There are different legal remedies that can be taken under UK law to attempt to block this agreement. However, there are not really any commentators here from the UK so I have not really spent much time explaining them. If anyone is interested in the UK I can provide more detailed advice if necessary.
http://www.hm-treasury.gov.uk/press_82_12.htm
The two individuals pictured are Emily McMahon of the US Treasury and Deputy Exchequer David Guake. One piece of news is that UK Credit Unions will be exempt from FATCA even if they have UK Resident US Person account holders. Again if their are individuals willing to fight FATCA in the UK I can provide assistance and advice however, no one appears to want to do so.
Good. I had planned to open a UK account for doing business in the UK, but now I will cancel my plans. Bloody poofs.
*This is the wikipedia page on David Gauke who is in fact an elected official.
http://en.wikipedia.org/wiki/David_Gauke
*@Tim, I might be able to help, though have already moved into fully FATCA-compliant accounts, signed W9, etc. Am wary of drawing too much attention to myself as still relatively in early stages of quiet disclosure involving amended vs merely delinquent returns, etc. But might be able to help with letter writing, etc. Am at least willing to see if I might be able to be of some help as I’m in the UK. 🙂
*At first glance.
It’s remarkable how closely this agreement mirrors the IRS draft regulations. They have given nothing.
Cannot imagine all FIs in the US scouring their books for Brits, and soon to be Canucks, Germans, Frenchmen, Japanese etc etc without a major major pushback.
Britain and US both broke but will soon announce plans to hire thousands of swivel servants to monitor FATCA
Credit unions appear at first sight to be exempt . However if they do run across a US account holder, they are obliged to report as if they were not exempt.
Pension funds akin to RSPs are exempt so long as the holder cannot withdraw funds before the age of 55. This rule as it stands would not exempt RSPs if applied in Canada.
@Cornwallistal, I have hopes that FATCA reciprocity is not going to happen, at least in the short term. I am pretty sure Banks will push back hard in the US.
But if it does, what can we do…
Our newly elected representation did not return any of my 2 attempts to talk about this.
I have written to Mr Gauke on three occasions regarding FATCA. The most recent reply I received from him, dated 16 July 2012 (and a fair long while after I wrote to him) is personalized and not a form letter, but it is bland and wishy washy. He defends the govt’s approach as “practical, proportionate, and mutually beneficial”, but does not address the issues I raised of UK residents, and perhaps citizens, being unable to open accounts due to their US person status. The subtext is that protecting banks from 30% withholding is more important than individual access to banking and investment.
Now that this is out in the open I’ll take another stab. I’ve had that on my todo list for a while now anyway. As Cornwallsical notes, the “agreement” looks almost exactly like FATCA, with no ground given aside from vague and hand-wavy reciprocity. Maybe there’s more to it that’s not obvious.
Personally I don’t see much sign of the UK govt developing any backbone on this. We already have one lopsided treaty with the US that the govt has failed to address. It appears that ministers think we now need another.
So glad to see building societies are exempt. I can now heave a sigh of relief. (I think). I also noticed that ISAs seem to fall under an ‘exempt product’ category, which surprised me greatly. I have been lead to believe that although the interest earned on these is tax-exempt in the UK, the US still requires that tax be paid on the interest. Consequently, I’m surprised they moved these into an ‘exempt product’ category.
@Cornwalliscal – From reading the Annex, it appears that this only applies to US persons who are not resident in the UK. So if you opened an account in the UK and then subsequently left the UK, they would have to report you. But if you are still resident, they don’t.
*@ExpatInTheUK
@Watcher
There is actually a fair bit of time before this thing can be ratified. UK Parliament is going on break for several weeks for party conferences then Parliament must be in session at least 21 days with MP’s able to object during that time frame prior to ratification. So we are looking at least early November before this think can actually be ratified. I have to say I am bit shocked you recieved a personalized letter from Gauke my impression was he was completely in the tank for the US and unlikely to want to say much of anything to the public at large.
@Tim
Mr Gauke is a politician and has fully mastered the art of saying something and nothing at the same time!
@Expat in the UK
Can you clarify the fine print on the FATCA signing with the UK. Am I to believe that if you are a resident of the UK, that there are no reporting requirements from your account, assuming your account is with the UK?
I only ask because I am assuming the UK has the same or similar bank privacy issues as we do here in Canada….obviously the UK FFIs have worked out some solution, or are you still going to be asked to waive you r privacy rights (?)
*@Tim – Article 10 would appear to be the date of effectiveness, not the ratification date – the Article 10 say when the IT controls and processes are fully in place – so maybe sometime next year?
*As I just commented on another site their must be a ministerial dictionary of weasel words. Having said that I think Canada’s Finance Minister despite his own weasel word responsed at times has shown a bit more backbone on this issue. A lot of Canadians though complain he doesn’t stand firm enough to which I reply would you rather have Mr. Flaherty in charge or Mr. Guake in charge.
*Mach73
FATCA in the UK will actually be incorporated into domestic UK law thus any privacy law conflicts will be negated as complying with FATCA will be a UK domestic law requirement. My belief is that if this approach was attempted in Canada it would contravene the Canadian Charter of Rights and Freedoms and others here and at other sites have indicated they would bring court challenge and have already contacted appropriate legal counsel to do so.
More info at Maple Sandbox:
http://maplesandbox.ca/uk-signs-agreement/#comment-1351
@Tim and others
You write:
“As I just commented on another site their must be a ministerial dictionary of weasel words. Having said that I think Canada’s Finance Minister despite his own weasel word responsed at times has shown a bit more backbone on this issue. A lot of Canadians though complain he doesn’t stand firm enough to which I reply would you rather have Mr. Flaherty in charge or Mr. Guake in charge.”
Right you are. However, allow me to add some conjecture as to what is going on relative to Mr. Flaherty, the federal cabinet, and the Conservative caucus:
There are said to be upwards of one million (so-called) US citizens in Canada. In a population of 34 million, that is about 3 percent. Some of these are compliant with IRS rules; many are not. But this 3 percent does not exist in isolation. It includes individuals with non-US spouses, with in-laws, with colleagues at work, with friends, with a whole range of people connected with them by ties of family, employment, and affection. Most non-dual Canadians know some number of US citizens or duals in their midst.
If the average Canadian knows a few hundred people, the average Canadian politician knows many times more than that, which means they inevitably know dual citizens. Here is the deal: if you are a cabinet minister (or a member of the caucus), how do you look your cousin’s wife in the face, the secretary in your constituency office, the husband of your campaign manager and say, “I conceded to American demands that will destroy your savings, your pension, your life, that will rob you of your home, that will insure that your children cannot get an education and will leave you to sleep under bridges in the summer and in shelters during the winter”?
US persons and dual citizens in Canada are not organized, but they are ubiquitous. If destroyed, they will not disappear; they will be there as a source of shame forever to the politicians who betray them.
And the UK? Less than 200,000 US citizens in a country of 62 million. About .3 percent of the population, which to say one tenth the “problem” in Canada.
So, the silence of Mr. Flaherty and other federal cabinet ministers is because they are caught on the horns of a dilemma. The US has indicated it intends to destroy the lives of a large number of your citizens and residents. If you try to stop them, they promise to destroy your financial system. (Funny way to treat an ally and trading partner, by the way.) What do you do?
My conjectures.
*NorthernStrike
Just to prove your point I suggest everyone look at the picture linked below. The man on the right is Canadian Finance Minister Jim Flaherty and the woman on the left is US Person Canadian MP Diane Ablonczy(who moved to Canada when she was two years old).
http://www1.carp.ca/community/doc_picture/se%20-%20seniors'%20min%20ablonczy%20fin%20min%20flaherty%5B1%5D.JPG
http://en.wikipedia.org/wiki/Diane_Ablonczy
*@To All, in some ways though, at least it appears that US persons living in the UK will be able to keep their local bank accounts open. Like others on here, one of my main concerns was the risk that my local credit union ‘building society’ might have closed my accounts and thus forced me to move to the more expensive Citibank that routinely take US citizens abroad. So I’m more optimistic in that sense.
*More pictures of Jim Flaherty with other “US Person” Canadians
http://i.huffpost.com/gen/568819/thumbs/r-WESSHERIDAN-large570.jpg
I am actually trying to find more pictures akin to what I showed earlier but rest assured Flaherty knows multiple people in the higher echelons of Canadian politics effected by FATCA.
*Expat in the UK. What is the ‘this’ that you refer to? British FFIs will have to report on all ‘US persons’ Are you referring to credit unions?
@Northernstrike
You proceed with extreme caution and diplomacy.
@Tim
Thank you for the pictures supporting my conjectures. Can you identify the people in the Huffpost photo? I don’t recognize them.
@Tim and @Bubblebustin
Please not that my “handle” here is “NorthernShrike“, not “NorthernStrike“. I take this from the Northern Shrike, a song bird summer resident where I live in eastern Ontario that produces a notably pleasing song, is independent in its habits, but is endangered. “Northern Strike” sounds rather like a militarised missle system, which I am not. Merci beaucoup!
*The Huffingtonpost picture is of Jim Flaherty with former Conservative Alberta Finance Minister Ted Morton who was born in the US.
Other prominent conservatives born in the US or have US citizen parents are:
Conservative Senator Linda Frum:
NB Premier David Alward(close political ally of current Revenue Minister Gail Shea and former Revenue Minister Keith Ashfield)
Former chief of staff to Stephen Harper Tom Flanagan
Former Alberta Cabinet Minister Cindy Ady
http://en.wikipedia.org/wiki/Cindy_Ady
Previously mentioned former Alberta Finance Minister Ted Morton
Previously mentioned Secretary of State for the Americas Diane Ablonczy(longtime and close friend of Laureen Harper(PM Stephen Harper’s wife). Supposedly as the story goes first introduced Stephen Harper and the then Laureen Teskey to each other.
http://en.wikipedia.org/wiki/Diane_Ablonczy
There are more but I can’t think of them offhand.
@NorthernShrike
I’ve never heard of a northernshrike. Thanks!
*Now there are quite a few people on the left side of the politcal spectrum too that were born in the US Elizabeth May, former Toronto Mayor David Miller, and several others.
*Many months ago a big left wing pro FATCA NGO down in Washington actually criticized Flaherty for being a friend of tax cheats. They said they following:
There’s been a great deal of backlash against this law, particularly from foreign banks (surprise) and even the outspoken foreign financial minister of Canada. Some of these concerns are based in logic and fact. Others are not. The Obama administration has remained pretty steady on the issue, but still senior bank officials have still pleaded with Treasury Secretary Timothy Geithner to modify the law.
To which I replied back when I was one of the original Brockers:
There is a new grassroots organization gearing in Canada called the Isaac Brock Society to fight FATCA. Yours truely has made light on their website of the fact that the Task Force for Financial Integrity for Economic Development has received funding from Canadian International Development Agency despite FATCA being against Canadian government policy. In the near future as many Canadian Citizens which are claimed by the US as US persons complain to their MP’s in Canada over FATCA I suspect there will be a move to cut the Task Force’s funding from CIDA as CIDA has done to other organization e.g. KAIROS that do not support Canadian Government policy. I suspect the quip over Canada “outspoken” finance minister will not be appreciated by Prime Minister Stephen Harper or his PMO(Prime Minster’s Office).
I hope the Task Force and its staff will be happy with this reduced funding from CIDA and Canada.
Now those of you who follow Canadian politics know exactly what I am talking when I mention the PMO, Kairos, and CIDA.
@Cornwalliscal – I was responding to your statement of: “credit unions appear at first sight to be exempt . However if they do run
across a US account holder, they are obliged to report as if they were
not exempt.”
In Annex II, Part II, Section 2(f) & (g) which indicates the reporting requirements for credit unions/building societies, etc. They only have to report on US accounts for:
“any Specified U.S.Person who is not a resident of the United Kingdom (including a U.S.Person that was a resident of the United Kingdom when the account was opened but subsequently ceases to be a resident of the United Kingdom),…”
So it would appear that as long as you are living in the UK, these entities don’t have to ferret you out for reporting purposes.