Liberty and justice for all United States persons abroad

The Isaac Brock Society

FATCA and the EU

April 2019

03: Disappointing May 2, 2019 Response From Pierre Moscovici, Member of European Commission, to FATCA Complaints of Sophie in’t Veld

July 2018

06: EU Lawmakers Vote to Kick-Start FATCA Talks With United States
05: Independence Day attempt in European Parliament–the Empire lives well

July 2017

11: Refreshing: @SophieintVeld calls EU answer to plight of #AccidentalAmericans “bullshit”

September 2016

30: #FATCA Came Last to EU, but Mandatory Fingerprinting was First

August 2015

31: Parliamentary Question: Legality of intergovernmental agreements (IGAs) on FATCA

January 2015

10: EU Residents/Citizens: This is For You

September 2014

13: US seeks additional Customs Pre-Clearance locations in the EU

August 2013

24: European Parliament opposes exchanging bank data with the US

June 2013

01: The Bigger Perspective on EU #FATCA Public Hearing, Policy Laundering, Reciprocity and the Consequences

May 2013

31: Public Hearing on FATCA at the European Parliament in Brussels

23: EU Parliament Hearing on FATCA May 28th

April 2013

04: MEP Sophia In’t Veld discusses FATCA in EU Parliament

March 2013

25: Question and Answer on FATCA in the European Parliament

February 2013

26: EU Tax Chief Urges U.S. Support for Transactions Levy @BloombergNews

April 2012

19: US bullies the EU into sharing passenger data

March 2012

10: Two prominent members of European Parliament raise concern over FATCA five agreement

February 2012

20: EU Parliament and FATCA

16: Are China, Russia, the EU and Switzerland poised to give in to FATCA?

January 2012

23: EU Charter of Fundamental Rights

546 thoughts on “FATCA and the EU”

  1. “Tax crimes: special committee calls for a European financial police force”
    https://europeansting.com/2019/02/28/tax-crimes-special-committee-calls-for-a-european-financial-police-force/

    Parliament’s special tax committee on Wednesday adopted a detailed roadmap towards fairer and more effective taxation, and tackling financial crimes.

    The recommendations adopted by the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3) range from overhauling the system for dealing with financial crimes, tax evasion and tax avoidance, notably by thoroughly improving cooperation in all areas between the multitude of authorities involved, to setting up new bodies at the EU and global level.

    The numerous findings and recommendations include:

    Commission to immediately work on a proposal for a European financial police force;

    An EU anti-money laundering watchdog should be set up;

    A global tax body should be established within the UN;
    [..]
    The report was adopted with 34 votes to 4 and 3 abstentions.

  2. The European Parliament…

    290. Considers the information gathered during the committee visit to Washington DC about the US tax reforms and their possible impact on international cooperation to be of particular importance; finds that some of the provisions of the US Tax Cuts and Jobs Act of 2017 would be incompatible with existing WTO rules according to some experts; notes that certain provisions of the US tax reform seek, unilaterally and without any reciprocity, to revitalise transnational benefits attributable to US territory (presuming that at least 50 % of these are generated on US territory); welcomes the fact that the Commission is currently in the process of assessing the potential regulatory and commercial implications of, in particular, the BEAT, GILTI and FDII provisions of the new US tax reform; asks the Commission to inform Parliament of the results of the assessment;
    291. Notes that two types of intergovernmental agreements (IGAs) on the Foreign Account Tax Compliance Act (FATCA) were developed to help FATCA conform with international laws; notes that only one of the IGA Models is reciprocal; deplores the severe imbalance in the reciprocity of these agreements, as the US typically receives far more information from foreign governments than it provides; calls on the Commission to conduct a mapping exercise to analyse the extent of reciprocity in the exchange of information between the US and the Member States;
    292. Calls on the Council to give a mandate to the Commission to negotiate an agreement with the US to ensure reciprocity in FATCA;
    293. Reiterates the proposals put forward in its resolution of 5 July 2018 on the adverse effects of FATCA on EU citizens and in particular ‘accidental Americans’, which calls on the Commission to take action to ensure that the fundamental rights of all citizens, in particular those of ‘accidental Americans’, are guaranteed;
    294. Calls on the Commission and the Council to present a joint EU approach to FATCA in order to adequately protect the rights of European citizens (particularly ‘accidental Americans’) and ensure reciprocity in the automatic exchange of information by the US, with the CRS being the preferred standard; calls on the Commission and Council, in the meantime, to consider countermeasures, such as a withholding tax, where appropriate, to ensure a level playing field if the US does not ensure reciprocity in the framework of FATCA;
    295. Calls on the Commission and the Member States to monitor new corporate tax provisions of countries that cooperate with the EU on the basis of an international agreement;

    https://www.europarl.europa.eu/cmsdata/161562/TAX3%20Final%20Report_A8-0170_2019_EN.pdf

  5. Disappointingly, it seems the paragraphs relating to FATCA were added as an amendment at a late stage.

    So, not part of a coherent effort to put pressure on the US over the reciprocity issue.

  6. “FATCA : données fiscales transmises par erreur aux Etats-Unis par une banque française”
    https://www.lemondedudroit.fr/pi-tic/300-protection-de-la-vie-privee/63397-fatca-donnees-fiscales-transmises-par-erreur-aux-etats-unis-par-une-banque-francaise-.html

    Une banque française ayant par erreur considéré l’un de ses clients comme étant natif des Etats-Unis est dans l’obligation d’effacer l’intégralité des données personnelles le concernant dans le cadre du FATCA et de faire toutes diligences auprès des autorités fiscales américaines afin qu’elles procèdent à l’effacement total des déclarations l’impliquant à tort, y compris pour les années antérieures à la régularisation.

    Paywall

  7. https://www.ebf.eu/wp-content/uploads/2019/02/EBF_035887-Practical-issues-in-complying-with-FATCA-request-for-relief.pdf
    Brussels,
    February 2019
    EBF_
    035887
    SUBJECT:
    Practical issues in complying with FATCA – request for relief
    The European Banking Federation (EBF)

    “……Since FATCA became effective in 2014, Financial Institutions have reached out to their
    customers with US indi
    cia and have encountered the following issues:
    •
    Some customers have not responded at all or the underlying bank account is
    dormant or inactive. Obviously, no Tax Identification Number (TIN) is available
    for these accounts as in many cases the indicia will
    either be a false positive or
    the indicia may be cured as the accountholder is not a US person.
    •
    Some customers have responded back that they cannot be considered as US
    Tax Payers evoking a number of reasons, including the fact that they left the
    US 50 year
    s ago and never went back or they were only born in the US and
    stayed for a few months
    / weeks only. This is the “accidental American”
    situation which has previously been acknowledged by the Treasury and IRS.
    These customers do not have a TIN and encounter
    difficulties and long delays
    in obtaining one only to renounce US citizenship subsequently.
    As a consequence, European banks are therefore faced with a dilemma:
    •
    Either to continue to provide financial services, including basic banking services
    (which is required by EU law)
    , to European citizens that also have a US indicium
    but have no US TIN; or
    •
    To stop doing so……..”…….

  10. https://americanexpatfinance.com/news/item/598-accidental-americans-take-us-state-dept-to-court
    ‘Accidental Americans’ take U.S. State Dept to court over ‘unconstitutional, illegal’ renunciation fee’

    December 9, 2020
    By Helen Burggraf

    https://americanexpatfinance.com/tax/item/605-eu-councils-kreienbaum-to-irs-commissioner-rettig

    ‘EU Council’s Kreienbaum, to IRS Commissioner Rettig: We need to talk about FATCA’

    December 17, 2020
    By Helen Burggraf

  11. https://time.com/5922972/accidental-americans-fatca/
    By Vivienne Walt
    Updated: December 23, 2020

    ‘Why ‘Accidental Americans’ Are Desperate to Give Up Their U.S. Citizenship’
    “……Now, lawsuits filed on both sides of the Atlantic are seeking to redress the situation. On Tuesday organizations representing Americans in Europe filed complaints against Luxembourg and Belgium’s governments, demanding they immediately stop transferring European citizens’ personal banking information to the U.S.—something they say violates strict European and national privacy laws. The complaints are a prelude to formal lawsuits in the courts.”……”

  13. See answer below to a *question posed by MEP Sophie in’t Veld
    https://www.europarl.europa.eu/doceo/document/E-9-2020-005165-ASW_EN.html
    Parliamentary questions
    21 January 2021
    E-005165/2020(ASW)
    Answer given by Mr Reynders
    on behalf of the European Commission
    Question reference: E-005165/2020

    The authorities that are responsible for monitoring and enforcing the application of the General Data Protection Regulation(1) ( GDPR) are the national data protection authorities.

    After these authorities came to the conclusion in 2018 that there had been no occasions where they ‘had to prohibit the processing and transfer of personal data to the US(2) under the FATCA(3) regime’(4) and following further exchanges with stakeholders, they are again looking into this issue at the level of the European Data Protection Board.

    The Commission participates in the meetings of the Board and closely follows any developments on this file.
    (1) https://eur-lex.europa.eu/eli/reg/2016/679/oj
    (2) United States.
    (3) United States Foreign Account Tax Compliance Act.
    (4) See the letter of the article 29 Working Party of 8 February 2018, available at https://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=614217
    Last updated: 22 January 2021

    *Q. posed by MEP in’t Veld;
    https://www.europarl.europa.eu/doceo/document/E-9-2020-005165_EN.html
    Parliamentary questions
    22 September 2020
    E-005165/2020
    Question for written answer E-005165/2020
    to the Commission
    Rule 138
    Sophia in ‘t Veld (Renew)

    Answer in writing
    Subject: Data transfers to the US in the framework of FATCA and the GDPR

    In order to comply with the US Foreign Account Tax Compliance Act (FATCA), implemented by bilateral intergovernmental agreements (IGAs) concluded between the EU Member States and the US, accidental Americans, who are EU citizens, have to transmit a social security number (SSN) to their bank under threat of closure of their bank account. In order to obtain this SSN, these people have to provide very sensitive data to the Federal Benefit Unit of US embassies, which are subsequently transferred to the US.

    1. Does the Commission consider this transfer of information to be in line with the General Data Protection Regulation (GDPR)?

    2. Does the Commission consider that this transfer of information is a direct consequence of the intergovernmental agreements concluded by the Member States to implement FATCA? What actions does the Commission undertake to protect the transfer of this information to the US?

    3. Will the Commission open infringement procedures against the Member States?
    Last updated: 9 October 2020

  16. https://www.europarl.europa.eu/doceo/document/E-9-2021-004907_EN.html

    Parliamentary questions
    PDF 39k WORD 9k
    27 October 2021
    E-004907/2021
    Question for written answer E-004907/2021
    to the Commission
    Rule 138
    Christophe Hansen (PPE)

    Subject: Revision of international agreements involving the transfer of personal data to third countries in connection with the US Foreign Account Tax Compliance Act (FATCA)

    FATCA provides for the automatic exchange of information between national tax authorities and the US tax authority. It often entails burdensome tax and banking obligations for US citizens living abroad, especially for ‘accidental Americans’.

    The act, which stems from bilateral agreements concluded by Member States and whose application is the responsibility of national data protection authorities, has been repeatedly criticised, in particular because it does not comply with personal data protection provisions such as Regulation (EU) 2016/679 and Directive (EU) 2016/68.

    In this connection:

    1. What is the state of play of European-level discussions on the possible implications of data protection rules for existing agreements on the exchange of information for tax purposes?

    2. Is the Commission in discussions with the US on possible amendments to FATCA?

    3. Does the Commission envisage concluding a new agreement with the US that would repeal FATCA and be placed under the responsibility of the European Data Protection Board?
    Original language of question: FR
    Last updated: 8 November 2021

  17. Yes I realize I’m splitting hairs here, but the claim that FATCA “often entails burdensome tax and banking obligations for US citizens living abroad” is both poorly written and not technically true. FATCA force no-one to file US tax returns.

  18. @Ron,

    FATCA did impose a new tax form to file together with enhancements to existing reporting, so I think it can be argued that it does indeed entail “burdensome tax obligations”. Of course it’s not clear that this is what is meant by that sentence, rather than the common incorrect assertion (as you point out) that it introduced a fundamentally new requirement to file taxes that didn’t exist before.

  19. https://www.europarl.europa.eu/doceo/document/E-9-2021-004907-ASW_EN.html
    Parliamentary questions
    11 January 2022
    E-004907/2021(ASW)
    Answer given by Mr Gentiloni
    on behalf of the European Commission
    Question reference: E-004907/2021

    The Commission has regular contacts with the United States (US) authorities on Foreign Account Tax Compliance Act (FATCA), notably in view of obtaining tangible improvements(1) in the situation of so-called ‘Accidental Americans’ concerned by the application of the bilateral agreements concluded by Member States.

    However, as the EU is not a party to these agreements, the Commission is not entitled to discuss or negotiate amendments to them with the US.

    Through the directive on Administrative Cooperation(2), the EU has implemented within its territory the internationally agreed Common Reporting Standard (CRS) for reporting of financial account information.

    Any possible negotiation on behalf of the EU with the US for replacing the existing bilateral FATCA agreements would require not only a unanimous Council Decision mandating the Commission to engage in such negotiations, but also the preparedness of the US to adhere to CRS in place of FATCA.

    As regards the monitoring and enforcement of EU data protection rules, these fall under the competence of national data protection authorities (DPAs) and courts.

    While the European Data Protection Board (EDPB) confirmed in the past that there had been no occasions where the DPAs ‘had to prohibit the processing and transfer of personal data to the US under the FATCA regime’(3) , they continued to assess the impact of such agreements on data protection rules, including as part of ongoing national investigations.

    This also includes advising and assisting the Member States in their assessment of international agreements concluded prior to the General Data Protection Regulation(4) to determine whether further alignment with EC law is needed(5).

    The Commission is in contact with the Member States and the EDPB on this file.
    (1) For instance, making easier obtaining a US Tax Identification Number from abroad and clarifying that individual accounts have not to be automatically closed by banks if that Number is missing.
    (2) Council Directive 2011/16/EU of 15 February 2011, as amended by Council Directive 2014/107/EU of 9 December 2014 and, lastly, by Council Directive (EU) 2021/514 of 22 March 2021.
    (3) Letter of the article 29 Working Party of 8 February 2018: https://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=614217
    (4) https://eur-lex.europa.eu/eli/reg/2016/679/oj
    (5) See the statement of the EDPB of 13 April 2021, available at https://edpb.europa.eu/our-work-tools/our-documents/other-guidance/statement-042021-international-agreements-including_en

  21. Interesting find from an open public consultation. FATCA was given as an example of coercive non-EU legislation;

    ‘Detailed results of the open public consultation
    on an EU anti-coercion instrument’

    “Introduction
    The open public consultation has been the central consultation activity in the impact
    assessment process for this initiative.1 It was open to all stakeholders and citizens and
    lasted for 12 weeks, starting on 23 March 2021 and closing on 15 June 2021. It was
    available via EUSurvey, in all EU official languages. The online questionnaire contained 32
    questions, with the possibility for open remarks for each question and for submitting a
    position paper. ”
    ………..
    ‘Q4 Evidence of non-EU countries’ legislation either specifically designed to
    impose coercive measures on other countries or that can be used for that.
    Evidence of unwritten measures or practices that are used for coercion.’

    …..”US Foreign Corrupt Practices Act (FCPA), Foreign Account Tax Compliance Act
    (FATCA), CLOUD Act and Dodd Franck Act as coercive extra-territorial sanctions”

    https://trade.ec.europa.eu/doclib/docs/2021/september/tradoc_159792.pdf

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