FATCA and the EU

540 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

3. The TAX3 report has been adopted by the European Parliament’s March Plenary Meeting.

   The text as adopted can be downloaded at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+P8-TA-2019-0240+0+DOC+PDF+V0//EN

4. “…505 votes in favour, 63 against and 87 abstentions…”

   http://www.europarl.europa.eu/news/en/press-room/20190321IPR32109/tax-crimes-meps-want-eu-financial-police-force-and-financial-intelligence-unit

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……..”…….

8. Hello all,

   An update from the European front:

   Dutch EU parliamentarian writes to Moscovici:
   https://www.americanexpatfinance.com/news/item/149-accidental-americans-latest-dutch-eu-parliamentarian-writes-to-moscovici

   And a recent tweet from Sophie in ‘t Veld:
   https://twitter.com/sophieintveld/status/1114196760996536320?s=21

9. Hello,

   Last week, the European Parliament’s PETI Committee held a follow-up public hearing on FATCA and its extraterritorial impact on EU citizens. If anyone interested has missed the hearing, it can be followed at the following link (from 10:33:00 through to 12:28:00)…

   https://www.europarl.europa.eu/ep-live/en/committees/video?event=20191112-0900-COMMITTEE-PETI

   Regards

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.”……”

12. These governments are really, desperately wishing this would just go away. But it’s not.

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

14. See #12
    https://www.europarl.europa.eu/doceo/document/TA-9-2021-0022_EN.html

15. Further to the above.

    https://americanexpatfinance.com/tax/item/632-eu-data-protection-board-to-revisit-fatca-data-protection-issues-justice-commissioner-reynders
    EU Data Protection Board to revisit FATCA data protection issues: Justice Commissioner Reynders

    January 25, 2021
    By Helen Burggraf