546 thoughts on “FATCA and the EU”

1. OK George. Here’s my translation, but I warn you I’m no professional translator. The article is however, very encouraging, although as I asked Duality, I’m not sure how high up in the French Government this is occurring. I don’t know how to put my part in the highlighted box as is usually done on this site, so if any admin wants to, feel free.

   Link to original article as posted by @Duality:

   http://www2.assemblee-nationale.fr/14/missions-d-information/missions-d-information-communes/mission-d-information-commune-sur-l-extraterritorialite-de-la-legislation-americaine/a-la-une/reunion-constitutive-du-mercredi-2-mars-2016

   My amateur translation:

   Founding Meeting of Wednesday 2 March, 2016
   Contents of the Article:

   The Foreign Affairs Commission as well as the Finance Commission of the National Assembly have decided to set up a joint information gathering mission regarding the extraterritoriality of certain laws of the USA. Their first meeting was on Wednesday, March 2, 2016. The president of this mission is Mr. Pierre Lellouche (Republicain, Paris) and the spokesperson is Mrs. Karine Berger (Socialiste and républicaine, Hautes-Alpes).

   Many recent events have brought to light the tendency of American courts and administrations to take actions against foreign people or foreign “values/customs” for things that occurred outside of American territory, such as the record-setting fine paid by voluntarily by one of our large banks to the American administration (for not having respected an American embargo), American lawsuits against executives of Alstom for corruption… AND THE CLAIMING BACK BY THE IRS OF FRENCH LVING IN FRANCE BUT BORN IN THE USA, THEREFORE “ACCCIDENTAL AMERICANS” OR THOSE ACCUSED AS SUCH WHO ARE NOW SUBJECT TO US TAXATION. (emphasis mine – PierreD).

   Relying on submissions from people from all walks of life, the commission aims to define “extraterritoriality” ; will try to extensively identify cases of the US’s extraterritorial application of it’s laws, and to analyze the consequences thereof, notably the damages caused to OUR businesses due to the competitive disadvantages they face as a result, AS WELL AS TO STUDY MEANS BY WHICH WE CAN COUNTER THESE TYPES OF PRACTICES AT BOTH THE NATIONAL AND EUROPEAN LEVEL.

   The commission hopes that this effort will provide recommendations for concrete action. The long standing and deep friendship between the USA and France cannot justify their claim to force their laws upon those well beyond their territory.

2. @PierreD

   Merci pour votre traduction. Je l’ai lue avec optimisme 🙂

   I think the fact that this meeting has even taken place is a significant step forward towards recognising the problems brought about by American extraterritoriality. I am aware that Pierre Moscovici (the EU Commissioner for Finance) has taken a neutral stance on FATCA, given his responses to questions raised by Sophie in ‘t Veld. In any case, time will tell how this will turn out.

3. This 23-page PDF has been leaked, but should be released today: The-US-as-a-tax-haven-Implications-for-Europe.

4. @seniorexpat

   The irony is that this report comes from the website of Sven Giegold who wholeheartedly sanctifies citizenship-based taxation as well as the Fatca project. For me, he is just another Fiscal Demon.

5. Related to senior expat’s comment above, from an email today,

    

   Dear All (on May 11th 2016),

   … which supports my view that European retaliation against America is a real likelihood — potentially now starting with putting the US on Europe’s Blacklist of Un-Cooperative Tax Havens.

   The headline of http://www.irishtimes.com/business/economy/us-should-be-added-to-tax-haven-blacklist-says-eu-report-1.2642686 says

   If this happens, then the EU Parliament’s passage of Mini-FATCA (with punitive 35% With-Holding against US Financial Firms) probably won’t be far behind.

   The Irish Times writer here is Suzanne Lynch Strasbourg (EU Parliament Headquarters) — so it defenitely has credence to me, and I’ve copied its full text for you, as follows:

    

   US should be added to tax haven blacklist, says EU report

   Tensions between the EU and the US over tax follow investigations into Apple in Ireland

   about 22 hours ago

   Suzanne Lynch Strasbourg

   European Parliament building in Strasbourg, France: The report commissioned by the parliament’s Green group argues that certain US states “behave like tax havens” by not obliging financial institutions to provide information on the beneficial owners behind firms, allowing for the creation of shell companies.

    

   The US should be added to a new European blacklist of tax havens being drawn up by the European Commission, according to a report commissioned by the Green group in the European Parliament.

   The report, which is being published today ahead of a visit by the European Parliament’s special committee on taxation to Washington next week, is the latest sign of tensions between the EU and the US over taxation.

   Noting that the US is a major financial centre, controlling around 20 per cent of the global market share of financial services for non-residents, the report claims that the availability of anonymous companies is widespread in at least 14 states.

   The report argues that certain US states “behave like tax havens” by not obliging banks or other financial institutions to provide information on the beneficial owners behind companies and trusts, allowing for the creation of shell companies. Delaware, Nevada and Wyoming are among the states mentioned in the report.

   It also criticises the US decision to implement its own FACTA (Foreign Account Tax Compliance Act) legislation rather than sign up to the OECD standards on the automatic exchange of tax information, which it believes allows the US to receive more information than it sends.

   Tensions between Washington and Brussels over the perceived EU clamp-down on the tax affairs of US multinationals have intensified following the opening of European Commission antitrust investigations against US companies including Apple’s dealings with Ireland in recent years.

   Clampdown

   Countries who have found themselves at the receiving end of the EU’s clampdown on aggressive corporate tax planning, including Ireland, have long argued that the US’ own tax system is part of the problem.

   British MEP Molly Scott said the report shows that the US “fails to live up to the standards of global reporting that it requires of others . . .The evidence points to the US becoming one of the largest tax havens and the EU should not stand by and accept this.”

   EU finance ministers are due to discuss a proposed common blacklist of tax havens at their next scheduled ecofin meeting in Brussels later this month. Previous attempts by the Commission to propose such a scheme have met resistance but the proposal has been given renewed impetus by the Panama Papers scandal which revealed how a global network made use of tax havens to hide their wealth.

   Tax returns to the agenda at the European Parliament today when MEPs are due to debate new EU rules on the automatic exchange of information on tax.

   On Thursday, senior officials in the parliament will decide on whether to set up a new committee of inquiry following the Panama Papers revelation.

6. How does/will this interact with FATCA in EU countries?
   http://www.out-law.com/en/articles/2016/may/privacy-shield-yet-to-receive-endorsement-by-eu-countries-representatives/
   “Privacy Shield yet to receive endorsement by EU countries’ representatives’

   “A proposed new framework for facilitating the transfer of personal data between the EU and US has still to be endorsed by a data protection committee containing representatives from the national governments of EU countries.”…….

   20 May 2016 “

7. @badger

   “How does/will this interact with FATCA in EU countries?”

   http://www.bbc.co.uk/news/technology-36414264

   Eurocrats love to think in non sequiturs: If both Safe Harbour and Privacy Shield are dead, then Fatca must live on. (Are we affected Europeans exasperated by this logic?)

8. thanks for that link @Duality.

   The ‘safeguards’ are more arrogant deeply disingenuous US BS of the very same order as before. They continue to offer it post-Snowden and they know it is still shite, and so does the EU, and for economic and political reasons, the shite will eventually be sold to EU citizens. And despite seeing the EU objections, and knowing full well that the US is a lying devious backstabbing manipulator, Canada doesn’t even bother to put up any meaningful resistance on these issues – just capitulates.

   ex. US shite:

   “….In February 2016, the EU and US agreed a new pact to make it easy for organisations to transfer data across the Atlantic.

   Key points of the agreement are:

   The US will create an ombudsman to handle complaints from EU citizens about the Americans spying on their data
   The US Office of the Director of National Intelligence will give written commitments that Europeans’ personal data will not be subject to mass surveillance
   The EU and US will conduct an annual review to check the new system is working properly
   ….”….

9. @badger

   “The US will create an ombudsman to handle complaints from EU citizens about the Americans spying on their data”

   I would like to entertain the thought that an Ombudsman will be appointed to handle complaints from EU citizens about the Americans spying on their financial data by way of Fatca. The office, however, will most likely be based at the IRS (= International Racketeering Service) …

10. @Duality, who would rationally entrust the fox to hear the complaints of the chickens? Note that those EU citizens would be directed to the US but no description of any recourse or redress mechanism exists in FATCA. And how would the EU citizens come to know of the spying anyway? Here in Canada the CRA (Canada Revenue Agency) refers people to their FIs and the FIs refer them to the CRA re even whether their data has been sent in the FATCA dump to the IRS. The CRA tells people that they rely on good faith that the US will keep its end of the agreement re the uses and dissemination of the data. All BS of the first order.

11. Latest FATCA questions tabled in writing to the EU by MEP Sophie in’t Veld;

    12 jul 16
    Parliamentary Questions: FATCA
    Member of the European Parliament Sophie in ‘t Veld (ALDE/D66) has tabled written questions to the European Commission about FATCA. You can read the questions here:
    http://www.sophieintveld.eu/parliamentary-questions-fatca/

    MEP Veld raises questions on the issues of US lack of reciprocity, congruence with EU Charter of Rights (see ex. below), access to banking, etc.

    See EU Charter, for ex.;
    http://ec.europa.eu/justice/fundamental-rights/charter/index_en.htm
    TITLE III
    EQUALITY
    Article 20
    Equality before the law

    Everyone is equal before the law.

    Article 21

    Non-discrimination

    1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.

    2. Within the scope of application of the Treaties and without prejudice to any of their specific provisions, any discrimination on grounds of nationality shall be prohibited.

12. EU MEP Sophie in’t Veld tabled written Parliamentary questions to the EU Parliament http://www.sophieintveld.eu/parliamentary-questions-fatca/ re US lack of reciprocity (see Article 6 of Model 1 IGA Canada/US Agreement Between the Government of the United States of America and the Government of
    Canada to Improve International Tax Compliance through Enhanced Exchange of Information
    under the Convention Between the United States of America and Canada with Respect to Taxes on
    Income and on Capital) under FATCA, shouldn’t Canada and all other IGA Model 1 signatories be questioning this also, “prior to December 31, 2016” as per Article 6, and Article 10 (see excerpt below)?

    I refer to:

    “Article 6
    Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange
    and Transparency
    1.
    Reciprocity. The Government of the United States acknowledges the need to achieve
    equivalent levels of reciprocal automatic information exchange with Canada. The
    Government of the United States is committed to further improve transparency and
    enhance the exchange relationship with Canada by pursuing the adoption of regulations
    and advocating and supporting relevant legislation to achieve such equivalent levels of
    reciprocal automatic information exchange………..

    AND,

    “Article 10
    Term of Agreement
    ………..
    3.
    The Parties shall, prior to December 31, 2016, consult in good faith to amend this
    Agreement as necessary to reflect progress on the commitments set forth in Article 6 of
    this Agreement”

13. A method of searching for questions put to the EU Parliament, such as the lastest one put to it in writing, by MEP Sophie in’t Veld:

    For example, searching for FATCA as a keyword in the text of questions:
    http://www.europarl.europa.eu/plenary/en/parliamentary-questions.html#sidesForm
    or,
    A search for FATCA as a keyword in the title of the questions:
    http://www.europarl.europa.eu/plenary/en/parliamentary-questions.html#sidesForm

    You can sign up to receive the answer (via email or RSS feed) to specific questions as they become available. Also, if you click on the question, if it has been answered, a small answer icon is clickable on the upper right side of the question box, and will lead to the answer text.

    Here are the rules about the time periods for answers;
    http://www.europarl.europa.eu/sides/getLastRules.do?language=EN&reference=RULE-130

14. DATE: 11 May 2016
    A STUDY COMMISSIONED BY THE
    GREENS/EFA GROUP IN THE
    EUROPEAN PARLIAMENT
    http://WWW.GREENS-EFA.EU
    @GREENSEP
    http://WWW.FACEBOOK.COM/GREENSEFA/

    http://www.greens-efa.eu/fileadmin/dam/Documents/TAXE_committee/The_US_as_a_tax_haven_Implications_for_Europe_11_May_FINAL.pdf

    ‘THE ROLE OF THE U.S. AS A TAX HAVEN
    IMPLICATIONS FOR EUROPE’

    .”………” ………..NEITHER GLOBAL NOR RECIPROCAL AUTOMATIC EXCHANGE OF BANK ACCOUNT INFORMATION
    The U.S. has refused to join the trend for multilateral automatic exchange of information. Instead, it will
    implement its domestic law called the Foreign Account Tax Compliance Act (FATCA) and the related Inter-
    Governmental Agreements signed with other countries. However, these involve unequal exchanges of
    information: the U.S. receives more information than what it sends (for example, about beneficial ownership
    data). Oddly, though, the OECD did not include the U.S. among jurisdictions that did not commit to its new standard.
    Even if the U.S. committed to exchange equal levels of information in the future, the current U.S. legal
    framework does not allow its financial institutions to collect beneficial ownership information for all relevant cases covered by the OECD’s global automatic exchange of information standard. U.S. financial institutions are currently only required to obtain information on beneficial owners for correspondent banking (i.e. accounts held for foreign financial institutions) and for private banking of non-U.S. clients (accounts holding more than USD 1 million)….”…………

    …………”……..the European Union should consider including the U.S. in the upcoming list of
    tax havens, unless it effectively ensures registration of beneficial ownership information for companies and
    commits to equal levels of automatic exchange of information with European Union countries.”………

    DATE: 11 May 2016
    A STUDY COMMISSIONED BY THE
    GREENS/EFA GROUP IN THE
    EUROPEAN PARLIAMENT
    http://WWW.GREENS-EFA.EU
    @GREENSEP
    http://WWW.FACEBOOK.COM/GREENSEFA/

15. MEP Sophie in’t Veld tells it like it is re FATCA:
    “US very loud abt EU being out of bounds in Apple case, very quiet on extraterritorial impact of #FATCA”
    https://twitter.com/SophieintVeld/status/770897743569117185

16. See latest from MEP in’t Veld of EU Parliament;
    https://twitter.com/SophieintVeld/status/777080742010650624
    Answer from EU to her latest written questions re FATCA and reciprocity and data security:

    http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+E-2016-005680+0+DOC+XML+V0//EN&language=en
    “EN E-005680/2016
    Answer given by Mr Moscovici on behalf of the Commission (16.9.2016)
    FATCA and the related IGAs are bilateral agreements between the US and other countries, including Member States, and are not directly within the competence of the Commission. However, the automatic exchange of information can only be effective in fighting tax fraud and evasion and preserving the level playing field if implemented on a global scale. The Commission is therefore currently working in international fora – Organisation for Economic Co-operation and Development, Global Forum and G20 – to promote its global reach and ensure that the agreements, including the IGAs, on automatic exchange of financial account information meet the highest transparency standards and are fully reciprocal.

    The Payment Account Directive (Directive 2014/92/EU ) obliges Member States to ensure that credit institutions do not discriminate against consumers based on their nationality, or place of residence or by reason of any other ground as referred to in Article 21 of the Charter in the provision of payment accounts under Article 15. Besides, the Directive also establishes a right of access to a payment account with basic features for all consumers legally resident in the Union in its Article 16. In each Member State, payment accounts with basic features shall be offered to consumers by all credit institutions or a sufficient number of credit institutions to guarantee access thereto for all consumers in their territory, and to prevent distortions of competition.

    Following the expiry of the deadline for the transposition of the Directive (September 2016), the Commission will assess how the Directive’s provisions, including the ones mentioned above, have been transposed in all Member States, and will not hesitate to initiate infringement proceedings in case of non- or incorrect transposition. “

17. Note that the EU Commission’s NON-response (see as quoted above, from http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+E-2016-005680+0+DOC+XML+V0//EN&language=en ) willfully ducked the substance and intent of MEP in’t Veld’s questions (see below);
    ” Subject: FATCA (Foreign Account Tax Compliance Act)
    Answer(s)

    In 2015, the Commission stated in an answer to a question that it ‘supports full reciprocity in information exchange between tax authorities’ and stressed the USA’s commitment to reciprocal automatic exchanges of information with its FATCA partners(1). The Congress has not yet adopted legislation to this end and the US authorities do not provide an equivalent level of reciprocity under intergovernmental agreements (IGAs)(2).
    Given the recent parliamentary debates in France, Italy and the Netherlands on the bilateral IGAs on FATCA, and in particular the negative impact of the extraterritorial application of third countries’ law on EU soil, the disproportionate effect of FATCA on EU citizens (‘Accidental Americans’) and the discriminatory treatment they are facing:
    1. what action will the Commission take to persuade the US Government to ensure reciprocity without further delay?
    2. does the Commission consider that the refusal of ‘Accidental Americans’ by banks is a violation of the Payment Accounts Directive and of the Charter of Fundamental Rights?
    3. what action will the Commission take to remedy the situation for the EU citizens affected?

    (1) http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2015-012237&language=EN
    (2) https://www.whitehouse.gov/blog/2016/05/06/president-obamas-efforts-promote-financial-transparency-and-combat-corruption-what “

18. Mr Moscovici is an utter waste of time and tax money. Fatca requires blatant discrimination by birth, so why isn’t the Commissioner addressing this as a matter of urgency? No wonder an increasing number of Europeans nowadays are voting right-wing parties into power so as to protest against all that incompetence at Brussels. I do not blame them at all…

19. Don’t know where to post this Interesting new paper which mentions FATCA, taxation and privacy and data protection, and human rights – particularly in the EU context. Might be something there useful for a challenge in the EU;
    Avi-Yonah, Reuven S. and Mazzoni, Gianluca, Taxation and Human Rights: A Delicate Balance (September 5, 2016). Available at SSRN: http://ssrn.com/abstract=2834883 or http://dx.doi.org/10.2139/ssrn.2834883
    fulltext available at the link.

20. 2 years after being FATCA’d and having my bank account closed by Deutche Bank Belgium, I now have ING Belgium finally figuring out where I was born and sending me documents to be returned “within 30 days” otherwise ING “will not be allowed” to open any new accounts for me. The document is not specifically aimed at US persons, but also at people with addresses outside of Belgium. The letter also threatens to send my data to the Belgian Tax Authorities. Sort of curious as to how they will escalate this if I don’t answer.

21. @Fred
    Is this a precursor to crs, or perhaps an attempt to avoid US person discrimination accusations.

22. ‘European Parliament resolution of 6 July 2016 on tax rulings and other measures similar in nature or effect (2016/2038(INI))’

    ………..”68. Calls for the establishment of a structured dialogue between the European Parliament and the US Congress on international tax issues; suggests setting up formal interparliamentary fora to deal with these issues and also utilising the existing Transatlantic Legislators’ Dialogue framework in this regard; encourages the EU and the US to cooperate on the implementation of the OECD BEPS project; takes notes of a significant lack of reciprocity between the US and the EU in the framework of the FATCA agreement; encourages enhanced cooperation between the US and the EU in the framework of the FATCA agreement in order to ensure reciprocity, and invites all parties involved to take part proactively in its implementation;”…………..

    http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2016-0310+0+DOC+XML+V0//EN

23. What will be the outcome for FATCA at the intersection of:
    http://www.sophieintveld.eu/liberals-and-democrats-concerned-about-loopholes-in-eu-us-data-protection-umbrella-agreement/
    and FATCA
    and ‘Trump’s Executive Order Eliminates Privacy Act Protections for Foreigners ‘ http://www.michaelgeist.ca/2017/01/trumps-executive-order-eliminates-privacy-act-protections-for-foreigners/

24. Added to the above, see also;
    http://www.sophieintveld.eu/letter-to-eu-commission-what-impact-has-trump-decisions-on-privacy-shield-and-umbrella-agreement/

25. NEW TEXT ON VIRGIN ATLANTIC WEBSITE (seen after booking a flight from UK to US) READS, “Born in the US but hold a non-US passport? A change in US government policy now means that anyone born in the United States is considered to be a US citizen. As a result, if you were born in the US but don’t hold a US passport, you?ll need a ‘loss of nationality letter’ to enter the country. Please note that we are not able to carry passengers in these circumstances unless they have this letter, which can be obtained from the US embassy.”

    I wrote to Virgin to ask as follows:

    ” I *was* born in the USA. I am not a US citizen (I am a UK citizen, in possession of ESTA clearance, which I have already used). In 2012 I formally and successfully renounced my US citizenship. I have a CLN ( = Certificate of Loss of Nationality). This is what I have successfully shown to Virgin check-in staff to calm them down on previous occasions when they have been perplexed by my city of birth & eligibility to fly. Please email me to confirm that nothing further is required of me other than continuing to have available a copy of the CLN when I arrive at Heathrow for my travel to US”.

    Virgin wrote back with a non-answer, saying I had to ask the US embassy! Of course, theUS embassy has no email address.

    Does anybody have any informatin or ideas how to handle this?