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. @plaxy, presumably Greens from Canada and those in the EU do share some information via the Gobal Greens https://www.globalgreens.org/member-parties . EU Green Sven Giegold was very pro-FATCA in 2013 http://www.sven-giegold.de/2013/briefing-fatca-and-data-protection/ , but perhaps he and other EU Greens might now see that Canada Green Party leader Elizabeth May’s early anti-FATCA position has proven to be the more correct one in terms of FATCA’s unjust impact on ordinary citizens and residents of non-US countries – particularly as the US has now demonstrated years of inaction on even the pretense of any intent towards reciprocity and FATCA as imposed in the EU has resulted not in catching big money laundering tax evading USresident whales, but in depriving ordinary EU residents of access to ordinary banking.

  2. As far as I know, this petition is not a party political issue. I wrote to my MEPs about my bank access problems a couple of years ago and received sympathetic responses, and one MEP gave me information about this petition, which at the time I wasn’t aware of. Definitely worthwhile for any EU citizen – especially, of course, any EU citizen having FATCA bank access problems – to write to their MEPs, regardless of party affiliations of the constituent or the MEP.

  3. the Commission would like to draw the attention of the Committee on Petitions to a letter sent on 8 May 2017 by the Maltese Presidency of the Council to the US Treasury, highlighting problems faced by residents, financial institutions and governments of the EU Member States in relation to FATCA, notably with regard to reporting data in the absence of a US tax identification or social security number.

    This is the issue I wrote to my MEPs about. Perhaps quite a few other EU citizens contacted their MEPs about the same issue? Because subsequently the President of the Council wrote to the US Treasury, and the EBF wrote to the IRS, and IRS regulations were changed so that banks were no longer at risk of withholding for not getting a SSN from a US-born customer.

    So I think it’s well worth the effort to write to one’s MEP and tell them about the petition and ask them to support it. The stronger the support, the more likely it may be that further changes may be agreed in future to reduce (hopefully to zero) FATCA-related bank access problems.

  5. There is an update from Jus de Fruit on the American Expatriates page concerning responses from a couple of MEPs.

  6. Interesting to see that as far back as 2013, the European Parliament was recording its reservations about FATCA:

    . Welcomes the US Foreign Account Tax compliance Act (FATCA) as a first step towards an automatic exchange of information between the EU and the US to fight trans-border tax fraud and tax evasion; regrets, however, that a bilateral/intergovernmental approach has been taken in the negotiations with the US rather than a common EU negotiating position; regrets the lack of full reciprocity in the exchange of information; calls for the respect of the rights of data protection for EU citizens in this context;

    The European Parliament…15. Welcomes the US Foreign Account Tax compliance Act (FATCA) as a first step towards an automatic exchange of information between the EU and the US to fight trans-border tax fraud and tax evasion; regrets, however, that a bilateral/intergovernmental approach has been taken in the negotiations with the US rather than a common EU negotiating position; regrets the lack of full reciprocity in the exchange of information; calls for the respect of the rights of data protection for EU citizens in this context;

    http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT%20REPORT%20A7-2013-0162%200%20DOC%20XML%20V0//EN

  8. Parliamentary questions
    4 April 2018
    E-001994-18
    Question for written answer
    to the Commission
    Rule 130
    Luke Ming Flanagan (GUE/NGL)

    Subject: US Foreign Account Tax Compliance Act (FATCA)

    “Given the reluctance on the part of the article 29 Working Party to take a view on the topic, the recent opinion of the ECJ as regards the Passenger Name Registry agreement concluded by the EU with Canada, recent decisions of the ECJ on data privacy and tax matters (M.N. and Others v. San Marino and BFB Villa-Nova v. Portugal), and the very serious consequences the Foreign Account Tax Compliance Act (FATCA) — a US extraterritorial law — is having inside the EU and on law-abiding EU citizens, can the Commission state whether it considers FATCA and its implementation by EU banks to be compatible with EC laws and EU sovereignty?

    In addition, can the Commission look into the situation of so-called ‘accidental Americans’ (revealed by FATCA) with a view to finding a fair and equitable solution for them, given that they are first and foremost EU citizens and it is the Commission’s duty to protect them?”
    http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=E-2018-001994&format=XML&language=EN

  9. Do the changes arising from the EU’s incoming (25 May 2018) GDPR have any implications for or impact on FATCA compliance by European banks? Or have all banks’ T&C documents already been revised to eliminate any potential benefit to individuals of GDPR?

  12. From a link posted on the American Expatriates FB page:

    “Irish ‘accidental Americans’ could be subject to US tax bills”

    “Brian Hayes, MEP, said that [FATCA] is having unintended and “deeply unsettling” effect on many Irish and EU citizens.

    “There are potentially thousands of accidental Americans in Ireland who could be subject to huge US tax bills and they don’t know about it. Because of our long-standing cultural and family ties with the United States, Ireland could be worse affected than many other countries in the EU,” he said.”

    https://www.irishtimes.com/business/personal-finance/irish-accidental-americans-could-be-subject-to-us-tax-bills-1.3480754?mode=amp

  13. “Post-Facebook fallout: Americans envy Europeans’ privacy – top EU data watchdog”
    https://www.theregister.co.uk/2018/05/02/facebook_saga_shows_us_cant_operate_in_splendid_isolation_says_top_eu_data_watchdog/

    “…the Facebook scandal could be described as a wake-up call. [US lawmakers] are now seriously discussing regulation and during Mark Zuckerberg’s mammoth Congressional hearings, politicians grilled him on plans to apply EU rules globally.

    The shift in attitudes has not gone unnoticed in Brussels. Giovanni Buttarelli, the European Data Protection Supervisor, said that on his most recent trip to DC, he could see the desire for stronger laws trickling down to the public.

    “By surprise, what I’ve found is that a lot of citizens – not just NGOs – now want to have stronger laws, because they see citizens have specific rights when an EU-based company uses their data, but they don’t have similar rights when a US company in the US uses their data,” he told The Register.
    …
    Excessive surveillance can be counterproductive, he said, for instance by damaging public trust, and there needs to a better understanding of “how to prevent generalised monitoring of all citizens”.

    This is particularly relevant when it comes to the transfer of data out of the EU – the bloc’s tighter rules on privacy mean that it wants to ensure data subjects get the same protections elsewhere.

    Most famously, this principle has been used by activist Max Schrems to bring down the Safe Harbor deal through his battle with Facebook over data transfers to the US.

    That’s now been replaced with Privacy Shield, which Buttarelli described as “acceptable in the short to mid-term”, but said that the EU still needs reassurances on a number of issues, such as the lack of safeguards against law enforcement bodies deciding they need routine access to commercial data,/b>….”

    Not to mention routine access to your baby’s savings data and your pitiful PFIC retirement plan.

  14. If this has not already been posted, here is another written question from Sophie in ‘t Veld:

    Subject: Holiday rental platforms required to hand over EU citizens’ tax information to US tax authority

    http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+E-2018-002127+0+DOC+XML+V0//EN&language=EN

    You could not make this stuff up. I am getting the impression that the Commission will be under incredible pressure to do something about EU citizens affected by US extraterritorial fiscal laws… sooner or later. This really cannot go on indefinitely; a recent written question from Luke Ming Flanagan hints the FATCA acrimony.

  16. This is from April, but don’t know if this was posted before?

    4 April 2018
    E-001994-18
    Question for written answer
    to the Commission
    Rule 130
    Luke Ming Flanagan (GUE/NGL)

    Subject: US Foreign Account Tax Compliance Act (FATCA)

    Given the reluctance on the part of the article 29 Working Party to take a view on the topic, the recent opinion of the ECJ as regards the Passenger Name Registry agreement concluded by the EU with Canada, recent decisions of the ECJ on data privacy and tax matters (M.N. and Others v. San Marino and BFB Villa-Nova v. Portugal), and the very serious consequences the Foreign Account Tax Compliance Act (FATCA) — a US extraterritorial law — is having inside the EU and on law-abiding EU citizens, can the Commission state whether it considers FATCA and its implementation by EU banks to be compatible with EC laws and EU sovereignty?

    In addition, can the Commission look into the situation of so-called ‘accidental Americans’ (revealed by FATCA) with a view to finding a fair and equitable solution for them, given that they are first and foremost EU citizens and it is the Commission’s duty to protect them?
    Last updated: 16 April 2018

  19. A recent EU Commission answer to a question by MEP in’t Veld;
    “Parliamentary questions
    3 May 2018
    E-000723/2018
    Reply

    “The new US tax reform, its potential impact and its compatibility with internationally recognised rules are currently being assessed within the Council. An assessment is also ongoing of the General Intangible Low Taxed Income (GILTI) scheme and the consequences it may have in particular on actors within the EU.

    As for the other aspects of your question, it is a principle of international law that the sovereignty of each state implies that it can freely define its taxpayers. Therefore, it is not for the Council to interpret the legal provisions concerning taxpayers in specific non-EU countries. With regard to bilateral tax treaties, it is not for the Council to interpret the legal provisions of international acts concluded by the Member States.
    Last updated: 8 May 2018”
    http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2018-000723&language=EN

    The commission is very eager in its answer above to refer to international law in rationalizing its support of state’sovereignty’ as sufficient justification for US extraterritorial claims to anyone in the world it deems to be a US taxpayer, – however broadly – including EU citizens and residents with no actual economic or actual residency relationship with the US. The commission does not note however that the US is an outlier in using citizenship, birthplace and parentage as proxy for actual residency or economic connection – and that it is the only country to claim people as taxpayers based solely on parentage/birthplace/citizenship – except Eritrea. Ironically, the EU does not appear to equally support Eritrea’s ‘sovereign’ extraterritorial ‘right’ to define its own taxpayers – when Eritrea trys to collect in EU countries. Is the commission supportive of Eritrea’ ‘sovereign’ right to freely define its taxpayer extraterritorialy, within the EU? Here is what the Commission said about the Eritrean extraterritorial tax;
    “…3.6 Resolution of the European Parliament
    In the European Parliament, parliamentary questions have been asked about the 2% Tax and other related topics, including the granting of EU aid to Eritrea (European Parliament, 2016b). The European Parliament has described the 2% Tax as undesirable and illegal, identifying it as tool for the Eritrean government to control and coerce members of the diaspora in foreign countries as a form of intelligence gathering. The European Parliament resolution states that: whereas the regime extends its totalitarian grip to the Eritrean diaspora, extorting funds from its members via a 2% Tax on expatriate incomes, spying on them and targeting family members who have remained in Eritrea on the grounds of perceived wrongdoing. (European Parliament, 2016a preamble)…”
    (Source: ‘The 2% Tax for Eritreans in the diaspora
    Facts, figures and experiences in seven European countries
    DSP-groep Amsterdam, Tilburg School of Humanities, Department of Culture Studies’)
    https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/rapporten/2017/09/18/the-2-pct-tax-for-eritreans-in-the-diaspora/the-2-pct-tax-for-eritreans-in-the-diaspora.pdf

    MEP in’t Veld’s question was;
    Parliamentary questions
    6 February 2018
    E-000723-18
    Question for written answer
    to the Council
    Rule 130
    Sophia in ‘t Veld (ALDE) , Thierry Cornillet (ALDE)

    Subject: US tax reform affecting EU citizens and SMEs
    Answer(s)

    “Along with Eritrea, the United States is one of two countries worldwide that uses a citizen-based taxation system. Non-resident US citizens and ‘US persons’ are obliged to file a US tax return and are subject to various cumbersome reporting requirements. This affects many EU citizens with dual nationality, such as ‘Accidental Americans’. The US Government has stepped up enforcement in recent years, putting pressure on US citizens and US persons abroad, with FATCA, for example, increasingly resulting in EU citizens being excluded from basic banking services. The new US GILTI tax is a heavy administrative and financial burden on European SMEs, and could possibly even lead to bankruptcies, while the length and cost of the procedure to renounce US citizenship is prohibitive for many.

    1) What diplomatic and legislative action does the Council intend to take to protect the interests of EU citizens and SMEs against citizen-based taxation by the US and Eritrea?

    2) Though taxation is a purely national competence, does the Council consider a joint EU approach is needed to adequately protect the rights and interests of European citizens and SMEs?

    3) Will the Council conduct a full analysis of the impact on EU citizens and SMEs?
    Last updated: 22 February 2018”
    http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=E-2018-000723&format=XML&language=EN

  20. “it is the only country to claim people as taxpayers based solely on parentage/birthplace/citizenship ”

    Important to emphasise that the US does not and cannot claim the non-US-born child of a US citizen as a US taxpayer based solely on parentage.

    The child may or may not have a claim to US citizenship; if the child never applies (providing documentary proof), the child is not a US citizen.

    The US also can’t claim people as taxpayers based solely on birthplace. Once you renounce you’re free.

    Banks may still treat your account as reportable to the IRS, which is outrageous, but that’s an outrage committed by the bank, aided by the local government. It’s not because the IRS can claim people as taxpayers based solely on birthplace – they can’t do that.

    (A former citizen can however volunteer to pay the Exit Tax in order to “exit cleanly.”)

  21. @plaxy

    “The child may or may not have a claim to US citizenship; if the child never applies (providing documentary proof), the child is not a US citizen.”

    What if the then child, now young adult’s parents registered their birth at a US embassy 17 years ago. Is US able claim them as a US citizen even though they themselves never applied for US citizenship? Or does the young adult have to apply for citizenship at the age of 18, if they so wish?

  22. Uncle Tell: A child who has been registered at a US Embassy has made a successful claim and is a US citizen. But s/he can simply ignore the citizenship and never make use of it.

    It’s only us US-born that need to renounce, in order to obtain proof that we’re no longer US citizens.

  23. Uncle Tell, An adult who was registered has a claim. He or she doesn’t need to exercise that claim. If they don’t, there is no problem. My children exercised the claim in order to go to graduate school in th the US One is back in Canada and preparing to renounce . The other married and stayed in the US.

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