FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See FATCA Discussion Thread (Ask your questions) for earlier discussion.
@badger
The NDP has put out a press release today…. there is a letter as well that I received from my MPs office written to the Privacy commissioner. I have sent it on to the Monitors of IBS. here is the press release. I googled and found no link…but here it is.
March 25, 2014
CANADIANS DESERVE ANSWERS ON FATCA
OTTAWA – Timmins-James Bay MP Charlie Angus has written the Privacy Commissioner about the potential breach of privacy rights of Canadian citizens of American background. Under the American Foreign Account Tax Compliance Act (FATCA), and Intergovernmental Agreement Canadians of American origin are being pressured to turn over all manner of personal financial information for potential taxation. Angus says the bill is an over reach and an invasion of the rights of ordinary Canadians.
“When I am being contacted by 80-year-olds who have lived in our country for half a century that they are being told to turn over the details of their life insurance policies, this is an unfair intrusion. I have written to the Privacy Commissioner asking her what steps are needed to protect the privacy rights of Canadians.”
Angus says the problem facing Canadians of American origin is that the Privacy Act is woefully out of date especially when it comes to sharing cross-border information.
“There are serious concerns that Canadians privacy rights are not going to be respected by the negotiations over FACTA.”
Angus says he doesn’t have faith in the Conservative government’s negotiations on the FACTA file.
“The Conservative government says that private information will be handled by CRA and covered by the Privacy Act, but, several audits by the Privacy Commissioner have pointed out consistent deficiencies in CRA’s handling of Canadians private information, and several reports by the Privacy Commissioner have argued that the Privacy Act is in need of urgent reform.”
http://charlieangus.ndp.ca/canadians-deserve-answers-on-fatca
Flaherty to CARP:
“This approach is consistent with Canada’s privacy laws, adding a strong layer of protection that would have otherwise been absent.”
– See more at: http://www.carp.ca/2014/02/22/federal-minister-finances-message-carp-members-canada-won-privacy-protection-exemptions-relief-fatca/#sthash.o5hGcMkv.dpuf
Indicating it will pass charter scrutiny. How strong can Canada’s privacy laws be to allow this to happen, or, how far will the Canadian government go in bending them for the banks? I guess a law is only as strong as those who defend them.
OK, I know I can be slow to catch on to some things, hopefully forgiven because of age, but might someone explain to me the difference between the banks giving over my information and the CRA giving them the same information? It just seems like a detour to me. Are the obligations of privacy different for the CRA than the banks? I would think banking information on a law abiding citizen is a civil matter, not a criminal matter. (But I guess I am deemed a criminal by the US…is that how they are able to bend the privacy laws)? I am totally clueless on this one.
I’m not real clear on that either, Charl. What’s worse is that we are now going to have TWO countries collecting unprecedented amounts of information on a specific group of its citizens!
Regular Canadians won’t be subjected to this level of scrutiny by the CRA, and US persons living in the US aren’t subjected to this kind of reporting and penalties on accounts where they live.
I could never see what difference it makes who hands the data to the US. I guess if I were a bank, I’d think it’s great the government is doing it — but I’m a person, so it’s feels like the government is collaborating with the enemy forces.
Another thing that bugs me is that Canadians will be paying tax to fund the operation of the division of CRA which is set up to administer FATCA. Kinda weird and really sick, some division of CRA will basically be an IRS branch plant. So, basically we all have to pay tax to Canada, some of which will be used for the benefit of the US.
And is the privacy act in need of reform to accommodate IGAs violation of the previous norms? (OK, I am scaring myself here). I’m thinking I have read something else here about that but can’t find it. If that happens we are in big dodo with the Charter challenge.
Se my comments here:
http://isaacbrocksociety.ca/2014/03/14/b-c-freedom-of-information-and-privacy-association-speaks-out-against-fatca-iga/comment-page-1/#comment-1231943
and read this
https://www.priv.gc.ca/media/nr-c/2006/nr-c_060605_e.asp
“Ottawa, June 5, 2006 –The Privacy Act is an outdated law that leaves the Office of the Privacy Commissioner of Canada virtually powerless to protect the privacy rights of Canadians relating to information collected, used and disclosed by the federal government, said Privacy Commissioner Jennifer Stoddart in a document tabled today with the House of Commons Standing Committee on Access to Information, Privacy and Ethics.
The Privacy Act, which came into force in 1983, has never been amended or updated despite repeated calls for review by successive Privacy Commissioners.”……
and,
Wondering whether the Privacy Commissioner did a PIA Privacy Impact Assessment Review for FATCA – for the CRA and any other affected federal agency and department? If so, where is the result?
See definition of a PIA:
“6.1 Privacy Impact Assessment Reviews
Since 2002, federal departments and agencies have been directed by Treasury Board of Canada Secretariat (TBS) to conduct a Privacy Impact Assessment (PIA) early in the development of initiatives that pose potential threats to privacy, and to submit them to our Office for review. The goal is to identify privacy risks and devise strategies to eliminate or mitigate them.
Our Office asks that as part of this process, government institutions subject their programs and activities to a four-part test: Is the initiative absolutely necessary?; Is it likely to be effective in achieving its objectives?; Is the anticipated infringement on privacy by the initiative proportionate to any potential benefit to be derived?; And, are less intrusive alternatives available?
When the four-part test has been met, we ask government institutions to demonstrate that the data collection is minimized and appropriate, that the information collected will be securely protected, that uses and disclosures are appropriate and controlled, and that the information will be disposed of in accordance with the Privacy Act.”………..
https://www.priv.gc.ca/information/ar/201213/201213_pa_e.asp#toc7_2
and,
from October 2013, ‘ Annual Report to Parliament
2012-13 Privacy Act Annual Report to Parliament
Securing the right to privacy’
“……7.2 Updating the Privacy Act
At the heart of these matters lies federal public sector privacy legislation which has not been substantively updated in three decades marked by immense technological change and greater information sharing across borders…” https://www.priv.gc.ca/information/ar/201213/201213_pa_e.asp#toc7_2
@Badger….you just made my head hurt, but thank you.
So, do I deduce from this that Mr. Avvery must also focus on how FATCA fails the four part test or is that the direction he is probably going in anyway? Boy I sure wish I could write that one, replete with all caps, big fat four letter words. Me thinks we need an injunction here on both FATCA and the revision of the privacy laws. (I dream a lot). If Dear Mr H goes ahead with revising the privacy laws then our challenge case rather sinks, no? I think I might like the old ones better…information sharing across borders sounds like a huge violation especially in civil cases. You know, I am getting a wee bit more panicked here. Has Mr. H made a move to revise the privacy laws yet? What in heck do we do if he slips in stealth on that one? How would we know? What might be available to us to challenge that one? I need a drink!
Sorry @Charl, I was trying to say that as I understand it, the intent of the IGA is to get around PIPEDA and the Privacy Act and any other inconvenient Canadian laws re our rights and freedoms – which are to be superceded and overruled by the FATCA IGA, but that also, the Privacy Act was out of date, and hadn’t been overhauled in years – a point which Privacy Commissioners have apparently flagged repeatedly to the federal government and Parliamentarians. So claims by Flaherty and others that the IGA is ‘consistent’ with Canada’s laws governing privacy are being made with knowledge of those pre-existing weaknesses in mind I am sure. ‘Consistency’ isn’t worth as much as it might sound if the underlying framework is weak and out of date. Having the banks report to the CRA is a plan to get them off the hook in terms of potential liability, and puts the CRA in between them and having to deal directly with the IRS. And allows Flaherty and Harper to disingenuously pretend that the FATCA IGA is “just” “building” on the “existing” ‘bilateral’ Canada US Treaty (instead of a unilateral US imposed extraterritorial law), etc.
OK, I have another thought…two in one day, amazing! Now that we have at least two MPs (are there any more?) on board might they have at least a voice, if not to demand the total repeal of FATCA, at least not to go forward until the US banks also submit FFIs and COMMIT to reciprocity, on paper, signed in blood? Would our government not look totally even more foolish accepting a one sided deal? (I know we don’t have CBT but we might come up with some other reasons to want to know what Canadians are doing in the US, at least have the option on paper). From what I have read this would never pass in congress and maybe the whole thing might go belly-up? OK, am I being totally naive here again? We can’t even get the word out about the total mess that FATCA is, good luck with trying to get out our government did not even get a bilateral agreement. I’m grasping at straws here, totally frustrated beyond words that no one is listening. But maybe one by one..May, now Angus things might go in our direction for a change.
Bloomberg: No Reprieve on Upcoming FATCA Deadline, Says Koskinen; Quest for Guidance Continues
http://www.bna.com/no-reprieve-upcoming-n17179889057/
“July 1 is a hard and fast deadline for implementation of the Foreign Account Tax Compliance Act, Internal Revenue Commissioner John Koskinen told tax practitioners.”
“The July 1 deadline puts pressure on the IRS as well–to have its own information technology in place to handle the influx of data the agency expects.”
It no longer matters what Canadian privacy, human rights or banking laws say. The proposed enabling legislation for the IGA will override all of them. That is why we need to try to stop that enabling legislation from being passed or we need to pursue the possibility of a Charter challenge.
@Blaze
What else can I do to help all of you to try and stop the enabling legislation? I have written to everyone I can think of to no avail, commented on articles when I can, talked about this to everyone I know (they have stopped listening), and contributed to the challenge. I am so damn frustrated I am going to burst an aneurysm. I can just imagine how it is for all of you having been at this way longer than I. How do others cope with this frustration? Is their solace in hoping the ‘publicans take the senate and this is repealed, it inevitably will crash under its own weight, enough MPs will finally get the message, (do you really think our banks would ever divest from the US?), I just don’t know where to put my energies. I keep thinking about alternative possibilities but, with my limited knowledge base, they are often rather silly. My latest flight of ideas goes to the possibility of launching a civil suit against the government. I’m sure you have already thought of that. I don’t know, just to make a lot of noise and possibly faster than waiting for a charter challenge. I just need someone to tell me what I can do with this lingering OMG I’m so screwed mentation that is consuming me. I’ve read so many times that the world is watching Canada, we have a huge obligation on our shoulders to make this right, but just freaking how?
@northernstar, thanks for posting the press release and letter from MP Angus. Glad to see MPs that get it – who take their duties to safeguard Canada and Canadian citizens and residents (vs. only the CBA, IIAC and Canadian financial industry lobby) seriously.
@ Charl
Maybe it’s time for another thread like this one from way back when:
http://isaacbrocksociety.com/2012/06/04/how-do-you-cope-with-anxiety/
I felt the best relief from my stress when we were collecting for the C3f. I hope to feel the same way AFTER Mr. Arvay’s “opinion’ which I hope is YES and we are into the next phase — collecting for the actual Charter Challenge. I find commenting gets almost too homework-like at times, not much relief there, but I am oh so ready to start putting my money where my mouth is. I am looking forward to having experts weigh in because my amateur musings seem like ping pong balls bouncing off a brick wall. I guess pinging the wall is better than banging my head against it though. I’d be a bloody mess if I did that.
@Em
I read through that thread and had myself a real belly laugh with Petros saying he hyperventilates as everyone was sharing how they coped. Boy, you folks have been going through this a long time and newbie like me must be so annoying. All I have to offer is what has been said a million times before. It is so horribly sad that those threads from 2012 still apply. All I can say is how sorry I am that I just didn’t know.
Do we have a plan B if Mr. A’s decision is not good? If yes, can we start doing that now anyway? Is a civil suit a dumb idea? Did you see Russia was asking for reciprocity, can’t we at least get our gov to ask for that? (I think this really exposes the crux of these phony IGAs the US is making). OK, I’m going to pat the dogs as recommended in the earlier anti-anxiety posts cause I’m starting to take Petros’s advice.
@ Charl
Count your blessings. You haven’t had to hyperventilate as long as some Brockers have. Those are our tried and true Blue Brockers (note complexion colour). 🙂 Good questions but I haven’t got the answers. So pat, pat, pat the dogs. Do they sense your worry? I felt sure, when we had dogs, that they could do that and they would try to help. Our cats — not so much. 🙂
FATCA and the law of unintended consequences:
One consideration our research staff is monitoring is the potential for unintended consequences. While it seems highly improbable today, there is the potential for a negative international reaction to FACTA. One can interpret FATCA as financial or tax revenue protectionism. The law comes into conflict with some foreign nations’ bank secrecy laws, like those in Switzerland and Austria, for example—and in that way, it might appear like the US government overreaching and stepping on the sovereignty of other nations. Should a trade dispute develop out of the situation, it is a potential negative for stocks, as it could cause fragmentation in the global financial system and inhibit the free flow of capital through the creation of severe tax barriers. This would discourage foreign investment and, in that way, would be a similar outcome to typical tariff wars or trade protectionism.
However, most nations are agreeing to waive bank secrecy laws to make way for FATCA. Most major nations globally have already signed agreements—including Switzerland, Germany, the UK, Bermuda, the Cayman Islands and more. (You can see the agreements yourself at the US Treasury’s website here.) Some remain, like Austria, which is close to an agreement but hasn’t inked one as of this writing. And a comparison may be the reaction to the USA Patriot Act, passed in the wake of the September 11, 2001 terror strikes. The Patriot Act, which added many restrictions and reporting requirements on foreigners and nonresident Americans holding financial accounts met with some squabbling from abroad, but little actual action.
http://www.marketminder.com/s/fisher-investments-fatca-follies/d0ef42fd-ce79-4d28-ad07-4735e515b1a7.aspx
@bubblebustin….
Did you click onto the link that said… “has some pundits up in arms about potential stock market impact” ? another money making industry beside the FCC is born.
Mopsick on FATCA Facts and Myths…
http://mopsicktaxlaw.blogspot.co.nz/2014/03/count-down-to-fatca-fatca-myths-and.html
Calls attention to OverSeas week, and Victorias blog, and the hyperventilation of Isaac Brock Society.
But then he ends like this….
@ Just Me
Is he saying, go ahead all you innocent taxpayers, let your litigation begin, we’ve rolled up our sleeves and we’re ready for you to “bring it on”? Or something else? You can take a guy out of the IRS but can you take the IRS out of a guy? No, I’m not hyperventilating — way too tired for that.
@Em…
I am not sure what he is saying. He posted it on Linkedin, but don’t think I will comment.
He seems to be getting confused in his latest articles, going back and forth. I wonder how it affects his business in running compliance seminars.
Mopsick speak with forked tongue.
bubblebustin and All,
from Victoria, The Franco-American Flophouse: “The Lay of the (Home) Land”
Also: @Mopsicktaxlaw talks The #FATCA of the matter, but note “Final FATCA Fact”
Thanks for these, Victoria and RenounceUSCitizenship!