Liberty and justice for all United States persons abroad

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Category Archives: Issues regarding US persons abroad

Friday May 29, 2020 is “Jenny Day” in the UK – UK FATCA challenge ruling to be unveiled

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The above tweet references an article from Helen Burggraf at American Expat Finance. The article includes:

First FATCA challenge over GDPR

As reported, a U.S. born woman who has been identified only as “Jenny”, and who has been a British citizen since 2010, launched her complaint against HMRC last year, in what was said at the time to be the first legal challenge to FATCA since the GDPR came into force in 2018.

Jenny claims that by providing her personal financial information to the U.S. tax authorities in compliance with the U.S. tax evasion law known as FATCA, HMRC is violating her data protection rights, both as a British and EU citizen.

Jenny, who lives in the north of England and who has been described as married and working with deaf students at a university, where she is a research associate, is crowd-funding her FATCA challenge on the CrowdJustice.com website, where, since last September, she has managed to raise some £80,338, from 426 pledges thus far, although she is still some way short of her target of £120,000.

FATCA was signed into law in 2010 as a revenue-providing element of a domestic jobs bill known as the HIRE Act, while at the same time being intended to discourage the use by Americans of overseas bank accounts to hide their wealth.

Known officially as the Foreign Account Tax Compliance Act, it establishes a 30% withholding tax on U.S. source income for any non-U.S. financial institutions that are found to have failed to report to the U.S. authorities the bank account details, including assets, of any of their clients who happen to be U.S. citizens or Green Card holders.

When enforced alongside the U.S. system of citizenship-based taxation, the FATCA regulations mean that an estimated 9 million U.S. citizens living outside of the U.S. are unable to avoid paying taxes to both their country of residence and the U.S., although there are some mechanisms they can use to avoid being taxed twice for the same thing on the same income.

To read the complete and comprehensive article (which includes a description of the basis for the legal challenge) click here.

The extradition process – Part 5: As a matter of administrative law, the Supreme Court of Canada seems unlikely to review extradition orders

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On December 14, 2012 the Supreme Court of Canada, in the unanimous decision in Sriskandarajah v. United States of America, 2012 SCC 70, [2012] 3 S.C.R. 609 authored by (then) Chief Justice McLachlin, confirmed the extradition of Suresh Sriskandarajah to the United States. The decision was short, to the point and expressed the court’s view that extradition decisions were within the discretion of the Minister Of Justice. The crux of the decision appears to be paragraph 33 which includes:

As explained above, the Minister’s order of surrender is a political decision that attracts a high degree of judicial deference. The Extradition Act confers broad discretion on the Minister’s decision to extradite

In other words, the presumption is that, the Supreme Court of Canada will NOT review extradition orders.

It’s as though, the US Canada Extradition Treaty means that:

1. The extradition request from the United States is mechanical (even though none of the conduct occurred within the United States); and

2. The willingness to extradite an individual from Canada to the United States is mechanical.

It appears that individuals who are the subject of an extradition request from Canada to the United States, have fewer legal protections, than do individuals charged with a crime in Canada …

It’s almost as though, the extradition process is designed to circumvent (or at least “water down”), the protections (such as they are), that individuals are afforded if their trials take place in Canada.

Interestingly (and predictably), when extradited to the United States, Mr. Sriskandarajah pleaded guilty, preferring the certainty of a two year period of incarceration, to the maximum which would be sought should he have suggested that he was innocent. The Canada US extradition treaty appears to be a way that the United States can export its version of criminal law into Canada. One wonders whether Canada should even have an extradition treaty with the United States. Conrad Black considers this in a recent article …

On December 14, 2012 (the day the decision was released), Mr. Sriskandarajah was completing his first semester at a Canadian law school. He is now apparently back in Canada and (having completed law school) seeking a license to practise law in Ontario.

Justice McLachlin’s decision was short and joined by the rest of the judges. Of most significance (I think is) …
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The extradition process – Part 4: The Meng Wanzhou Extradition Case Demonstrates The Similarity Between Extradition Treaties and The #FATCA IGAs

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Part A – The Similarity Between The FATCA IGAs and Extradition Treaties

CBC has produced an excellent ten part podcast called “Sanctioned”. It is very well done and explores the Meng Wanzhou arrest and extradition process to the United States. As you know, at the request of the United States, Canada arrested Meng Wanzhou for extradition to the United States. The result of arresting Meng Wanzhou was that China arrested two Canadian citizens and passed a death sentence on a third. In the spirit of retaliation China has imported fewer Canadian products – resulting in economic hardship to Canada and individual Canadians. Furthermore, Meng Wanzhou’s lawyers have argued that Canada violated Meng Wanzhou’s Charter rights. The suggestion is that Canada has made the appeasement of the United States a priority over protecting Canada’s values and the rights of Canada citizens.

Shades of the FATCA IGAs. By entering into a FATCA IGA, Canada has harmed Canadian citizens for the purpose of doing the bidding of the United States. The US Canada extradition treaty has placed Canada in a similar situation. Should Canada appease the United States at the cost of damaging its own citizens? The Meng Wanzhou case has an additional dimension. Should Canada – in a global world – damage its economic relationship with China in order to appease the United States?

The FATCA IGAs and the Extradition Treaty are very similar in three key ways.

First: In both cases the United States is using an “agreement” to require Canada to send something to the United States. In the case of the Extradition Treaty, the United States is demanding a person. In the case of FATCA, the United States is demanding private information about a person. Should the FATCA IGAs be viewed as (in substance) as being an Extradition treaty for information? (In the case of information, Jenny’s FATCA UK lawsuit has demonstrated that US FATCA demands override key provisions of the GDPR.)

Second: Notice that in both the FATCA IGAs and the Extradition treaty, the United States is imposing US law on Canadian soil. (In the case of FATCA there is no reciprocity. In the case of the Extradition treaty there may or may not be reciprocity.) Specifically, the FATCA IGAs export Chapter 4 of the Internal Revenue Code into Canadian Law (Part XVIII of the Income Tax Act of Canada). In the case of the Extradition Treaty the United States is asking Canada to accept the claim that the violation of a US sanction against Iran meets the standard of “dual criminality”.

The United States is using extradition treaties to export US criminal law to other countries:

When the U.S. France extradition treaty was sent to the U.S. Senate for approval, President Clinton noted that:

The United States recognizes the extraterritorial application of many of its criminal statutes and frequently makes requests for fugitives whose criminal activity occurred in foreign countries with the intent, actual or implied, of affecting the United States.

Third: In both cases the agreements with the United States override rights afforded to individual Canadians under Canadian law. On the most basic level, the FATCA overrides statutory non-discrimination provisions found in provincial human rights codes. Parts 7 and 8 of the CBC Podcast series describe how Meng Wanzhou’s lawyers make the case that her Charter rights were violated at the outset.
Clearly, one must ask the following questions:

Should countries violate the rights of its own citizens in order to appease the United States?

Should the United States be permitted, through the use of international “agreements” to lower the level of individual rights to the level afforded to American citizens generally?

Should Canada, (as do many other countries) reserve the right to NOT extradite its own citizens?

Should the FATCA IGAs be amended so that the accounts of Canadian citizens resident in Canada are not subject to the FATCA IGAs? (Notably the Canada/US tax treaty includes a provision that provides that Canada will not help the US collect US tax debts on Canadian citizens.)

The broader context of the US extradition demand of Meng Wanzhou

It’s shocking that the United States can (1) unilaterally pull out of the Nuclear agreement with Iran then (2) impose sanctions against Iran in accordance with US law and (3) use Extradition Treaties to require treaty partner countries to seize individuals who happen to be physically present in their territory. It’s obvious that Meng Wanzhou has violated no law of Canada.

Extradition Treaties: A View From The Homeland

A short but interesting presentation conducted by Amy Jeffress (the lawyer for Anne Sacoolas) is here.

Conclusion: The United States is using international “agreements” for the purpose of “planting Old Glory” in other countries.

Part B – On To The CBC Podcast Series “Sanctioned”

At the very least I suggest that you listen to Episode 8 which may be found here.

https://www.cbc.ca/listen/cbc-podcasts/365-radio-sanctioned/episode/15738680-episode-8-the-rule-of-law

THANKS for a July 4 donation from a constant Western Canadian Supporter — Canada’s independence was given away by Conservative and then Liberal governments — Our FATCA Canada lawsuit seeks with your donations to strike down the U.S.-imposed FATCA IGA and enabling provisions of Canada’s Income Tax Act in their entirety — First funding milestone reached, C$45,000 raised with thanks from Canadian and International Supporters to pay legal costs, $58,665 more needed — Please donate.

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CANADIAN FATCA LITIGATION UPDATE JULY 5, 2020:

LITIGATION STATUS: The Notice of Appeal has been filed. At present our lawyer is selecting the documents that will go into the Appeal Book. My (SK) personal guess is that the trial itself will take place during the first quarter of 2021.

DONATIONS ARE NEEDED TO FUND our lawsuit attacking the constitutionality, regarding autonomy, privacy, and equality rights, of the Canadian FATCA IGA legislation that was imposed by the United States on Canada. We want our sovereignty back.

You can DONATE by cheque and cash in the mail, PayPal (easiest) and transfers.

Our four ADCS Board members are John Richardson (co-chair and legal counsel), Patricia Moon (Treasurer), Carol Tapanila, and Stephen Kish (Chair).

— The FATCA Canada lawsuit seeks to strike down the FATCA IGA and enabling provisions of Canada’s Income Tax Act in their entirety. The ligitation began in 2014 and is now at the Canada Federal Court of Appeal stage — likely to be resolved at the Supreme Court.

— The Alliance for the Defence of Canadian Sovereignty and Plaintiffs Gwen and Kazia have met the first installment milestone (C$45,000) for legal costs (Canadians and International Supporters, thank you for your support!) and we now estimate that we will need a further C$58,665 to cover remaining expenses.

ADCS Legal Advisor John Richardson says: “The Government of Canada’s lawyers are openly justifying FATCA and the FATCA IGAs in order to pacify the United States which is (at least at present) a Foreign Government. The purpose of the Charter of Rights is to protect individuals from the Government of Canada – not to protect the Government of Canada from other countries. By funding the FATCA Canada lawsuit, you are sending a clear message to the Government of Canada that you will not allow them to surrender Canada’s sovereignty to the United States.”

Embee says: “This lawsuit may have been overshadowed by these trying times but it’s still important to assert one’s right to justice and plead for common sense to prevail in whatever form US bully boy tactics threaten our well-being”

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The extradition process – Part 3: The concept of “dual criminality” – How does it apply in the Meng Wanzhou case?

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Prologue:

__________________________________________________________________________

Introduction:

In March of 2020 I began a series of posts on extradition. In the first I noted that “As The World Becomes Smaller, Extradition Becomes Bigger“. That post discussed the growing prevalence of extradition and noted the recent cases of Julian Assange (UK), Meng Wanzhou (Canada), Ruhollah Nejad (France) and Michael Lynch (UK). In each of these cases the United States is seeking the extradition of individuals to the United States. The case of Anne Sacoolas is an example of Britain seeking the extradition of a U.S. citizen from the United States to Britain. That post also included the assertion that:

The United States is using extradition treaties with other countries, to require those other countries to arrest and extradite individuals for crimes which did NOT occur in those countries or in the United States. To put it another way, the United States apparently sees extradition treaties as way to facilitate it’s role as the world’s “Lone Ranger” – scouring the world for people it doesn’t like – with every treaty parter playing the role of “Tonto”. (Apparently, “Jay Silverheels, who played The Lone Ranger’s sidekick Tonto in the TV series and movies, was born to a Mohawk chief on the Six Nations Reservation in Brantford, Ontario …”. This would make Canada a natural “Tonto” in the use of extradition treaties to police the world.)

When the U.S. France extradition treaty was sent to the U.S. Senate for approval, President Clinton noted that:

The United States recognizes the extraterritorial application of many of its criminal statutes and frequently makes requests for fugitives whose criminal activity occurred in foreign countries with the intent, actual or implied, of affecting the United States.

In Part 2 of my extradition series, I described the Canadian extradition tools and process.

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Andrew Scheer asked the right question when he asked whether a Canadian Politician could be an American citizen

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The Globe and Mail was the first to break the story about Andrew Scheer’s dual Canada US citizenship. Mr. Scheer’s US citizenship generated a number of comments on Brock.

The above tweet references the follow-up article in today’s Globe and Mail. I believe it’s unlikely that Mr. Scheer ever started the process to relinquish US citizenship. But, who really knows?

A couple of thoughts:

1. The comments on the Globe article are accelerating. Interestingly not a single comment so far has addressed the issue of US citizens being subject to IRS jurisdiction. Is it tolerable for a Canadian MP (including a Party Leader) to be a “US citizen”? The problem is that dual citizenship in general is not the same as dual citizenship when one of the citizenships is US. The difference is that US citizens are (as we all know) members of the World’s Premier “Tax, Form and Penalty Club”. Should Canadians tolerate a situation where their Prime Minister (or any MP) is subject to IRS jurisdiction?

2. Is it possible that Mr. Scheer implied/recognized that US citizenship is different from other citizenships. An August 13, 2005 blog post from Mr.Scheer included:

Quick Questions

I have a few quick questions for anyone who thinks that Michaelle Jean is a good choice to be our next GG.

1) What are her qualifications? What experience does she have that would assist her to carry out her duties as our head of state, including the potential to be a referee in a minority government situation?

2) Does it bother you that she is a dual citizen (France and Canada)? Would it bother you if instead of French citizenship, she held U.S. citizenship?

3) It is being reported that her husband is quite chummy with some FLQers belonging to the same group that killed Pierre Laporte. If her husband was quite friendly with Al-Queda terrorists, would that be alright?

Is Mr. Scheer recognizing that not all citizenships are the same? For the purposes of being a Party Leader (and potential Prime Minister), is Mr. Scheer implying that there might be a difference between American citizenship and French citizenship?

He may or not be implying that there is a difference.

The reality is that no country, except the United States, should tolerate a head of state who holds US citizenship.

France does not threaten its citizens abroad with penalties.

When it comes to #FATCA, the questions include: What did the EU know and when did they know it?

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Do FATCA And The CRS Conflict With Europe’s GDPR Regulation? – A Europe Centric Basis For Attacking The Automatic Information Exchange Mechanisms Of The 21st Century

Legal attacks on the FATCA IGAs have attracted the attention of individuals and law firms in both Canada and the United States. The FATCA Canada lawsuit began in 2014. Jenny’s FATCA UK attack was organized in 2019. Jenny’s UK based challenge rests largely on the the claim individuals in Europe (courtesy of the GDPR), have rights to their personal information and that automatic information exchange violates those rights. (Europe takes privacy rights more seriously than America. Still, it has been difficult for Jenny to raise money for her lawsuit.) The ADCS FATCA Canada lawsuit is based on different legal principles. Regrettably, Canada does not have a GDPR. As a result the ADCS plaintiffs must argue that the FATCA IGA violates the general provisions of Canada’s Charter of Rights and Freedoms. On the other hand, the UK does not have a written and entrenched Charter of Rights and Freedoms. Therefore, Jenny’s lawsuit is contemplated to proceed on the basis of a breach of the GDPR. (The GDPR is new legislation and it’s impact is a live and evolving story.)

Additionally, it’s worth noting that the two lawsuits are based on philosophically different assumptions:

- the FATCA Canada lawsuit seeks to strike down the IGA and enabling provisions of Canada’s Income Tax Act in their entirety; and

- the proposed FATCA UK lawsuit does not assume that automatic bank information sharing provisions are bad per se, but that FATCA and CRS are excessive and go beyond what is necessary (proportionate) to achieve their goals.

This does NOT mean that the Canadian and UK attacks on FATCA are not relevant to each other. For example, a conclusion that the FATCA IGA violates Europe’s GDPR, would support an argument that the FATCA IGA violates various provisions of Canada’s Charter of Rights. Similarly a ruling in Canada that the IGA conflicts with Canada’s Charter of Rights would provide support for the “lack or proportionality” that is required by the GDPR.

Both the Canadian FATCA lawsuit and the UK FATCA lawsuit should be supported by all people (a diminishing number) who believe that individuals should and do have rights. A recent post at Brock described the “Pincer Attack” on Americans abroad, led by Chip Harter on behalf of US Treasury and former Prime Minister Of Italy – Paolo Gentiloni – on behalf of the EU. The “Gentiloni Doctrine” officially introduced the world to the principle that:

1. The United States can claim any European as a US citizen; and

2. Once claimed to be a US citizen, that individual is subject to US worldwide taxation.

The “Gentolini Doctrine” suggests strong European support for FATCA and the FATCA IGAs.

The purpose of this post is two-fold. First, (A) to discuss the claim that FATCA and the CRS conflict with Europe’s GDPR. Second (B), to consider the extent to which Europe has been complicit in FATCA and for how long.

Part A – FATCA And The CRS Meet Europes’s GDPR

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From @HelenBurggraf: Homelanders denied CARES Act benefit based on Marriage to noncitizens sue Trump Administration

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Continuing to chronicle the life and times of the FBAR Marriage. In my last post I noted that Homelanders were about to learn why Americans abroad have known for years. Specifically that, the United States doesn’t like it when a US citizen marries an alien. Admittedly, a marriage between a US citizen and a resident alien is far less offensive than a marriage between a US citizen and a nonresident alien (the latter providing significant opportunities for tax evasion). There is no mistake. Congress continues to take steps to punish those who marry noncitizens. The latest attack has been the denial of CARES Act benefits to those who file jointly with an alien spouse who has no Social Security Number.

Americans abroad may be happy to accept this unfairness. But, apparently certain Homelanders are not. As reported by Helen Burggraf at American Expat Finance, the Trump administration is on the receiving end of lawsuits.

Two lawsuits were filed in the U.S. on Friday against President Trump and other key U.S. government officials over the denial to certain American taxpayers of their right to receive CARES Act “Economic Impact Payments” because they are married to non-American citizens who, though taxpayers, don’t have Social Security numbers

A third lawsuit, being brought by the Mexican American Legal Defense and Educational Fund on behalf of six American citizens who say they were denied the payments for the same reason, was filed on Tuesday, April 28, against the federal government in a Maryland court, according to an Associated Press report.

One of the Friday lawsuits was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division (in Chicago, pictured above) by Blaise & Nitschke, P.C., which is alleging that these American taxpayers’ civil rights are being violated, and which is demanding that the U.S. government “declare their rightful entitlements under the CARES Act, and afford them the equal protection of our country’s laws”, according to a summary of the lawsuit posted on the firm’s website.

Accompanying Blaise & Nitschke in bringing the suit, on behalf of “plaintiff John Doe, individually and on behalf of the proposed class”, is Khalaf & Abuzir, LLC, which specializes in immigration law. The named defendants are Trump (“in his official capacity as president of the United States”); CARES Act sponsor and Republican Senator Mitch McConnell; and U.S. Treasury Secretary Steven Mnuchin.

Read the article and enjoy.

Americans abroad have lived with the consequences of the #FBAR Marriage for years. Now Homelanders are learning what it means to be married to a non-citizen

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Introducing the FBAR Marriage – A Marriage Between A US Citizen And A Non-citizen

In the early years of Brock I wrote a number of posts about the problems and difficulties caused by the “FBAR Marriage“. In it’s most basic terms, the “FBAR Marriage” is a marriage between a US citizen and an alien (non-citizen).

A January 3, 2014 comment at Brock included:

It doesn’t matter if you are in or out of the country where the USG is concerned when it comes to “foreigners” as spouses. My Canadian husband was routinely harassed by US Border guards when we were dating and it wasn’t until he told them that I was emigrating north as opposed to him coming south that it stopped. The USG simply hates extra-territorial dating/mating. The higher tax rate is a way to punish us though for not coercing our spouses into filing jointly so they too can be USP’s for taxable purposes. They see our marriages as tax evasion and while I would rule out entirely that someone somewhere at sometime may have married a non-USC for that purpose, I seriously doubt that the percentage of “mixed” marriages have tax issues to thank for their existences.

The Two Kinds Of FBAR Marriages – Determined by the immigration status of the alien (noncitizen) spouse

Some thoughts on each …

Type 1 – A US Citizen is married to a “resident alien”: A “resident alien” (AKA Green Card holder) will have a US Social Security Number and will be taxable on Worldwide income. It is probably more common for Homelanders to be married to resident aliens. The Type 1 FBAR Marriage is less offensive to the US Government. After all, the presumption is that “resident aliens” actually live in the United States, are subject to worldwide taxation and reporting and will become US citizens.

Type 2 - A US Citizen is married to a “nonresident” alien: A “nonresident” alien does not have a Green Card. (If a nonresident alien lives in the United States without a Green Card or other kind of visa that nonresident alien is an “illegal” (and subject to a whole new set of tax penalties)). It is probably more common for Americans abroad to be married to nonresident aliens. The Type 2 FBAR Marriage is extremely offensive to the US Government.

Marriage can be difficult – For both Americans Abroad and Homelanders, the “FBAR Marriage” is particularly difficult

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