Media and Blog Articles Open for Comments – Part 3 of 11 (Year 2016)

2,818 thoughts on “Media and Blog Articles Open for Comments – Part 3 of 11 (Year 2016)”

1. @EmBee – I don’t think there’s any way for bitcoin technology to be monopolized and turned into an instrument of control. Bitcoins can’t be stolen in the way gold bars can be stolen.

   I hope the new systems that are being developed will lead to banks being less subject to US control because they’ll be able to interact with each other directly rather than via the US dollar. A bank could thus choose to ignore FATCA with no risk of withholding, and a bank in that position would have no need to treat USPs as pariahs.

   Banks that are heavily invested in the US of course will continue to comply with FATCA, but a bank that’s more focussed on the EU, or China, for instance, might be able to just say no. We’ll have to wait and see.

2. @ iota
   Wait and see, indeed. I don’t detect this trend to “independent” banking that you do but if things play out as you describe it might be a good thing. Ordinary people aren’t very aware of the macro-transaction level of international banking. My concern is that our micro-transactions get swept up into the big scheme of things and we lose our last vestige of financial freedom — CASH. Although I’ve read about ways they can even make cash trackable. I’m not at all keen on a totally “1984” existence. I’m old but maybe not old enough to check out before it becomes an inescapable reality. My druthers would be to see a growth in local banks with no international connections. Our credit unions were a good model but they often merge and the bigger they get the more the temptation to expand into the realm of international investments.

3. @EmBee – there’s certainly a trend towards experimenting with bitcoin-type distributed ledger systems, but the possibility of banks taking up the opportunity to become less dependent on the US dollar, is just something I hope to see. It may never happen. As you say, they do get tempted by the Yankee dollar, and once their money’s there, their soul is there.

   Still, it’s at least probably giving the IRS some headaches trying to figure out what to do about it. 🙂

4. @ iota
   Headaches for the IRS? YES, YES, YES! I’d love to see that after all the headaches they have given taxpayers through the years.

5. @ iota
   When we joined our local credit union it was just that, local. I specifically asked the manager at the time if his institution was involved in derivatives or anything like that. He said no, just local investments and local mortgages. BTW I didn’t understand derivatives myself, I’d only read a bit about them and felt they were a very bad thing. Anyway I believed him but this credit union merged into a bigger operation and I have to wonder how local its investments are now … how far afield has it gone to find ways to increase profits … has it reached across the border. I do know it was very quick to get a GIIN to assure it would be FATCA compliant. Luckily there’s a true local credit union in a town not too far away that I can transfer to if the uneasy feelings I have increase. My husband put some savings in there — absolutely NO questions asked regarding possible US ties.

6. In Britain, all the credit unions seem to have their services provided by same clearing bank, and that bank is definitely signed up for FATCA. I don’t suppose they run diligence screenings on the credit union accounts but I’m not sure what questions might get asked on opening a new account.

   Fortunately, I’ve renounced and the CLN seems to work – just opened a new current account and the evidence of non-USness has been duly examined and I’ve been declared not guilty and allowed to give them my money. Insane, isn’t it!

7. @ iota
   My husband had his CLN at the ready when he opened the account with the true local CU but thankfully (for now at least) USness is not a factor there. Yes, this is the world we live in … insanity reigns. It’s not what you got — money to put into a bank’s inventory — but what you are not — with no USness there’s a welcome mat out but with USness the door slams in your face.

8. @iota – “Fortunately, I’ve renounced and the CLN seems to work…”

   Sometimes, but not always. If you haven’t already seen this (it did the rounds on IBS a couple of years ago) you might get a buzz out of trying to open an ISA at Interactive Investor.

   Go to http://www.iii.co.uk/isa and click “sign up now”, and then “yes” (I’d like to open an ISA) on the next page, and “Next”. You should now be in “Personal Details”. Halfway through you will see a ‘Country of birth’ pull-down. Select “United States” — no need to enter anything else at all on this page — and you get an instant refusal so blunt that you can almost hear the door slamming in your face.

   No questions about whether or not you have renounced, have a CLN, that sort of thing, just a blanket rejection for US-born persons: “You have entered details which would classify you as a US Person. Unfortunately, our service does not extend to US Persons. We regret that we are unable to accept your application.”

   Now, Interactive Investor is not a mainstream bank, but nor is it a niche operation in the UK. Such brokers/platforms are essential for anyone saving into a SIPP or ISA, and there is nothing at all exotic about either account type. This broker is clearly are ‘over-filtering’ for US citizens. And not just that, but an ISA is specifically excluded from FATCA reporting so rejection seems unwarranted anyway. Yet here is a UK broker that won’t entertain the idea of taking on anyone with any hint of a US taint, even turning away ex-US citizens (and those born to foreign diplomats in the US).

   This is perhaps one unfortunate counterpoint to your recent positive experience with opening a new bank account. Indeed, insane!

9. The abstract for this article suggests the OECD has added a ‘saving clause’ to their model tax treaty. I would love to read this article but I am not paying 30 euros to do so.
   Could this be the rest of the world looking to get the option to do CBT etc?

   http://www.kluwerlawonline.com/abstract.php?area=Journals&id=TAXI2016048

10. @Watcher – “Now, Interactive Investor is not a mainstream bank, but nor is it a niche operation in the UK. Such brokers/platforms are essential for anyone saving into a SIPP or ISA, and there is nothing at all exotic about either account type. This broker is clearly are ‘over-filtering’ for US citizens. And not just that, but an ISA is specifically excluded from FATCA reporting so rejection seems unwarranted anyway. Yet here is a UK broker that won’t entertain the idea of taking on anyone with any hint of a US taint, even turning away ex-US citizens (and those born to foreign diplomats in the US).”

    The CLN only “works” in the context of the “curing” instructions. If an institution chooses to exclude all customers with “indicia”, there’s nothing to “cure” and the CLN is irrelevant. Excluding those of us with US PoB, with no exceptions, saves the FI the cost of implementing the procedures. NS&I does this, on its Direct Saver account. There was a hoo-ha when FATCA hit because many USPs had their Direct Saver accounts closed. And that’s the chancellor’s own bank!

    “This is perhaps one unfortunate counterpoint to your recent positive experience with opening a new bank account.”

    I’m beginning to get the impression that the bank in question is as keen to get out from under the US thumb as the rest of us. I learned yesterday that they’ve not only invested in distributed settlement technology but already offer an iOS app which would let me send money abroad directly to another individual, bypassing the conventional clearing system, by using ApplePay in conjunction with Ripple, one of the new blockchain implementations. 🙂

    Indeed, insane!

11. @Neill – “The abstract for this article suggests the OECD has added a ‘saving clause’ to their model tax treaty. I would love to read this article but I am not paying 30 euros to do so.
    Could this be the rest of the world looking to get the option to do CBT etc?”

    From a BEPS-related document at https://www.oecd.org/tax/treaties/treaty-abuse-discussion-draft-march-2014.pdf:

    The provisions developed under Action 6 (Preventing the granting of treaty benefits in inappropriate circumstances), including the minimum standard on treaty abuse, the introduction of a “saving clause” to make explicit that treaties do not restrict a State’s right to tax its own residents, and the specific anti-abuse rules related to (1) certain dividend transfer transactions; (2) transactions involving immovable property holding companies; (3) situations of dual-resident entities; and (4) treaty shopping using third-country PEs.

    It’s not at all clear to me how the Multilateral Instrument is supposed to work.

12. @iota

    The NS&I debacle you cite differs from what Interactive Investor do. NS&I refused accounts for “a person who is either a US citizen and/or a US resident for tax purposes …“. It is clear that this does not apply to anyone with a CLN, no matter what FATCA indicia they may also have. Not so with Interactive Investor’s blanket ban, though, which is based purely on indicia and leaves no wiggle room for CLN holders short of lying about place of birth.

13. @Watcher – you’re right, the NS&I restriction is different. Which I shouldn’t have forgotten because I do actually have a Direct Saver account, which I closed last year when I learned of FATCA/CBT, and re-opened a couple of months later after I had renounced. I didn’t have the CLN at that point, but I didn’t expect NS&I to ask me for proof of non-USness, and they didn’t. If they had, I’m sure they would have accepted a CLN.

    Thanks for the correction.

    But the point I was making about the online brokerage is that it’s not a case of the CLN not working. The CLN just isn’t relevant. By barring applicants with indicia, the firm avoids a lot of hassle and expense – the need to send FATCA letters, keep copies of CLNs, etc. If they only barred US citizens, as NS&I does on the DS accounts, the CLN would become relevant, and (in theory) effective.

    I think the CLN probably does work as per the IGA. I just was a little anxious about it, until I received the confirmation.

14. A sad sad tale:

    http://www.tax-news.com/features/FATCA__A_Status_Report__573850.html

15. Canada Has A Two-Tier Tax System And CRA Is Part Of The Problem

    2. Double standard in the protection of anonymity

    We can’t find the identity of those affluent Canadians or corporations who have settled with the CRA through various schemes, like KPMG. The CRA says it must protect their “privacy.” But ordinary Canadians are regularly named and shamed on its website.

    In addition, last February, it was revealed that the Canadian Security Intelligence Service (CSIS) got illegal access to private information on some taxpayers, without a warrant. Last fall, the CRA transmitted over 150,000 banking records to the U.S. Internal Revenue Service without informing the account holders, and while a court challenge initiated by the Privacy Commissioner was ongoing.

16. Not a place for comment, but much food for thought. Have posted it on other threads here for extra visibility;

    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

17. The Federal Voting Assistance Program has tried to come up with some reliable figures on Americans abroad. At least one part of government seems to recognize that Americans go abroad to work, be with their spouses, and live with family.
    https://www.fvap.gov/uploads/FVAP/Reports/FVAP-OCPAsummarybrief.pdf

18. Soros-Linked ‘October Surprise That Will End Trump’: The Campaign To Register 8 Million ‘Global Citizens’ To Vote
    Liam Deacon21 Sep 2016
    Disqus – New Group that is AntiTrump thinks that US persons overseas will all vote for Hillary, if only they are registered to vote.
    http://www.breitbart.com/london/2016/09/21/surprise-that-will-end-trump-globalists-registering-8-million/

19. That article linked above is getting swamped with comments – 289 new ones in the past 30 minutes. I looked through a lot and primarily anti Soros and I did not see one pro US person overseas (except mine).

20. Doesn’t look as if can comment here, but could tweet a rebuttal to the Chamber of Commerce and the usual banking and other suspects urging Trinidad to surrender its people and their rights up on the altar to FATCA and surrender to the US:
    ‘Private sector groups urge passage of FATCA legislation’
    Published on Sep 20, 2016,

    “…..In a full page advertisement in a local newspaper here, the private sector organisations including the American Chamber of Commerce of Trinidad and Tobago (AMCHAM), the Association of Trinidad and Tobago Insurance Companies (ATTIC) and the Bankers Association of Trinidad and Tobago (BATT), called on legislators to ensure passage of the bill within the deadline.

    They said they “strongly urge both the government…and the opposition to expedite their discussions and work together with a greater sense of urgency to pass the Tax Information Exchange Bill 2016 to meet the September 30, 2016 deadline.

    “This is necessary to give effect to the Inter-Governmental Agreement signed between this country and the United States of America on August 19th, 2016 regarding the Foreign Account Tax Compliance Act (FACTA)”.

    The private sector group, which also included the Energy Chamber of Trinidad and Tobago, the Trinidad and Tobago Chamber of Industry and Commerce, the Trinidad and Tobago Coalition of Service Industries and the Trinidad and Tobago manufacturers Association, said an urgent request is being made to pass the bill before the deadline “and thereafter the implementation of the necessary infrastructure at the Board of Inland Revenue drawing as necessary on the precedents existing in other Caribbean countries.

    “We fear that delaying this any further may result in serious negative consequences for the stability of the economy as well as individuals and businesses.

    “If non-compliant, international corresponding banking relationships may be terminated, resulting in severe restrictions on everyday banking services such as remittances services, credit card and wire transactions, and other services requiring access to the US financial system”…..”
    http://www.trinidadexpress.com/20160920/business/private-sector-groups-urge-passage-of-fatca-legislation

21. And yet Finance Minister Morneau supports the US extraterritorial FATCAnization of Canadians banking in Canada?

    http://www.cbc.ca/news/business/bahamas-offshore-data-leak-canadian-banks-1.3773041
    “..Morneau mentioned

    Other prominent Canadian names in the data include Bill Morneau, who ran human resources outsourcing and consulting firm Morneau Shepell before becoming federal finance minister last fall. Morneau appears as a director of Morneau Shepell (Bahamas) Ltd., a subsidiary set up in 2014 for his company to consolidate its pension-consulting work in various Caribbean countries, including the Bahamas..”
    3 Canadian banks served 2,000 offshore corporations, Bahamas leak shows
    CIBC, Scotiabank and RBC all cite safeguards against potential for tax evasion and money laundering

    By Zach Dubinsky, CBC News Posted: Sep 21, 2016 9:11 PM

22. @Publius
    Those in hiding who dont want US taint will surely not vote. They dont want to draw attention to themselves. Voting is like asking for a passport.

23. Polly — you can register to vote in Federal elections without further questions asked, and no tax consequences. I am confident that the overseas vote would have swung solidly R this year had the nominee been someone, ummm, … Well, uh. Oh heck, can’t the Republicans give us a palatable candidate who is against FATCA, we’ll come out and swing the vote!

24. Someone on the European Commission grew a spine, or at least a couple of vertebrae: they officially mention that the US has two out of three “risk indicators” suggesting it “could potentially be used to facilitate tax avoidance”
    http://europa.eu/rapid/press-release_IP-16-2996_en.htm
    https://ec.europa.eu/taxation_customs/sites/taxation/files/2016-09-15_scoreboard-indicators.pdf#page=5

    How the list works: first they made a “shortlist” of 81 countries which score highly on “selection criteria”, i.e. have strong economic relations with the EU, a high reliance on financial services exports, and political stability. Then they examined those 81 countries on presence/absence of three risk factors suggesting they could be used to facilitate tax avoidance: namely (a) a lack of transparency, (b) preferential corporate income tax regimes, and (c) zero corporate income tax rate. Zero had all three risk indicators, 45 had two out of three, and 37 had one out of three.

    Among other non-EU/non-EEA OECD members:
    1. New Zealand and Mexico were not on the “shortlist”
    2. Israel and Turkey had two risk indicators — same ones as the US, namely (a) and (b)
    3. South Korea had one risk indicator (b)
    4. All the other OECD members (namely Australia, Canada, Chile, Iceland) had zero risk indicators

    I limit my praise to “a couple of vertebrae” because of all the hedging in their report:

    It is important to stress that the findings of the Scoreboard are not sufficient to draw conclusions on whether a third country jurisdiction should be selected for screening or put on the common EU list. This Scoreboard does not represent any judgement of third country jurisdictions, nor is it a preliminary EU list. It is an objective and robust data source, produced by the Commission, to help Member States in the next steps of the common EU listing process.

    Hat tip: https://euobserver.com/economic/135109 and https://franhendy.com/2016/09/15/alert-eu-issues-tax-haven-blacklist-of-81-countries-highly-likely-to-facilitate-tax-avoidance/

25. @Fred – …you can register to vote in Federal elections without further questions asked, and no tax consequences.

    I wonder. FVAP certainly mentions on its website that in certain circumstances “legal counsel should be consulted because there may be other factors to consider, such as tax implications.”

    https://www.fvap.gov/citizen-voter/additional-info

    Might not be relevant in most cases, of course.

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