FATCA and the EU
April 2019
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
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
16: Are China, Russia, the EU and Switzerland poised to give in to FATCA?
January 2012
Heidi – “every EU country to a T has signed a bilateral treaty and therefore the EU as a whole has agreed to Fatca and it discriminatory policies.
Did they understand what they were doing, I doubt it. We have asked that question time and time again. Would they have done anything different if they had? I doubt it.”
The EU wasn’t doing anything, was it? Each Member State signed an IGA, but the EU has not, and could not. The Commission has been asked to consider whether the IGAs break EU law, and taken the view that the IGAs don’t break EU law because EU law only guarantees the right to a basic payment account, and the IGAs don’t contravene that right.
“They will say that Americans have the right to renounce. I do not agree with this, just saying this may well be their argument.”
You mean, if USCs sued a Member State for discrimination? I don’t think the right of renunciation would be relevant; it’s birthplace discrimination that’s illegal – discrimination on the grounds of national origin. The legislation requires banks to treat those born in the US as USCs (hence reportable). Thus the legislation is discriminatory. That’s how I see it.
Fred (B) – “The US was smart to negotiate individual IGAs, ”
Yep. The US always wants bilateral not multilateral agreements. With the IGA Model 1 they have got the best of both worlds, unfortunately.
The legislation is discriminatory but perhaps not enough for courts to rule it such. After all, CRS is now in full effect, and if you live in Germany and open an account in Spain the Spanish bank will automtically send your information to Germany. In effect the Spanish bank is discriminating against people who do not reside in Spain. I’m pretty certain that would be thrown out of court. For one thing, the bank is following the law, and for another it is not refusing service. It’s just reporting certain people according to the law. There are plenty of situations where basic freedoms are obviously violated, but society decides that’s just the way it is for the common good and function of the government (Wilton J Tidwell’s views on the legality of taxation notwithstanding).
Hope rests on extreme cases: the accidental born in the US but with no US papers, who cannot go about banking. Cases like this have been documented, I have no idea what happened to them. The described person would have to get the US birth certificate, to go claim a SSN to be able to comply with bank requests. Courts could claim it’s not that hard and that yes, it’s not pleasant, but get your SSN, give the info to the bank, and then renounce or choose not to comply.
The US is also probably smart enough (…) not to go publicly full force against an innocent penniless random accidental somewhere in Portugal.
duality – As Fred says, the case was settled (the parties agreed a settlement) so there was no longer any case to be referred.
The Dutch case wasn’t against the Dutch government, it was against the bank. The bank was refusing USCs – not because the IGA forced them to (it doesn’t), but as a matter of bank policy. It wouldn’t have any effect on other banks, even in the Netherlands, unless those banks were also refusing USCs.
What we need in Europe is a case against a Member State government, which fails at national level and therefore goes to the EU court and succeeds. That would be binding on all Member States. Roll on the day!
A court victory against any Model 1 government could have implications for all, if it led to changes to the Model. Fingers crossed as the Canadian case gets closer to the courts.
@plaxy
Yes, I believe it is birthplace discrimination but they will argue that US citizens have the right (now) to have an account and as much as crs accounts are reported, to resident countries, US citizens accounts are required by IGA to also be reported to the USA as US citizens are deemed to be resident there for tax purposes.
Fred – “There are plenty of situations where basic freedoms are obviously violated, but society decides that’s just the way it is for the common good and function of the government (Wilton J Tidwell’s views on the legality of taxation notwithstanding).”
I partly agree. But the IGAs discriminate on the basis of a characteristic which can’t be changed – national origin. That’s the difference.
I think there would be a good chance if it came before the EU court but I’m not very optimistic that that will happen. People are more likely to put up with it or renounce.
Heidi – there’s two different issues:
a) does the Model 1 IGA discriminate on grounds of national origin?
b) does the Model 1 IGA break EU law by depriving USCs of banking services guaranteed by EU law?
I would answer say that a case based on (a) would have a good chance. A case based on (b) would get nowhere, as USCs are not being deprived of basic payment accounts.
Fred – “The US is also probably smart enough (…) not to go publicly full force against an innocent penniless random accidental somewhere in Portugal.”
Absolutely. Or any USC living outside the US. It’s resident USCs they look for – people they can assess and collect from, with little risk of adverse rulings from the tame US tax courts. People who are unquestionably subject to US tax law.
@plaxy
What would be discrimatory argument of your point A, since by US law and by the IGA, US citizens are deemed to be tax resident in the US wherever they reside and hence reportable. It is the IGA that has to be struck down as being illegal.
Heidi – the IGA discriminates on the basis of birthplace. People born in the US. An immutable characteristic not chosen by the bearer.
But the act of reporting is the same for everyone ie to the ‘country of residence’. US citizens are deemed by the nature of their citizenship to be tax resident in the US
I think it would be a hard case to prove discrimination.
Heidi – I’m glad you’re not my banker. 🙂
The IGA discriminates against persons born in the US.
Nobody is claiming it discriminates against USCs.
But Plaxy again this is the result of the crazy law of birthplace citizenship, but it’s still makes the accounts of that US person living abroad a ‘legally ‘reportable person, to their country of tax citizenship. I just think it’s the IGA that should be challenged, not the discrimination issue as crs clouds that.
Heidi – I was born in the US but I am not tax-resident in the US.
If birthplace was synonymous with citizenship, citizenship would be an immutable characteristic – trying to renounce one’s citizenship would be as meaningless as trying to renounce one’s birthplace.
The IGA requires banks to treat a person born in the US as reportable, unless (optionally) the bank chooses to allow the person an opportunity to prove that they are not reportable, and the person can afford to buy the documentation demanded.
@plaxy
But it is defined as synonymous with US citizenship to the banks unless proven otherwise, cln or other explanation. I have never seen the ‘optional’ part stated. I think you may have been unfortunate in such as they wanted to back report your accounts when you were a US citizen?
We have all had to deal with banks who made up the rules to cover their backsides as they went along. Mine tried to make me sign an non privacy agreement even though I hadn’t been a US citizen since 2012.
“But it is defined as synonymous with US citizenship to the banks unless proven otherwise, cln or other explanation.”
That’s the discrimination. I’m quite surprised that you are finding it hard to understand that it’s discriminatory.
It doesn’t affect only those of who were born in the US and have since renounced. It affects all Model 1 residents with a US birthplace.
Have a look at the BBA example CRS self-certification form:
https://www.bba.org.uk/download-file/?f=eyJ1cmwiOiJodHRwczpcL1wvd3d3LmJiYS5vcmcudWtcL3dwLWNvbnRlbnRcL3VwbG9hZHNcLzIwMTVcLzA5XC9CQkEwMS00NTYyOTctdjEtSW5kaXZpZHVhbF90YXhfcmVzaWRlbmN5X0NSU19zZWxmLWNlcnRpZmljYXRpb25fZm9ybV8ucGRmIiwibmVlZGxvZ2luIjpmYWxzZSwidXNlciI6ZmFsc2V9
The reason it’s not legally permissible in some countries is because it’s discriminatory. That’s what we (or at least I) would like the EU Court to rule is the case within the EU. And then USCs would have a right to self-certify, as those born elsewhere can do, without being forced to buy a CLN.
But it doesn’t matter. It’s probably never going to come before the EU court.
“I have never seen the ‘optional’ part stated.”
It’s not required, which makes it optional.
Plaxy
I think we will have to leave it there, I understand what you are saying and agree with you that IS it discrimatory but it stems from the nature of US citizenship.
If another country practiced cbt then perhaps the case could be tested.
I am saying that I don’t hold out much hope for the success of any kind of legal action from that aspect. CRS has clouded the picture.
@plaxy
I would be interested in knowing which countries it is discrimatory to ask pob. Certainly not in Switzerland. I am on mobile so can’t read your link.
“… understand what you are saying and agree with you that IS it discrimatory”
Took you long enough.
“I don’t hold out much hope for the success of any kind of legal action from that aspect.”
No legal action seems likely, in view of the cost. If a legal challenge did reach the EU Court I believe it would stand a very good chance. Though my opinion is worth no more than yours, as neither of us is a lawyer.
“CRS has clouded the picture.”
Ah, so you still don’t get it.
CRS hasn’t clouded the picture at all. The careful avoidance of discrimination in CRS points up the discrimination in the IGA.
Ok Plaxy
I understand that under crs one has to be asked where one is a tax resident. I believe there is a reference to the possibility of being atax rresident in more than one place, ie you spend too long in the UK even though you live elsewhere. They never were before crs.
The banks are also cognizant of the fact that some US persons who have lived in say the UK all their lives were born in the US. Whether they like it or not they are legally US taxable persons,(unless they are cured) therefore the banks have got away with asking those birthplace questions. Heck, those poor unsuspecting people may not even know. Is it legal, is it discrimatory, would it stand a challenge. If Fatca has been accepted on lieu of CRS then those discovery elements of Fatca have also been accepted.
I am off to dinner with an American who hasn’t renounced, hasn’t reported and doesn’t care. Hope it will do me good.
“The banks are also cognizant of the fact that some US persons who have lived in say the UK all their lives were born in the US. Whether they like it or not they are legally US taxable persons,(unless they are cured) therefore the banks have got away with asking those birthplace questions.”
The banks have not “got away” with asking for place of birth; the Model 1 IGA REQUIRES the banks to ask for place of birth.
“If Fatca has been accepted on lieu of CRS then those discovery elements of Fatca have also been accepted.”
You just don’t get it. EU Member States don’t have a right to “accept” and impose on banks an obligation to discriminate against customers on grounds of national origin. It’s against EU law to discriminate on grounds of national origin.
It’s against EU law to discriminate on grounds of national origin.
It’s against EU law to discriminate on grounds of national origin.
It’s against EU law to discriminate on grounds of national origin.
Or perhaps I should say:
“I think it ought to be against EU law to discriminate on grounds of national origin.”
There seem to be plenty of loopholes.
Never mind. In my opinion, it’s wrong.
Plaxy
Usually when there is a chance of an injustice being challenged it will be, someone or group will take up the cause. I have seen very little in this respect that is why I say I doubt that it could be challenged, not because I think it is OK to ask that question but because I think the US has tied the various government hands into these IGA, s which requires the question to be asked. Break those illegal agreements (by use of non reciprocation) and you have your result.
Yes, it’s against EU law to discriminate based on national origin
And to enter non legal agreements, 🙂
I am off to dinner
“Break those illegal agreements (by use of non reciprocation) and you have your result.”
“My” result?
Which law are you referring to that you believe means that the IGAs are illegal because of lack of reciprocity?
“Yes, it’s against EU law to discriminate based on national origin.”
In some contexts.