Q Canada opposes the planned U.S. Foreign Account Tax Compliance Act (FATCA) aimed at American tax evaders in this country. Explain your concerns?
A FATCA is the poster child for the problem of extra-territoriality. One can understand the rationale. They want to cut down on tax evasion. Fine. We understand that and are sympathetic to that. It’s the way they have chosen to go about doing it which is a real problem. It’s hugely unworkable. It extends U.S. territoriality into Canada. It threatens to erode Canadian sovereignty. Ultimately … FATCA would have turned individual banks, individual financial institutions, into arms of the IRS [Internal Revenue Service] in the United States. If FATCA came through in its current form, before a Canadian citizen could open up a bank account at a Canadian bank, you would have to prove you were not an American citizen.
To open/ maintain a current account at one of the major banks in Switzerland, the following master data is now required (translated). Please see section in bold letters below:
Bank Relationship Basic Data Declaration
Type of Bank Relationship: Single-Owner in Person’s Name
Document Status: First Declaration
Owner of Bank Relationship:
Title, Name, First Name, Street/ Nr., Postal Code/ Town, Country
Date of Birth, Nationality
Telephone Home, Telephone Business
Declaration of Status of Customer as Non US-Person or US-Person (ID)
1. Are you a US Citizen? Yes/ No
(You must answer with “Yes” in the event that you possess more citizenships including US citizenship)
2. Were you born in the USA (or in one of the US Territories)? Yes/ No
3. Are you in possession of an American “Green Card” (independent of expiry date)? Yes/ No
4. Do you have residence in the USA from a US tax perspective? Yes/ No
5. Irrespective of the above Substantial Physical Presence Test are you resident still in the USA? Yes/ No
@Innocente
Is there a certain reason why you did not mention the name of this bank? I will soon be starting to look for banks to refinance my mortgage and this information would be helpful.
I think somebody already posted something similar including a PDF of the document. I just can’t remember who it was or when 🙁 “Alzheimers laesst gruessen”
*Interestingly this questionaire omits one key question the answer to which also determines whether or not the applicant is a US citizen. That question:
Were you born outside of the US or its territiories to a parent who posesses US citizenship? An affirmatative answer to this question confirms, with one rare exception, that the applicant IS a US ciizen. The one exception is if the US citizen parent did not reside in US territory for a certain specified time in which case the parent cannot pass on citizenship to a child born abroad.
Unfortunate that the question about FATCA in the CBA article is at the very end. Threats to sovereignty should be top priority. But the band plays on. Amazing.
@ UncleTell:
In the interest of confidentiality over my CHF 1’500 rental deposit account, I politely decline to mention the name of the major bank that is now harboring this account.
I was in an impertinent mood when I opened this account and said to the bank clerk at the end something as follows:
Innocente: Es fehlt eine Frage.
Clerk: Wieso?
Innocente: Ob ich Jude bin.
She did not understand what I was talking about and I continued on how the Jews before WWII were identified, treated separately (ausgegrenzt) and then murdered. Her supervisor heard some of this and evidenced a shocked look. I made my exit.
Innocente, “Wieso?” “Ob ich Jude bin”. Great response! In the past, Swiss bankers gladly took the deposit of Jews then hid them from their heirs for 50+ years.
@Innocente
O.K. I didn’t know that you were a customer of this bank. I’ll have to remember that one “Ob ich Jude bin.” Maybe it would get some people to start thinking a bit more about the whole situation. I made an offer to share my email address with swisspinoy, maybe we can start a “Selbsthilfegruppe” 🙂
We could meet once a month or so and wash our sorrows away with beer ! 🙂
Or even better, how about:
“The He-Man FATCA Haters Club”
I wish they’d repeal Citizenship Based Taxation!!!!!
2. Were you born in the USA (or in one of the US Territories)? Yes/ No
I’m curious to know if you answer Yes, and then you whip out your CLN; will they accept it or still reject the application?
*@geeez, Who can assure me that Congress will not enact the the president nor sign legislation to retroactively annul all CLNs that have been issued up until now?
That is effectively what the Supreme Court did when it declared unxonarirurionL prior law which resulted in automatic loss of US citizenship for those who became naturalized citizens of another country. In one fell swoop those who had lost the US citizenshipn had it automatically and retroactively restored.And with that citizenship restoration they were retroactively obligated to submit FBAR reports and subjected to horrendous confiscatory penalties if the had failed to do so.
I’d like to know what the ‘…’ was in Terry Campbell’s response.
*I would too. He makes a lot of “tense shifts” in his remarks. I can’t tell if he has inside information that the US intends to “cave” but can’t say it publically or what.
@tim, I noticed them too and also wondered…
@geez:
You asked:
“2. Were you born in the USA (or in one of the US Territories)? Yes/ No
I’m curious to know if you answer Yes, and then you whip out your CLN; will they accept it or still reject the application?”
My view is that the purpose of these questions is to classify you as a US Person or Non-US Person, and not necessarily to deny your account application. If you show a CLN, I would presume that the bank will then classify you as a Non-US Person.
BTW: the ID I had with me indicated only my nationality and did not show where I was born. The clerk simply asked.
*@Inocente, did the clerk ask your nationality or your nationalities (plural)?
@Roger: For question 1: “Are you a US Citizen? Yes/ No”, the clerk relied on my ID only and checked Yes. For question 2: “Were you born in the USA (or in one of the US Territories)? Yes/ No”, the clerk had to ask since my ID card does not list place of birth and I did not have my passport with me. After the form was completed, I reviewed and signed it.
Glad to see the FATCA question, and such a firm answer. The other silence in Canadian media is deafening.
Would have been great if Campbell had noted that those million or more individuals and households (at least one of every 32 ?) affected by FATCA in Canada include many/most who were born duals, or naturalized duals, or are ‘accidentals’, as a stronger example of the extent of the extraterritorial reach. If a ‘foreign’ country – the US, is allowed to continue to arrogantly intrude unchecked, into Canada and Canadian banking and economy through imposing a burdensome and oppressive taxable and reporting status established at birth – through parentage, that is height of intrusion on another sovereign country and it’s citizens. And we know that the impetus for the US to find, tap, or invent new sources of tax revenues will only continue to grow – and so inevitably will the burden and intrusion grow.
*@Inocente, Thank you for your ressponse. These questions might not really discover the US citizenship of some persons. Some of those abroad to a US parent might answer NO as to their US citizenship, not realizing that having been born abroad to US parent, having never had a US passport or Social Security number, etc. automatically resulted in their being a US citizen without ever realiizing it.
It does appear that a US person might filter through the bank’s questoning and be a US citizen without either the bank of rhe person realizing they are just as much a US citizen as if they had been born in Peoria and never strayed beyond the citiy limits. Also, if they were born in the US to a foreign parent there on an official diplomatic mission then the person does not have US citizenship.
@innocente, what’s to prove that someone with a CLN hasn’t reattained US citizenship since it was issued? Of course they may be deemed insane for having done so.
*My prior comment raises a question: Does anyone know how a person born in the US to foreign diplomatic parents prove that they are not, nor have they ever been US citizens? This is one situation where, in spite of having a US birth certificate, the person never had US citizenship.
I can visulaize such a person being questioned by US Immigration, or being prohibited from boarding a flight bound for the US in a foreign country, because their foreign passport indicates their place of birth as being the USA.
*@bubblebustin, under current law renunciation of US citizenship is irrevocable (unless you did it as a minor under duress, without realizing what you were doing).
In other words, once you have renounced you cannot recuperate it again. It is forever. A CLN is final.
@ Roger, Bubblebustin:
The bank is trying to classify the customer as a US or Non-US Person to comply with FATCA and to protect itself. I could see where a dual-citizen could lie to a bank by presenting only his non-US passport, especially if the passport does not list the country of birth.
After the five questions, there is the following statement on the bank account form (translated):
“The customer is obliged to inform the bank immediately if his status as a Non-US Person changes per US tax law. The customer acknowledges and accepts that the neglect to inform the bank immediately of any change in his status as a Non-US Person, respectively, any misrepresentation in connection with his status as a Non-US Person, is justification for the bank to cancel the bank relationship without notification.”
*Inocente, With that additional wording it appears that the bank had indeed pretty well covered itself. This limits those who might slip through to those who deliberately sign a false statement and those who are US citizens born to a US parent abroad who do not realize that makes them US citizens.
Many thanks!
@Roger, one can in fact go through the naturalization process again after receiving a CLN, can’t they? But the bank seems to have this covered, as Innocente has stated.
One of the points I made in my Pre-2013 Budget Submission to the Gov of Can Finance Committee, was that not only does citizenship based taxation create two classes of Canadians, FATCA will create two sub-classes of US persons within those classifications-those who are ‘out’ and those who can avoid detection, perhaps pitting them against each other as only one group will be discriminated against.
*@bubblebustin, I’m not a lawyer, but this State Department websitite indicaties that renunciation is irrevocable.
http://travel.state.gov/law/citizenship/citizenship_776.html.
According to my dictionary the word irrevocable means unable to be repealed or annulled. It would seem to me that this means the individual who renounces has no possibility of becoming a US citizen again by naturalization or by any other means
If the person has not been blacklisted and barred from ever entering the US again under the provisions of the Reed amendment, I am aware that it is possible for an ex-US citizen to apply and receive a US permanent resident visa. An American friend I knew in Brazil renounced his US citizenship in 1977 as a direct result of the Tax Reform Act of 1976. He became a Brazilian citizen which was relatively easy for him to do since his children were born in Brazil and had dual US-Brazilian citizenship.
Subsequently he sold his business in Brazil and accepted employment in the US and did obtain a green card, but as far as I know he did not attempt to become a US citizen again. His wife, also a US citizen, remained a US citizen so that may have made it easier to obtain a permanent-resident green card.
It has been some 34 years since I have been in contact with him, so do not know if he is still alive. The last I knew, back then, he was living in Ft. Lauderdale and communting to his job in Miami. I am aware that he retired just a few years after relocating back in the US. His job involved considerable travel which was more complicated since more countries back then required visas of Brazilians than was the case with US citizens.
Someone on this blog may have more experience in immigration and US citizenship who may be able to provide more detailed information.
Yeah, officials say irrevocable. Doesn’t all that mean is that the renunciation per se is not ordinarily reversible? (The “law” can achieve just about anything, which makes law itself almost nothing.) I know directly and reliably of an instance where a renouncing lawyer had a pleasant conversation with an officiating consular officer about various ways in which that citizenship so crippling to extraterritorials might be reacquired. One easy case social thought experiment: you want to tell me that a renouncer who subsequently marries a U.S. citizen has no possibility of permanent entry? That might be too weird even for the United States of Exceptionalism.