Prologue – The Context of FATCA, FIFA and U.S. Extraterritorial Laws:
Absolutely fantastic comment- #FATCA cuts off "oxygen"/ USD 2 those who won't do US's bidding-Immoral in the extreme! http://t.co/IiNPNEp7GJ
— U.S. Expat Canada (@USExpatCanada) May 17, 2015
The above tweet links to the following comment at this blog:
“@R talbot
With respect to your comment here:
which I will reproduce.
This is clearly a Republican-rant organization and fully misrepresents the Dems Abroad which has been working on FATCA issue much longer than Repubs who only recently jumped on it for political purposes. DA favors country-of-residence-exemption because it is the approach that will get the the quickest real results . . . rather than the full-blown Constitutional attack which will take years, but get their right wingnut lawyer Bopp maximum press.
Further the Republicans dirty little secret is that the REAL tax avoiders putting funds overseas are Republicans residing in the US. Republican position appears to be that tax evasion is OK while Dems Abroad is working to get relief for regular overseas Americans (of both parties) who are not the purpose of FATCA in the first place.
And lastly, before castigating the Obama and Dems for this law for political purposes, last I saw McCain is a Republican.
Let’s consider the “same country exemption” for what it is rather than drifting down the non-productive road of partisan politics. In other words, what does it mean. Not, who is it from.
Starting from first principles.
The Democratic Party (I don’t know them and don’t care about the label) is clearly in support of FATCA. They have made this very clear. Democrats abroad has made it clear that they are in support of FATCA. (Furthermore, in its recent submission to the Senate Finance Committee Democrats Abroad did NOT advocate for the repeal of “citizenship taxation”.) That’s all fine, everybody is entitled to support what they want. That said, (and I recognize that this is my opinion) FATCA is one of the most egregious examples of extra-terriitorial overreach in the history of the world. It is also absolutely immoral for many reasons including the following:
The U.S. dollar as the primary reserve currency
At the end of the World War 2 – in Bretton Woods, NH, the U.S. was trusted to the extent that the U.S. dollar became the primary reserve currency of the world. In practical terms this meant that there would be a constant demand for U.S. dollars because it was the commonly accepted currency. In other words, the U.S. was trusted with the great responsibility of it’s currency becoming the currency that all countries, people and financial institutions would need. Along with this agreement and responsibility, comes the assumption/trust that the U.S. would continue to make the U.S. dollar available. Since Bretton Woods, the U.S. dollar has become the “oxygen of the world financial system”.
FATCA is a law that the U.S. is attempting to IMPOSE through threats of economic sanction on ALL countries of the world. Why all countries? Because, of the status of the U.S. dollar as the world reserve currency. All the world conducts business in U.S. dollars. (This is why the rest of the world will move quickly to create conditions where the U.S. dollar will NOT be the primary reserve currency.)
Through FATCA, the U.S. is saying:
1. If you don’t do what we want (hunt for those we define as U.S. persons)
2. When you access the world reserve currency USD
3. We will deduct 30% of what you are entitled.
In other words, the United States of America – is in effect cutting off the oxygen supply to the rest of the world. In my view, this is in complete violation of the spirit of the Bretton Woods agreement which allowed the U.S. dollar to become the primary world reserve currency. I also believe that is an outright violation of International law.
Furthermore, FATCA is the “enabler of place of birth taxation” which operates to impose U.S. taxation on the the residents and citizens of other countries and ultimately on the country itself.
Now, I have a simple question for you and all others (including I suppose the Democrats) who as a matter of principle support FATCA.
My question is this:
Do you think it is immoral to cut off the oxygen supply of the world financial system just because you think you can get away with it?
As President Clinton once implied:
“To do something because you can is the least morally defensible reason for doing it.”
FATCA is not only an egregious violation of the sovereignty of other nations, but the assumptions it is based on (cutting off the world oxygen supply) is immoral in the extreme. But, it gets worse. Because under the FATCA rules, the United States alone defines who is a “U.S. Person”, FATCA can (and will be used) to extend U.S. taxation to more and more people who are citizens and residents of other countries. The effect of U.S. taxation of citizens and residents of other countries is that the U.S. can use “citizenship taxation” to remove capital from other nations. (For example London Mayor Boris Johnson)
Now, let’s move on to the FATCA “same country exemption”.
To promote the “same country exemption” is:
1. To clearly accept the absolute immorality of FATCA and principle of imposing U.S. taxation on the citizens and residents of other nations; but also to
2. Beg the United States Government to tweak the law so that this unconscionable act of immorality does NOT apply to one specific group – that is a subset of U.S. citizens abroad. And for the record, that specific group is NOT Americans abroad as a group. Rather it is Americans Abroad who are U.S. tax compliant. (The latter condones the immorality of citizenship taxation and does NOTHING whatsoever to assist the millions of Americans abroad who never even knew about citizenship taxation.)
Therefore, those who support the “same country exemption” (whoever they may be) are actually:
1. Supporting immoral laws in general and FATCA in particular; and
2. Saying, well please exempt me from this immorality and we will “wink wink” and NOT call your attention to the fact that you are immoral in the extreme.
My conclusion:
Individuals and groups who support the “same country exemption” are actually enablers of immoral laws that are a breach of the spirit of the Bretton Woods agreement, are designed to impose taxes on the citizens and residents of other countries and extract capital from those countries.
Afterthought:
I have not even mentioned the absurd and unfair costs that FATCA compliance impose on non-U.S. banks and on the residents of other countries. As one of many examples see:
http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=102&title=bahamas-urged-to-lobby-over-fatca
Afterthought 2:
FATCA is one component of U.S. policies which Juan Zarate would call part of “Treasury’s War” (google the title) and Ian Bremmer (google) would call the “Weaponization of Finance”. It’s really the U.S. saying to the rest of the world:
It’s our world. Get used to it.
Afterthought 3:
A previous comment on these issues included:
http://isaacbrocksociety.ca/2014/01/17/us-citizenship-based-taxation-and-fatca-are-egregious-violations-of-the-master-nationality-rule/comment-page-1/#comment-995056
The time has come to send the U.S. home where they can worship their FBAR Museum, PFIC Memorial and House of FATCA.
“
What follows are three video/audios.
The first two videos demonstrate how the United States is using the U.S. dollar (as the primary reserve currency) to extend it’s jurisdiction into other countries. I suppose it’s “good sport”. This is an unbelievable abuse of the trust placed in the United States when the U.S. dollar became the primary reserve currency.
From #FATCA to #FIFA – Use of the $USD gives the US jurisdiction over you https://t.co/88T4bu26vK
— U.S. Citizen Abroad (@USCitizenAbroad) June 2, 2015
and here
Ron Paul – Liberty Report https://t.co/vNVJxVWwce – Q. Where does the US get jurisdiction over FIFA executives? A. They use US banks!
— U.S. Citizen Abroad (@USCitizenAbroad) May 30, 2015
The final video is a bit of history from NPR.org. Very interesting how the U.S. dollar became the primary world reserve currency. You can be absolutely certain that the United States would never be trusted again. This is he true Obama legacy.
Via @nprnews: Episode 553: The Dollar At The Center Of The World http://t.co/h6qzhpi2Hk – Listen to this discussion about the Bretton Woods
— U.S. Citizen Abroad (@USCitizenAbroad) June 2, 2015
The US Dept of Justice has been expanding its theories to base US jurisdiction in a variety of areas, including the Foreign Corrupt Practices Act, the laws relating to sanctions against Iran, and now FIFA based on RICO…based in part on the use of US Dollars and the ‘use’ of the US banking system (e.g. the use of US correspondent banks in USD wire transfers which are a necessity if a transfer is in USD). The DoJ has also based allegations of US jurisdiction based on the passing of foreign emails through servers in the US (e.g. an email to/from a foreign nation through a US server to base a case for sanctions under the Foreign Corrupt Practices Act). One of the key aspects of these cases is that they settle before trial – in other words – the defendants have not taken these cases to trial and attempted to challenge the asserted US jurisdiction.
In the case of the banks prosecuted (e.g. Credit Suisse) the banks paid the fines and did not go to trial because they did not want to risk losing and then losing its license in NY or the ability to use the US financial system. Think of the disaster if the bank could not transact in USD! However, the point is that these cases should really have gone to trial so that the asserted allegations of US jurisdiction could have been tested in court – instead by pleading guilty or entering into a deferred prosecution agreement the broad assertions of the DoJ that the court has jurisdiction were never challenged and the DoJ is just emboldened further.
This practice of the DoJ should be challenged but if it is not, it will just continue and get worse. Of course for the rest of the world, the message is don’t use US Dollars in transactions. But the US knows that the US financial system is the world’s financial system for the foreseeable future.
This is also how they nailed BNP Paribas to the wall.
BNP broke no laws in France (EU), but because the transactions were in USD$ they needed to be cleared through a US bank…
If BNP did the transactions in Euro or CHF they could have avoided the $9B fine!
“tt” on the Media & Blog thread found a good FIFA-FATCA youtube:
Protection money?
Always remember that taxation is stealing. IBS hammers on the USA taxing Canadians, but CRA has no right to tax Canadians. IRS has no right to steal my money. I live in New Hampshire, but I did not vote for candidates who support the income tax. I voted against them. Even if there was a valid excuse to take my money for the legitimate necessities such as defending against bad guys, the vast majority of the money goes to things that have nothing to do with securing my rights, and everything to do with buying votes.
@Steve:
When the Japanese bombed Pearl Harbor, the USA did not respond by swung the Japanese government under Japanese laws in a Japanese court. The Swiss should stop cooperating with such absurd prosecutions under USA laws. The boundaries of the United States are the boundaries of the United States.
The biggest question now is how quickly and quietly can the world abandon the US Dollar in a bid to escape America’s toxic hegemony over the world’s financial (and now legal) systems? Not nearly fast enough, I’d wager.
Even if the world economy somehow manages to survive the Made in America™ catastrophe now whispering outside our doors, it will nevertheless be utterly and irrevocably transformed, and the United States itself will ironically become its greatest casualty.
The name Bretton Woods will become synonymous with America’s loss of empire, and a stark reminder to future generations of the price to be paid for unrestrained hubris and greed. Through it all, FATCA will be rightly be seen as the bridge too far that America foolishly dared to cross. As for FIFA, it will be the moment when the entire world begins to wake-up. When anger at corrupt soccer officials gives way to revulsion and fear. As we begin to understand that something far more sinister has just taken place. That the US has indeed declared financial war upon the entire world, using the US Dollar and American banks as both pretext and weapons.
Excellent expose of why half-baked measures like “Same Country Exemption” cannot be supported. To do so would be like a surgeon operating on a cancer patient who removes a portion of the tumor and *decides* to leave the rest in place. CBT is financial cancer; it must be ripped out, fully, once and for all.
If BNP Paribas had not used dollars in its business with Iran, then it wouldn’t have had to pay such a draconic penalty to America. So one doesn’t have to be a genius to know that next time anybody does business with anybody America disapproves of, they will use Euros or Yen, Renminbi or Australian/Canadian dollars to do the job in stead of risking huge losses. And this will probably lead to more insights into how by-passing the dollar could work.
@Polly The new China created International Payments System coming on stream in the last quarter this year WILL be truly revolutionary. The US Dollar will be within sight of becoming nothing more than another Banana Republic based Printed scrip. This is very sad in my view but is the clear result of US Governmental arrogance and aggression with a weaponized financial system.
@nervousinvestor
It is very sad. But abusing the system is sad too.