’s intentions on FATCA. I expect a positive response in due course. Keep in mind that the Trump team is just getting its feet on the ground, with not even his full Cabinet yet in place, much less other appointees who will be in a position to reevaluate the policies of the Obama administration, including the statutorily unauthorized FATCA “intergovernmental agreements” (IGAs) like the one Trinidad and Tobago (T&T) is being coerced to sign under threat of sanctions.
Please also note that Senator Paul, who was CC’d on Mrs. Persad-Bissessar’s letter to President Trump, has signaled his support on social media:
https://twitter.com/RandPaul/status/830121800352800769
https://www.facebook.com/SenatorRandPaul/posts/1420107081375424
Meanwhile, it is clear that efforts are being made by the Rowley government, the BATT, and others to stampede through the parliament legislation implementing the IGA without adequate information about other options. Hence the Opposition’s laudable and successful demand for the JSC. Still, the effort to expedite this process before a clear signal can be given by the Trump Administration continues.
Much of the supposed urgency is driven by the FATCA compliance industry, which in T&T and worldwide has a virtual monopoly on “advice” to financial institutions and governments. Much such advice comes from persons who have little or no experience with the US legislative process, yet feel qualified to opine concerning what is or is not legislatively possible in the United States. For example, recently a representative of one US-based firm was widely quoted in media in T&T and throughout the Caribbean that Donald Trump cannot repeal FATCA, that Congress needs to
do that – with the clear intent of giving the impression (stated as such in headlines) that FATCA will not be repealed. But this year, with united Republican control of the US government, there will be a major tax reform package approved by Congress, and Trump will sign it into law. Also, while Trump cannot repeal FATCA by himself, he can revoke the IGAs, without which FATCA is a dead letter. Remember, T&T is being forced to implement the IGA, not FATCA per se.
In addition, an unseemly scare campaign – abetted by a compliant media – has been mounted by the Rowley government, outgoing US ambassador John Estrada, the BATT, and other voices threatening that the US will lay waste to T&T’s economy if you don’t comply with an edict you are neither legally nor morally obliged to obey. Since when is a sovereign country ruled by the laws enacted by a foreign government under a doctrine of “might makes right”? Granted, that is what FATCA does, but that’s also why Mrs. Persad-Bissessar is right to question it. Such threats are an argument for repeal, not submission.
Ambassador Estrada’s comments – which amount to threats – are particularly out of place. He has been quoted in the media saying that that FATCA “targets US citizens, folks who are involved in tax evasion, money laundering, terrorism financing, illegal accumulation of wealth.” That is simply not the case. Not one of those categories is mentioned in FATCA or the IGA, nor is any evidence of tax liability to the US specified. There is no legal standard of probable cause or even reasonable suspicion. Anyone who is a “US Person” must have his or her account information turned over, period. The definition of US Person is broad enough to include not only expat Americans living in T&T, but Trinbagonians who may for whatever reason may have US “indicia”: dual citizenship, those called “accidental Americans” because of their birth or a parent’s birth in the United States, anyone who at some point may been a resident of the US, or who have lived, worked, or gone to school in the US or ever acquired a US Social Security Number. Moreover, any citizen of T&T who holds a joint asset with any of the above, perhaps a spouse, parent, or child, will have his or her information turned over to the IRS too. This means in effect that your government is agreeing to abridge the personal privacy rights and protections of its own citizens to appease a foreign government. It would behoove the JSC at least to ascertain the number and descriptions of T&T citizens in these various categories before abridging their rights and protections under your Constitutions.
Finally, there two essential questions that, I suggest, the Rowley government, the financial institutions, and their self-interested compliance advisers must answer before any final determination is made regarding the relevant legislation:
1. How much would FATCA compliance cost T&T taxpayers?
2. How much would FATCA compliance cost T&T consumers?
These questions should be answered with hard numbers and an explanation of the costs and benefits (if any) to T&T.
Regarding the first question “How much would FATCA compliance cost T&T taxpayers?” please note:
One of the “benefits” of the IGAs is that they allow the US Treasury Department to stick the unwilling partner governments with the bill for enforcing FATCA on their own institutions and citizens. Under the IGA, the T&T government will foot the bill for collecting the information demanded under FATCA and turning it over the IRS. T&T’s Inland Revenue Division and perhaps other agencies will not be reimbursed by the US for these costs. T&T is not only being required to compromise its national sovereignty and citizens’ privacy but to pay for the insult on top of it. Before any final determination by the JSC, the Rowley government must provide in detailed, specific figures how much T&T taxpayers would be forced to pay (a) in initial outlays and (b) ongoing expenses. For comparison, please note that in the United Kingdom (unsurprisingly, the first country to bow the knee) costs to Her Majesty’s Revenue and Customs are reckoned in the hundreds of millions of British taxpayers’ pounds to implement FATCA:
https://www.gov.uk/government/publications/uk-us-automatic-exchange-of-information-agreement/uk-us-automatic-exchange-of-information-agreement
Regarding the second question “How much would FATCA compliance cost T&T consumers?” please note:
There is only one set of beneficiaries who are making fantastic profits from FATCA: accounting, consulting, law, and software firms selling compliance services – most of them US-based. FATCA is the best thing that ever happened to them, so of course they will say “pay no attention to that man behind the curtain” when the topic of repeal is raised. For the sake of charity, let’s suppose all such expert advice is given in good faith and not to preserve an obscene gravy train amounting to billions of dollars worldwide. Even small or medium firms will spend into the millions of dollars each to comply with FATCA. Individual big firms, like Scotia Bank in Canada, already had spent $100 million:
http://business.financialpost.com/news/fp-street/electronic-spying-a-big-issue-for-banks-scotia-ceo-waugh-says
Does this money go to the US Treasury, supposedly the purpose of FATCA? No, it pours into the coffers of the compliance firms. Where does the money come from? Out of the pockets of customers, clients, and depositors in the form of service fee overhead and reduced interest payments from the institutions that rely on the compliance vendors’ advice. That also explains the “Stockholm Syndrome” advice of BATT and its members, not to mention of most foreign governments, that are following advice more of benefit to the advisors than to those being advised or their constituents. This smacks of violation of fiduciary duty. Talk about “cocoa in the sun”! Before any final determination by the JSC, the financial institutions and their compliance advisers should be required to report in detail how much they will derive from T&T institutions – and thence, from their consumers – for FATCA compliance, both initial costs and an ongoing yearly basis. The government and financial institutions, as well as associations like BATT, should also be required to state which firms are advising them. I suspect the answers will be quite redundant.
Finally, with respect to costs, it is not enough to answer “less than what the 30% FATCA withholding penalty would cost T&T.” Whether or not that is true – and there’s no way to know without answering the two questions above – it’s a moot point if in fact FATCA may be repealed. In that case the penalty for noncompliance and compliance costs both would amount to exactly zero.
I hope the foregoing is of value to the JSC. I am more than happy to provide any further information that may be of assistance.
James Jatras: Amazing work. I can’t thank you enough. Perhaps we could add something (OK, it’s too late now) addressing crap such as below (I cut and pasted this from a prospectus of some shares I’d like to purchase right now in Canada) that affects the investment possibilities of my family, and henceforth our future wealth, thanks to the (politely) fact of there being a “US person” being in my family.
The shares to be issued hereunder have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered, sold or delivered, directly or indirectly, in the United States of America, its territories, its possessions and other areas subject to its jurisdiction or to, or for the account or benefit of a U.S. person (as defined in Regulation S under the U.S. Securities Act).
Yes, this is boilerplate verbage that I read everywhere, but it’s damned irritating.
How much will this affect the treasuries of the host nations?
I’d rather be free.
@PierreD
A bit too technical for me (I’m not a finance wizard, just a simple country lobbyist) but it sounds like it could have a negative impact on normal investment. I’ll pass it on to someone who will understand the implications better than I do. Thanks!
@PierreD – it is important to note that a US Person under the Securities Act is NOT defined the same way as a US Person under FATCA. My understanding is that the SEC is only worried about foreign firms selling securities to US residents. Of course, this is confusing, and the compliance department of your typical financial institution is just going to assume the broadest definition of US person and deny accounts to anyone with any US taint.
@Jim Jatras, PierreD, and anyone else who’s interested, here’s the 50,000 foot summary:
1. The Regulation S definition of “U.S. person” is different from 26 USC 7701(a)(30); it does not include U.S. citizens abroad. In fact it doesn’t mention citizenship at all and refers solely to residency.
2. Unfortunately there’s a grand total of about four securities lawyers on the planet who understand the difference
3. Hence a bunch of “Foreign Financial Institutions” who were already running scared from FATCA started believing the myth that they had to either register with the SEC or close the brokerage accounts of all the US-indicia people they’d dug up
Or to put it more pithily: just another case of private sector over-enforcement due to extremist misinterpretations of too many $*!)($! laws and regulations
Ah, I see Karen beat me to it. Thanks!
Might as well link the actual Regulation S definition while we’re all here discussing this: 17 CFR 230.902(k)
https://www.law.cornell.edu/cfr/text/17/230.902#k
As far as I recall that definition is not fixed in the Securities Act of 1933 itself. Theoretically I guess there’s a remote possibility of US persons abroad being dragged into that definition by executive fiat, though I don’t know if that would stand up to challenge; see e.g.
https://www.law.cornell.edu/uscode/text/15/77e#d
Oh yeah, just to make things really confusing, there’s parts of the Securities Exchange Act of 1934 which do define “United States person” to include U.S. nationals regardless of residence (even the poor American Samoans who didn’t get a vote on it)
https://www.law.cornell.edu/uscode/text/15/78dd–2#f
Sorry to post 3 times in a row
Norman, Fred, and Jim, Thanks for sending an email to T & T!