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”

  4. Eric – yes – they’ve been seeking plaintiffs for a while (posted somewhere upthread). Now someone has stepped forward.

    Fingers crossed.

  6. It appears Sophie in’t Veld has more balls than 98.7% of american, canadian, and european “men.”

  7. Balls aren’t necessary for an MEP to raise issues in the EU Parliament. No risk is involved. The Parliament, having little power to act, is free to speak.

    Ms in’t Veld has persistence and competence and determination, and knows how to deploy them effectively. More relevant qualities than testicles, in the europarl context.

  8. ‘ German Greens MEP Sven Giegold says that lack of effective action by the US is “damaging the global fight against financial and tax crimes.” ’

    Giegold is a member of a parliamentary delegation which has just concluded a fact finding trip to Washington on what the US is doing to combat financial crime.

    The delegation from the economic and monetary affairs committee was in Washington and New York to meet representatives from the US Treasury, the Institute of International Bankers (IIB) and the Federal Reserve Board (FRB).

    During the three-day trip, which ended on Wednesday, the delegation also discussed transatlantic relations, developments in the field of financial market regulations and taxation, the impact of the US tax reform on financial institutions and regulatory challenges for foreign banks in the US.
    …
    “It is disappointing that it is still possible to open de facto anonymous bank accounts in many US states (see our study below) damaging the global fight against financial and tax crimes.”

    https://www.theparliamentmagazine.eu/articles/news/sven-giegold-global-tax-cooperation-remains-crucial

    The study referred to is from 2016; see https://www.greens-efa.eu/en/article/the-role-of-the-united-states-as-a-tax-haven/

  10. As the Commission pointed out in its answer to Written Question E-001994/2018, discrimination against consumers legally residing in the EU — and qualifying as ‘United States (US) persons’ — would be in breach of the Payment Accounts Directive (PAD).

    The Commission also stated that complaints about breaches of the laws transposing PAD must be addressed to the national competent authorities. Should those authorities systematically fail to enforce the rights established by the directive, the Commission will decide on appropriate measures, including launching infringement procedures.

    The Commission also noted that national data protection authorities (DPAs) so far have not prohibited the processing, including the transfer, of personal data of EU individuals to the US under the Foreign Account Tax Compliance (FATCA) regime. The Commission was informed that DPAs are considering whether there is a need to launch a fact-finding exercise to further clarify the situation in the Member States.

    Concerning the status of FATCA reciprocity, the Commission notes that FATCA is implemented within the EU through Intergovernmental Agreements (IGAs) concluded by Member States with the US. As the EU is not a party to those agreements, the assessment requested to the Commission in the European Parliament’s Resolution will have to be based on publicly available information on the respective obligations of each Member State and the US under those agreements.

    The Commission will inform the European Parliament and the Council on the outcome of its factual assessment.

    However, given the absence of EU involvement in the IGAs signed by the Member States, information over compliance by the United States with its obligations, including reciprocal data flows, under those IGAs can only be provided by the Member States.

    Doesn’t seem to me to be an “excuse”. It’s a fact that the Commission can’t do anything about Member States’ bilateral IGAs.

    The wording of the reply suggests the Commission has been unable to so much as get the Member States to provide information on how much information they’re getting back from America. (Information which would be highly relevant not only to the assessment requested by the anti-FATCA resolution adopted by Parliament, but also to the “non-reciprocal” complaint which the Commission has raised with the OECD.

    The countries are not playing ball. As expected.

  11. @plaxy

    “Doesn’t seem to me to be an ‘excuse’.”

    Alright, I will replace “excuse” with “choral refrain” …

    We are told repeatedly that taxation always falls within the competence of the Member States and not the EU Institutions. However, the EU Commission had no qualms meddling in Irish tax issues with respect to Apple in 2016 (perhaps because it was deemed state aid?). In any case, the EU Commission can put pressure on Member States to do something about FATCA. Obviously, it is neither their priority nor in their best interest.

  12. “the EU Commission had no qualms meddling in Irish tax issues with respect to Apple in 2016 (perhaps because it was deemed state aid?)”

    Yes, as I recall it was about state aid. Tax is indeed a MS competency, though I don’t think there’s any doubt the Commission would like to make some changes to that situation.

    “the EU Commission can put pressure on Member States to do something about FATCA.”

    How?

    “Obviously, it is neither their priority nor in their best interest.”

    It’s my impression that the Commission would like to use the reciprocity issue as a lever in its talks with the US over the effects of the US tax reform bill; but I agree the Commission has no wish to get rid of FATCA. I definitely think the Commission would like to negotiate an EU-wide IGA to replace the bilateral IGAs. I don’t for a minute think that USCs would like it any better than the status quo.

  13. @plaxy

    “How?”

    Take legal action because of discrimination? Or breach of data privacy? If there is the determination to right a wrong, the Commission would have taken the moral high ground and done something about it. But as I said yesterday, it is obviously neither their priority nor in their best interest.

    “I don’t for a minute think that USCs would like it any better than the status quo.”

    I cannot disagree. Unless the EU Commission somehow manages to renegotiate FATCA with an exclusion for US-born EU citizens or a cost-free, penalty-free renunciation mechanism, there would be no point to revisit the matter. Reciprocity was dubious from the start, and the Yankees could care less about honouring this.

  14. “Take legal action because of discrimination? Or breach of data privacy? ”

    Indeed. Because the IGAs are national agreements, the victim of the discrimination / privacy breach has to bring the case, at national level. The Commission can’t do it.

    “If there is the determination to right a wrong, the Commission would have taken the moral high ground and done something about it.”

    You think? I think the MHG is generally hauled out for political ends, not for the righting of wrongs. It’s not the Commission’s rôle to decide if there’s a wrong to be righted, though the Commission does have a duty to respond if there is evidence that an EU law (such as PAD) is being broken. If eventually a case gets as far as the ECJ, it’ll be the court that rules on the question of whether national law is resulting in a wrong such as discrimination or breach of privacy rights.

    “Reciprocity was dubious from the start, and the Yankees could care less about honouring this.”

    Indeed, to both points.

  15. @plaxy

    “It’s not the Commission’s rôle to decide if there’s a wrong to be righted, though the Commission does have a duty to respond if there is evidence that an EU law (such as PAD) is being broken.”

    But the Commission did take action against Apple in the Irish tax case in 2016 to right a wrong, no? I cannot see what is stopping them to take whatever action necessary to right several wrongs resulting from FATCA.

    This is all wishful thinking on my part. At the end of the day, as an average European citizen, I have to put up with this crap unless 2.350$ emerges from somewhere…

  16. As I understand it, the Commission launched an investigation into whether Ireland’s lures to Apple amounted to illegal state aid, concluded that it did, and ordered Ireland to recover the aid through taxation. Ireland refused, and the EU referred the case to the ECJ.

    In the case of FATCA, the Commission has taken the view (correctly, as far as I can see) that the IGAs don’t breach EU laws. That’s the difference, it seems to me. I don’t think it’s surprising: GDPR specifically allows derogation in tax matters, and PAD only requires access to a basic bank account. The laws are designed not to get in the way of policy goals, such as AEOI.

    I’m optimistic that the French case may succeed. If not, there’s also a CRS case in the works. It seems to me (amateur) the situation is unstable, and may not last as it is. Many rich people don’t like it.

  17. Another thought: repeal of FATCA is also a possibility, after the current bout of American electioneering is over.

    The Americans have managed to heap up FATCA, the retroactive forced-deemed-repatriation tax, and GILTI on the heads of the US dual citizens, creating a triple whammy of incentives for the most successful (the ones worth taxing) to renounce US citizenship.

    Something might get done, in the next session, to address this. Or not.

    Alternatively, if the US Congress sets up an (optional) alternative tax regime for non-US-resident USCs, as is currently apparently being considered, that could be a real boon for some EU USCs, as it would be logical to stop treating accounts in the residence jurisdiction as reportable.

    Just have to wait and see.

  18. I said:

    if the US Congress sets up an (optional) alternative tax regime for non-US-resident USCs, as is currently apparently being considered, that could be a real boon for some EU USCs, as it would be logical to stop treating accounts in the residence jurisdiction as reportable.

    From a twitter exchange yesterday (https://mobile.twitter.com/SolomonYue/status/1045596500712148992), it sounds as if this will not be the case. If the bill under discussion were to be enacted, the IRS might have no interest in tracking foreign assets of USCs registered as officially permitted not to file US tax returns, but there is no suggestion that FFIs would be required or allowed to treat the accounts of registered non-filers as non-reportable.

    So – essentially, unless the Americans repeal FATCA altogether, or one of the European legal cases gets to the ECJ and gets a successful ruling on the birthplace discrimination issue, I can’t see any solution other than the CLN. I may be wrong, and I hope I am.

  20. “The key benefit of the Common Reporting Standard lies in its reciprocity. To achieve equivalent levels of reciprocal information exchange with the EU Member States, the United States have made a political commitment to implement it, as expressed in the pre-amble of FATCA intergovernmental agreements.”

    So they have.

    The MEP didn’t ask any question to which this statement could possibly be the answer.

    I do hope the add-on is there for a purpose – e.g. to float the thought that if the US isn’t keeping its word with regard to reciprocity, the Member States should each withdraw from their Agreement as expressly provided for in the Model.

  21. Been listening to the radio news. In between the deluge of items on Brexit and/or the US ‘mid-term elections’ there are occasional murmurs on other topics. I caught a fragment about a 1996 EU Regulation 2771/96 that aimed to ““protect[ ] against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom.”

    Hmmm… sounds eerily resonant, doesn’t it?

    It seems to pertain principally to nuclear issues relating to Iran, Cuba etc, but also relates to financial services.

    I am not a lawyer, but here are a few links, in case somebody can pick this up and run with it…

    I hope pasting these links works…

    https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A31996R2271

    https://www.ukfinance.org.uk/wp-content/uploads/2018/07/UK-Finance-paper-EU-Blocking-Regulation-11-July-2018-FINAL.pdf

    http://www.mondaq.com/uk/x/729368/Export+controls+Trade+Investment+Sanctions/The+Updated+EU+Blocking+Statute+A+Shield+From+US+Sanctions

    https://www.steptoeinternationalcomplianceblog.com/2017/10/eu-raises-specter-of-blocking-regulation-as-trump-administration-ponders-jcpoa/

  22. Thanks for that @Duality.

    re;
    “………to achieve equivalent levels of reciprocal information exchange with the EU Member States, the United States have made a political commitment to implement it, as expressed in the pre-amble of FATCA intergovernmental agreements.”
    http://www.europarl.europa.eu/doceo/document/E-8-2018-003785-ASW_EN.html?redirect

    That Ms Jourová (on behalf of the European Commission) is able to actually utter and repeat such empty nonsense to EU residents this far down the years into FATCA is astounding. The US ‘political commitment’ to reciprocity is even less believable and even more of a clear fiction now than at the time it was invented in order to sell to restive populations in FATCA IGA signatory countries, and it is no less imaginary and impossible a thing now.

    Unless of course you’re the White Queen from ‘Through the Looking-Glass’;
    “”……… Alice laughed: “There’s no use trying,” she said; “one can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast……”

    Quotations by Dodgson
    www-history.mcs.st-andrews.ac.uk/Quotations/Dodgson.html

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