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Author Archives: Eric

U.S. Senate regrets passing discriminatory anti-expat laws

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No, seriously, they totally do! Don’t believe me? Just look at the latest and greatest non-binding bipartisan resolution from Capitol Hill, brought to you by Senators Al Franken & Amy Klobuchar (D-MN), Ron Johnson (R-WI), and Tammy Baldwin (D-WI):

A resolution expressing the regret of the Senate for the passage of section 3 of the Expatriation Act of 1907 (34 Stat. 1228) that revoked the United States citizenship of women who married foreign nationals.

The Expatriation Act of 1907 was not completely repealed until 1940, meaning it took the U.S. government 33 years to fix the problem they created, and 74 years after that to admit that it was a dumb idea in the first place. Hope you aren’t planning to hold your breath for Washington to repeal FATCA and apologise for all the modern-day national origin discrimination which it’s causing.

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FBI did not add any renunciant records to NICS in March 2014

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The latest Report on Active Records in the NICS Index, released a couple of days earlier than normal, shows 24,220 records in the “Renounced U.S. Citizenship” category, down by two from the February 2014 report. (On the other hand, the number of people who were caught trying to use an ex-citizen’s identity to buy firearms has reached 61, according to the Federal Denials Report).

Months in which zero records get added to the renunciations category are hardly a rare occurrence; the most recent such case before this was in December 2012. That was also the same quarter for which the IRS reported a laughably implausible total of 45 people giving up U.S. citizenship or long-held green cards. This suggests that the problem was at the State Department, rather than any of the downstream agencies: after the CLN overseers in the Bureau of Consular Affairs handed more than three thousand ex-citizens’ records over to the FBI in October to clear up their backlog, they apparently decided to go into hibernation and put off all their work until the warmer seasons when acorns resumed their traditional abundance and they could feast to their hearts’ delight.

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Hong Kong government signs TIEA (not FATCA IGA) with U.S., proposes strengthening anti-discrimination laws

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Coincidentally, two separate news items which have the potential to collide in a very strange way came out on the same day here in Hong Kong. The bad news first:

Hong Kong and US sign tax information agreement

The Secretary for Financial Services and the Treasury, Professor K C Chan, signed today (March 25) in Hong Kong on behalf of the Hong Kong Special Administrative Region Government an agreement with the United States of America (US) for exchange of information (EoI) relating to taxes. The Consul-General of the US to Hong Kong and Macau, Mr Clifford A Hart, Jr, signed on behalf of his Government.

The South China Morning Post cuts through all the government euphemisms in its headline: “Hong Kong agrees to hand over financial details of Americans working in city to US tax authorities”. However, this is not as bad as it sounds, for reasons I’ll discuss after the jump; the very existence of this TIEA, rather than jumping straight ahead to a FATCA IGA, has some interesting implications for Hong Kong and Beijing’s larger strategy towards FATCA.

In addition, there’s another seed of hope for “U.S. Persons” here who have the crazy idea that they deserve the same rights as any other Hong Kong residents, even if the government doesn’t yet realise its implications:

問人「來自何地」或涉歧視

Asking people “where are you from” may become discrimination
《星島日報》，2014年3月25日 Sing Tao Daily, 25 March 2014
中港矛盾持續，港人辱罵內地人亦時有發生。平機會主席周一嶽昨表示，暫未收到有內地人在港受歧視的投訴，但有收到小量查詢，今年第三季檢討是否修訂四條歧視條例，專家正構思加入「個人的來源地」及「入境年份」等字眼，杜絕無理行為。 With the ongoing conflicts between mainland China and Hong Kong, there have sometimes been incidents of Hong Kong people abusing mainland people. Equal Opportunities Commission Chairman York Chow stated, although the EOC has not yet received any complaints from mainland people about discrimination they have suffered in Hong Kong, it has received a small volume of enquiries. In the third quarter of this year, the EOC plans to review whether or not to amend the four discrimination ordinances, and experts are considering adding language such as “person’s place of origin” and “year of immigration” to eliminate unreasonable behaviour.

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In a time of crisis, Ukraine’s bankers focus on what REALLY matters

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A stop to the violence and hatred? A stable coalition government? A resolution to the crisis in Crimea? Nah, none of that stuff really matters compared to the business of privatising the profits and socialising the costs. And with Ukraine’s U.S. “allies” pushing FATCA down their throats, the banks have some big costs they need to foist on the Ukrainian taxpayer, to make sure the banks don’t have to pay all of it themselves.

So Ukraine’s banks have taken a cue from Carl Levin’s strategy of sneaking FATCA itself through as a midnight amendment to a bill that was too long for anyone to read — they only conduct their anti-democratic IGA advocacy when no one is looking. And what better time than when the rest of the public is busy paying attention to some minor political kerfluffle like the fate of their country?

НАБУ обеспокоена отсутствием реальной имплементации Закона FATCA в Украине

NABU concerned about lack of real implementation of FATCA law in Ukraine
http://news.kompass.ua/news/2014-03-07-34186
Независимая ассоциация банков Украины (НАБУ) обеспокоена отсутствием официальной информации о подготовке проекта Соглашения между правительством Украины и правительством Соединенных Штатов Америки относительно имплементации Закона «О налоговых требованиях к иностранным счетам» (Foreign Account Tax Compliance Act, FATCA). Об этом Ассоциация сообщила в своем письме в адрес премьер-министра Украины Арсения Яценюка. The Independent Association of Ukrainian Banks (NABU) is concerned by the lack of official information on the preparation of the draft Agreement between the Government of Ukraine and the Government of the United States of America concerning the implementation of the Foreign Account Tax Compliance Act, the association stated in its letter to Prime Minister of Ukraine Arseniy Yatsenyuk.

 

“We must save our country immediately so we can surrender it to the IRS in one piece!”

Google Translate handles the article surprisingly well, so I’ll let you read the rest there. Apparently the greed and chutzpah of bankers is a universal language.

Data releases on renunciation, relinquishment, and green card abandonment

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Summary: South Korea’s Ministry of Foreign Affairs reports that 3,621 of their citizens filed Declarations of Permanent Return last year after cancelling foreign citizenship or permanent residence (likely to be about half from the U.S., though their report does not specify), prompting anguished reactions from Korean Americans who didn’t move back; only 95 new renunciants were stripped of firearms purchasing rights and added to NICS in February, the second-smallest monthly total since 2012; and finally, USCIS estimated that 9,371 people will file Form I-407 to abandon their green cards in 2014 and subsequent years, even though the average level in the past five years has been twice that.

Details and links after the jump.

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Obama Administration asks Congress for FATCA reciprocity in latest Green Book

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The “General Explanations of the Administration’s Fiscal Year 2015 Revenue Proposals”, or the “Green Book” for short, has just been released (hat tip: Tax Prof Blog, of course — and it seems Just Me beat me to the story in a comment a few hours ago). It includes a proposal to “Provide for Reciprocal Reporting of Information in Connection with the Implementation of the Foreign Account Tax Compliance Act”, a.k.a. “DATCA”, beginning in 2016. There are also a half-dozen other proposals which may also be of interest to extraterritorial tax filers, most of which were also offered up last year but failed to pass.

The inclusion of a proposal in the Green Book by no means ensures its passage (witness previous failed attempts to repeal “check-the-box”, or just note all the similarities between last year’s Green Book to this one’s), and it also gives concrete form to something which up until now was vague and uncertain. That means there is now specific language around which domestic opposition can coalesce, which in turn may provoke international concern about the likelihood of getting any actually reciprocity from these IGAs their bankers are urging them to sign.

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Who renounces U.S. citizenship? South Korean apple farmers

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Here’s yet another renunciation story of the kind that the U.S. media refuses to tell — a story about an ordinary man who decided to leave New York City and give up his U.S. citizenship, an immigrant who found that the American dream wasn’t all it was cracked up to be and that happiness is more important than money or status.

역이민 최용탁씨 3代의 歸去來辭

A homecoming letter for three generations of Choi Yongtak’s family
http://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=103&oid=032&aid=0000041501
2003-11-20 20 November 2003
충주|글 안홍욱|사진 박민규기자 Chungju. Text: Ahn Hong-wook. Photo: Park Min-kyu.
가는 길, 내내 궁금했다. 다들 선망하는, 그것도 성공적으로 정착한 미국 이민생활을 접고 돌아온 속내는 대체 무엇일까. 역이민해 정착한 곳도 대도시가 아니고 농촌. 돈 주고도 못 산다는 미국 시민권도 흔쾌히 포기했다고 한다. 학교에 다닐 아이들은…. He often wondered about the path he was following. Why on earth would he have packed up his successful & settled U.S. immigrant life that would have been the envy of many and come back here? The place where he settled down after coming back wasn’t a big city but a farming village. He even happily gave up something you can’t buy no matter how much money you pay: U.S. citizenship. The children, going to school …

 
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Chinese birth tourist’s baby pops out early in Mexico instead of LA, saved from lifelong IRS offshore investigations

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400px-Bandera_Mexicana ¡Viva México! Photo: Rafael Aparicio/Wikimedia, CC-BY-SA.

With all the scary news coming out these days, it’s more important than ever to remember to take a deep breath and smile. So to add to Petros’ recent posts, here’s something a little different from the Taiwan edition of Apple Daily, which you should probably take with an appropriately-sized grain of salt:

唱唱跳跳不慎早產 赴美孕婦墨西哥誕子

Too much fun leads to accidental pre-term delivery: pregnant woman going to U.S. gives birth in Mexico
http://hk.apple.nextmedia.com/international/art/20140228/18640489
2014年02月28日 28 February 2014
中國孕婦千辛萬苦赴美生子，結果生個墨西哥國籍的娃兒！網傳一名懷孕七月赴美產子的中國孕婦，因離預產期還早，就跟同一月子中心的其他孕婦去墨西哥旅遊，不料早產，生下一個男嬰，墨西哥籍。 A pregnant Chinese woman went through all sorts of hardships to go to the U.S. to give birth, but in the end she gave birth to a Mexican boy! A story is spreading on the internet about a seven-months pregnant Chinese woman who went to the U.S., but because it was still a while away from the expected date of birth, went on a trip to Mexico with another pregnant woman from the same birth centre, and unexpectedly had a pre-term delivery, giving birth to a baby boy, [who now has] Mexican citizenship.

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FATCA and China: still no news, just opinions, fantasies, and bad analogies

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Seeing as it’s been nearly eight months since I last wrote about this topic, I figured there’d be something new to say. But there really isn’t. The “best effort” negotiations conducted “as early as practicable” last summer with the aim of reaching a FATCA IGA “in advance of the January 2014 deadline in the legislation” have clearly produced no results, as law firm Dezan Shira’s China Briefing noted last week. Interestingly, mainland financial magazine Caijing reported on Dezan Shira’s article just yesterday — but only in English, not in Chinese. Other Compliance-Industrial Complex members are less honest about the lack of FATCA progress in China, and have taken to calling a pedestrian set of updated Chinese asset self-declaration regulations by the misleading name of “China FATCA” in an effort to generate hype.

The biggest genuine FATCA news I have to report is that finally, for the first time in nearly a year, a Hong Kong newspaper decided to let someone besides Patrick Yip at Deloitte and Jennifer Wong at KPMG say something about FATCA. Du Jinsong — apparently an MD in equity derivatives trading at Bank of China (International) Hong Kong — wrote a short opinion column in Wen Wei Po, one of Hong Kong’s “traditional left” pro-Beijing newspapers, telling us something we already know: Hong Kong’s finance industry would really like a FATCA IGA. What’s interesting about this column is the way in which he says it: he presents FATCA as a grand opportunity for Hong Kong to gain valuable “experience” with automatic information exchange and to help China to expand the previously-mentioned pedestrian set of updated asset self-declaration regulations into genuine control of the international financial system.

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Not “China FATCA”: foreign asset self-reporting under China’s new International Payments Statistical Declaration Regulations

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At the beginning of this year, China began implemented a new system of self-reporting for foreign assets by amending two-decade-old regulations which required reporting of foreign transactions. Though these amendments do not add any new reporting requirements for financial institutions, neither the old nor new regulations ever applied to Chinese citizens permanently resident abroad, they don’t violate the privacy laws of foreign countries, and the implementation of the regulations is actually proceeding on schedule rather than being delayed by years, the Compliance-Industrial complex has been quick to saddle it with the inaccurate name of “China’s FATCA”.

For a translation of the regulations and a brief analysis of the impact of the amendments, keep reading. This post probably won’t be of much use to U.S. Persons seeking practical advice for dealing with the citizenship-based taxation mess that the Homelanders have thrown at us; it’s a supplement to my next post that’s actually about China and FATCA.