Here is the Memorandum of Argument of our Plaintiffs (Gwen and Kazia) for our FATCA IGA legislation lawsuit that was submitted on October 3, 2018 to Canada’s Federal Court. [Note that text is limited to 30 pages.]
The Memorandum can be found HERE.
The gist of our argument (page 12) is that the FATCA IGA legislation is inapplicable to Provincially regulated institutions and violates Sections 7, 8, and 15 of Canada’s Charter of Rights.
Some Excerpts:
— “The Impugned Provisions trench upon the core of the provincial power over property and civil rights because they constitute the regulation of a particular industry – the financial industry – and the regulation of this particular industry is an exercise of the provinces’ core powers over property and civil rights.40″
—“…although some US Persons in Canada have obligations under US law to report their Accountholder Information to the IRS, they generally do not have an obligation to report this information to Canada.”
…“Canada admits that it does not know how many account records have been shared with the IRS which are associated with individuals who are not US Persons.49…”
—“That the Impugned Provisions authorize warrantless searches without any notice or means of judicial review of any kind is undisputed and fatal to their reasonableness.”
—“But Canada has admitted that it does not oversee – meaningfully or at all – the conduct of Canadian FIs in determining whose Accountholder Information will be reported to both Canada and the United States.”
—“…it is impossible for Canada to establish that its own use for domestic tax compliance purposes of Accountholder Information obtained pursuant to the Impugned Provisions (to which it admits63) is reasonable because Canada’s use of that information is unrelated to the objective underlying the Impugned Provisions.”
— “The plaintiffs and other reasonable hypothetical individuals have a reasonable expectation of privacy in their Accountholder Information. Canadian courts have observed that personal financial information prima facie attracts a reasonable expectation of privacy, and that individuals can reasonably expect their financial institutions to keep their information confidential.
—“Canada cannot justify the s. 8 infringement under s. 1 of the Charter because it cannot demonstrate that the Impugned Provisions minimally impair s. 8.”
—“Most importantly, the Impugned Provisions undermine the Group’s access to a basic aspect of full membership in Canadian society by denying them the protection of Canadian sovereignty by exposing them to the extraterritorial enforcement of another state’s taxation and tax compliance regime.”
NEXT STEPS:
— Canada responds to our Memorandum of Argument by November 21, 2018.
— We reply to Canada by December 7, 2018.
— Trial is held in Vancouver beginning January 28, 2019
Canadian FATCA IGA lawsuit update
Thank you for the update, and thank you to the brave plaintiffs, the ADCS board and those continuing to maintain the IBS through thick and thin, for lo these now many years.
It has been many years indeed but I’m still very proud of this Canadian initiative and will always appreciate everyone who is involved in taking our complaint to court. There’s now only a few months left to see if the Canadian judicial system respects the Charter or not.
“Canada pleads that because the plaintiffs and other US Persons have pre-existing obligations to report certain information to the IRS under US law, their privacy interest in that information is minimal…”
What an extraordinary argument for a supposedly independent state to put forward.
Oh my goodness.I had completely forgotten about this. Its ABOUT TIME. Appalling how long something like this takes- people could be ruined and bankrupt in the meantime. I am so longing for long overdue justice.
Thank you to our plaintiffs, their legal team and ADCS.
Particularly irksome to me is how the CRA will use the information for its own purposes – without probable cause (unless being American is a crime in Canada).
“There’s now only a few months left to see if the Canadian judicial system respects the Charter or not.”
Are appeals really so quick?
BB, Re your point “Particularly irksome to me is how the CRA will use the information for its own purposes”
We say:
Excellent, SK. Thank you.
THANK YOU.
Looking good. Fingers crossed.
Good news.
Glad to here from you Stephen after many years.
Wow! This is SO good to see, particularly right now when the US government is doing nothing but kicking us down the road yet again. I loved the whole thing, especially clauses 80 through 90. It really stirs the blood. I can’t wait for January!
Good luck you Canadians!
Stephen, you write:
“Canada violated numerous rights found in the Canadian Charter of Rights and Freedoms. These are Charter rights guaranteed to all Canadians, regardless of where they happened to have been born”
Actually many American-Canadians were born in Canada to a Canadian and an American parent as I was. That is what makes this whole situation even more upsetting for people like me. I need to consider foreign laws when going about my daily life in the country of my birth and half my ancestry!
@Sam
With a Canadian birthplace there is no way you can be identified as a US person, in Canada or anywhere else. You would only encounter difficulties if you voluntarily confessed to having US citizenship due to parentage. Which, obviously, is a dumb thing to do.
On 2 October 2018 I was withdrawing money from a savings and loan in the Dominican Republic. Since I was presenting a passport with a different number from the one with which I opened an account, they took an hour to do all the paperwork including a W-9. I asked the questions to get the lady to confirm that, yes, the Dominican Republic is taking orders from Washington, then I quipped, “Ningún pueblo ser libre merece, si es esclavo indolente y servíl.” (No people deserves to be free if it is an indolent and servile slave.)
Of course, she immediately recognised my comment, as it is a line from the country’s national anthem.
@Sam
You write:
People born outside the USA are not afflicted with a permanent birth mark that identifies them as “US Persons”. For them, acknowledging U.S. citizenship, participation in CBT and identifying themselves as “US Persons” under FATCA is entirely optional.
The Canada Revenue Agency has even said that Green Card holders in Canada don’t have to participate in FATCA.
The people forced to participate in this insanity are those and only those with a U.S. place of birth. For anybody else, participation is purely voluntary.
“The people forced to participate in this insanity are those and only those with a U.S. place of birth. ”
And no CLN, wanting a CLN, and can’t get a CLN.
Residence countries could solve the problem in a New York minute, while preventing cross-border tax evasion/money-laundering, by flagging the tax records and passports of this comparatively small group of individuals as non-FATCA-reportable.
If they wanted to, but they don’t.
Thanks for the update. I am still here working hard behind the scenes for our rights as Natives and for all Canadians. It seems the whole US government is now stealing from us right to our faces. We will continue to fight this.
With the new NAFTA being changed to USFCU or United States Forced Compliance Ultimatum, I wonder what the lying scumbag Trump will do if we win this.
“I wonder what the lying scumbag Trump will do if we win this.”
This for me is the ultimate question. What happens when a nation says it cannot comply with FATCA. Does the US carry out it’s outrageous threats? I’ve said it before and will say it again, wars have been started over less, and the USA is picking a fight with the whole damned world.
@Mike
Indeed, interesting to speculate as to what would happen if the lawsuit succeeds. Possible outcomes:
1. The “hard Brexit” equivalent – we revert to non-IGA FATCA conditions and suddenly banks face greater risk and expense and need to take compliance more seriously, but of course are then subject to legal action because in so doing they violate Canadian privacy laws. A proper mess.
2. Trump goes batshit and takes retaliatory measures.
3. Trump realizes that FATCA is bad for him and the rest of the kleptocracy (Manafort!) and gets rid of it on the grounds that it’s a failed Democrat policy and a waste of money.
4. Some compromise whereby FATCA does not apply to anyone who can prove Canadian citizenship; US-citizen residents without Canadian citizenship are still subject to reporting.
“Does the US carry out it’s outrageous threats? I’ve said it before and will say it again, wars have been started over less, and the USA is picking a fight with the whole damned world.”
I was going to say that’s nothing new for the US, but today’s video says the US had an ally. Anyway, the US will win.
“What happens when a nation says it cannot comply with FATCA. ”
There’s two issues, discrimination and privacy/data-protection .
Canadians with US citizenship are presumably affected by CRS Wider Approach as well as FATCA. CRS requires all (including USCs) to certify tax-residence; thus avoiding the discrimination issue but magnifying the privacy/DP issue.
If the FATCA case succeeds, perhaps a CRS case will follow.
If the French FATCA case and the UK CRS case also succeed, maybe OECD will reconsider whether the AEOI project is justified in its present form.
Though by that time the present US administration may have finally succeeded in demolishing Roe v. Wade, and then they can get rid of FATCA.