EU economic chief Gentiloni to Europe's 'accidentals': 'no evidence FATCA infringes your basic bank account rights' https://t.co/m8syK6XKN6
— U.S. Citizen Abroad (@USCitizenAbroad) April 9, 2020
In a previous post I described America’s direct message to European Governments and to European residents who were born in America.
The message was simple, clear and unambiguous:
You either comply with the American extraterritorial taxation (and reporting) regime or you renounce!
Understandably, European citizens have looked to their Governments to protect them. As a case in point:
On February 11, 2020 Mr. Bellamy of the European Parliament posed the following question for answer, (pursuant to Rule 138), to the European Commission:
‘Accidental Americans’ is the term used to describe 300 000 Europeans who, while born in the United States, only lived there for a very short while or not at all.
Ever since the vote on the Foreign Account Tax Compliance Act (FATCA) in 2014, they have been targeted by the US Government, which is demanding they pay US taxes on income that is paid to them outside of America. ‘Accidental Americans’ who declare their income in the countries of which they are citizens and where they reside have even had to face the prospect of having their bank accounts closed. Banks have been threatened with having to pay almost 30 % in taxes on all their financial flows transiting through the United States. This state of affairs was placed on hold by an 18-month moratorium.
Will the Commission take action to defend its fellow citizens by guaranteeing them access to a bank account and fair treatment on tax, in order to protect them from the arbitrary extraterritorial application of this law? Are there plans to renegotiate the agreement on implementation of FATCA on an EU-wide basis, with identical reciprocal sharing obligations for both sides of the Atlantic?
https://www.europarl.europa.eu/doceo/document/E-9-2020-000816_EN.html
At its core, the question is asking whether the European Parliament would take action to defend European citizens, from the extra-territorial application of US law, to European residents who, the United States claims to be U.S. citizens. (Note that the FATCA IGAs allow the United States to define and redefine who is a U.S. citizen). Paolo Gentiloni replied as follows:
“The bilateral agreements between EU Member States and the United States (US) implementing the Foreign Accounts Tax Compliance Act (FATCA) are not within the remit of the Commission unless they breach EC law. To date, there is no evidence of any such breach. Nationality ties, even when acquired by ‘accident’, come together with the existence of reciprocal rights and duties, including paying taxes in the United States for US citizens.”
The impact of FATCA on individuals and financial institutions and the lack of full reciprocity have been raised with the US authorities by Members of the Commission and their competent Services on a number of occasions. We have seen improvements on the first two issues, i.e., the impact on citizens and financial institutions, with additional guidance and information published on US administrations websites, and new ‘relief procedures’ for individuals who wish to relinquish their citizenship.
Concerning the respect of the Payment Accounts Directive, the Commission has looked into the alleged infringements of the right to a basic bank account as prescribed, but has found no evidence of violation of the EU legal framework in the national measures transposing the directive.
The negotiation on an EU agreement with the US on automatic exchange of information would be conditional to a mandate by the Council. So far, the Commission has not received any indication that such a mandate is being considered”
https://www.europarl.europa.eu/doceo/document/E-9-2020-000816-ASW_EN.html
In its basic terms, Mr. Gentiloni is saying that the EU Parliament doesn’t have jurisdiction over the issues raised in the question. The question of the extra-territorial application of U.S. law on European soil is an issue that is NOT within the jurisdiction of the EU Parliament (the jurisdiction being restricted to issues that govern the relationship among the EU Parliament and its members states). Put it another way: This is not our problem.
If that is what Mr. Gentiloni really believes then he should have ended his answer after saying:
“The bilateral agreements between EU Member States and the United States (US) implementing the Foreign Accounts Tax Compliance Act (FATCA) are not within the remit of the Commission unless they breach EC law. To date, there is no evidence of any such breach.”
If the EU Parliament really has no jurisdiction then his first two sentences (in the above block quote) were sufficient.
Yet, Mr. Gentiloni continued expressing (what appears to be nothing more than his personal view) that regardless of the EU’s jurisdiction:
“Nationality ties, even when acquired by ‘accident’, come together with the existence of reciprocal rights and duties, including paying taxes in the United States for US citizens.”
Mr. Gentiloni doesn’t seem to understand (or claims he doesn’t) that the issue is with respect to:
1. EU citizens who are EU residents
2. Who are being asked to pay taxes to the United States on income earned in the EU.
Apparently, Mr. Gentiloni doesn’t understand that the FATCA IGAs allow the United States to define and redefine the definition of US citizen for tax purposes. In fact, there is NOTHING WHATSOEVER to prevent the United States to amend the definition of US citizen for tax purposes to include Mr. Gentiloni himself. Interestingly a recent comment on Facebook included:
The only way to get real action would be for the US to grant hereditary honorary US citizenship to all EU heads of state, EC commissioners and heads of service, without a right of refusal on their part.
Legally and morally, there is no difference between taxation based on the accident of birth and taxation based on the accident of unasked for honorary citizenship.As I have mentioned previously, there is precedent for my seemingly laughable suggestion, given that there is an exception to the limitations against unlimited transmission of US citizenship to descendants without some period of residence in the US. In effect, the French General Lafayette and all his male descendants, down to the present day, have been given hereditary, honorary citizenship, which carries with it the curse of citizenship based taxation!
Surely, part of the purpose of the EU is/was to create a whole greater than the sum of the parts. An act by a foreign power (the United States) that weakens each of the EU members is a reason for the European Parliament to speak with one voice and defend the interest of Europe and European interests against arbitrary and unjust US law.
As one member of the European Parliament said at the FATCA hearings:
“These are European citizens. If we are not going to protect European citizens we might as well go home.”
But, there is another option. By its statutory terms, FATCA does NOT apply to U.S. Territories. Perhaps the easier solution would be for European countries to simply become territories of the United States. This would solve the FATCA problem and prevent the European Parliament from further embarrassing itself.
Perhaps Mr. Gentiloni should open the negotiations himself.
But, in the days leading up to Europe’s formally surrendering its sovereignty to America, the message from the EU to European citizens “Born In The USA” is:
Nationality ties come with obligations including paying taxes to America!
It looks like this election will come down to Biden and Trump.
Does anyone have any ideas as to which candidate would be most conducive to ending CBT and FATCA.
Neither. It’s so far off anyone’s radar at this point.
What R.H.said……
FATCA was passed during the Obama administration. Don’t count on Biden because he was Obama’s V.P. (Getting tough on cheaters who use foreign accounts to evade tax, etc, etc.)
Trump has most likely never heard of FATCA and doesn’t have a clue what CBT means, but if someone explained to him that it was a way the US could screw other countries by taxing their residents, he’d be in favor of it. That’s because he thinks the entire world “owes” the US.
The EU know the score, they know what is happening.
For reasons best known to them, they simply have no wish to act and so play down the concerns and even tell a pack of lies.
Future EU tax policy in mind, no wish to be called hypocrites?
I dunno, but these people are not so stupid as to understand the reality here.
“The message was simple, clear and unambiguous:
You either comply with the American extraterritorial taxation (and reporting) regime or you renounce!”
Perfectly reasonable imo, for accidentals in particular, presuming the fee was reasonable — not $2,350 USD.
There is nothing reasonable about having to renounce citizenship to exercise a basic human right without being effectively punished for it. Concentrating on accidentals to pull the heart strings and emphasise the injustice here is all well and good, but the entire population are subject this abuse if they dare leave the tax plantation.
And to think the EU Commission has ambitions of creating a proper federal superstate, an European superpower capable of standing up and defending the rights of EU citizens……
If they cannot find the stones to stand up to the USA on a low ball issue such as this how the hell do they expect to do on an issue of real substance.
I found a Congressional report last night below where some members of Congress were able to obtain internal US Treasury Dept emails from doing Obama administration on a matter unrelated to FATCA but involving international relations. Anyways it is interesting to see the behind the scenes minutiae and importance of creating talking points along the lines of what came out in the Chip Harter and what we have been hearing from the Treasury Department for years.
I can’t totally criticize Treasury as I have gone over talking points in advance of meeting I have had with government officials with people like John Richardson, Jude Ryan, and Karen Alpert. I feel as if though the was US Treasury communicates internally is far more close minded and repetitive in a way I don’t think my own internal communications are with people like John, Jude, and Karen. I actually know and understand at same level the case FOR FATCA and CBT even though I violently disagree it. The Treasury on the other hand I don’t think really understands at all the case AGAINST FATCA or CBT or really any other political stance which goes against Treasuries public proclamations.
**FATCA is mentioned several times in these emails and part me just know wonder if the UK for example when along with FATCA for reasons other than it’s public justifications when you read the above documents below.
https://financialservices.house.gov/uploadedfiles/07072016_oi_tbtj_sr.pdf
Cost of renunciation $1150 and dropping!
# Ron. 😉
Ron and Mike, cost not dropping for accidentals though, and they are the topic of this article. Reason: accidentals don’t typically have SINs.
I meant SSN numbers.
On that note, for anyone planning to file a return (once) to score the free money and wants direct deposit rather than waiting for a cheque, Transferwise now offers a free multi-currency bank account that will give you a US routing and account number. Pretty cool.
Mike: ” There is nothing reasonable about having to renounce citizenship to exercise a basic human right without being effectively punished for it.”
Actually, from the accidental perspective, the issue is not *having* to renounce it is being *unable* to renounce easily and affordably.
And there may be Accidentals who refuse to even consider that they are US citizens at any rate. Why should they go through the effort of renouncing something they don’t believe should have been thrust upon them in the first place?
You can see how the EU bureaucracy consists of the same knuckleheads as their US counterparts. Gentiloni obviously did not either understand the issue, or simply looked down on it from his exalted EU post. Asking people like Le Pen, Savini or Orban to take this cause would be more effective, they know how to impart wisdom to these Euromorons.
Le Pen, Savini and Orban? Right. The racist/populist/authoritarian bloc will absolutely stand up to Trump and tell the US where to go. Dream on.
One may dream on but at the very least , the above aforementionned would try to have better economic relations with Russia. If they ever do, a lot of things could change . However, the US are adept at preventing that from ever happening. I am not a fan of Russia but I am a huge fan of global political and economic balance, irrespective of who offers it.
You know the old axiom about absolute power and that it corrupts…
Indeed. Exhibit A: Hungary.
Or would you rather be the Ukraine at this point,played with by all sides. At least ,Hungry has a real home grown dictator.
It should soon be tossed out of the EU as it’s no longer even a nominal democracy.
Finally catching up on my Brock reading:
“The bilateral agreements between EU Member States and the United States (US) implementing the Foreign Accounts Tax Compliance Act (FATCA) are not within the remit of the Commission unless they breach EC law. To date, there is no evidence of any such breach.”
Bureaucrats, politicians, legal advisors and judges make all their decisions on the basis of whether or not a law has been, or will be, broken. They almost never look past the law to examine the ordinary human ethics of a situation. FATCA, as applied in the case of Accidental Americans, is about as unethical as it gets, yet it is, in fact, perfectly legal (although some of us have debated that, too). There needs to be a general recognition that when law and ethics (i.e. common sense) are at loggerheads, ethics must prevail. In my opinion, the lack of recognition of this fundamental principle is the bricks and mortar of which the monstrous barricade between us and our human rights is made.