This post is from the RenounceUSCitizenship blog.
Earlier this year I wrote that “Peaceful resistance to FATCA will result in a new financial order“. An article by Geoffrey York of the Globe and Mail suggests this may be starting to happen.
China leader’s first trip highlights growing clout of BRICS nations soa.li/GBJC2iN – Anti #FATCA nations form political alliance
— U.S. Citizen Abroad (@USCitizenAbroad) March 23, 2013
The article is well worth reading. Note the following commentary and excerpts:
For a glimpse of a potential new world order, take a look at the carefully chosen plans for the first overseas trip by China’s new President.
Fresh from his triumph in China’s leadership transition this month, Xi Jinping won’t be paying his respects in Washington or Europe on his debut foreign tour. Instead, on Friday, he flies to Russia – and then onward to three resource-rich African countries, in a trip laden with symbolic and political meaning.
What? He is not starting in Washington or Brussels? What is he up to? What could this mean?
Originally an economic bloc, BRICS – now comprising Brazil, Russia, India, China and South Africa – is venturing further into politics and security. The summit will feature an unexpectedly heavy agenda of global issues, from the Syrian war to the planned creation of a development bank to compete with the World Bank, with $50-billion in seed money.
Did you catch that? A group of nations, of which at least three are hostile to FATCA are meeting to create a bank to compete with the World Bank? But, this really could not be of any significance. These countries are of little substance (or so the U.S. might think), but the article goes on to note:
While it claims to have no political ambitions, BRICS is already a powerful economic bloc. Its leaders boast that it represents 45 per cent of the world’s population, 30 per cent of the world’s territory, 30 per cent of global output and 17 per cent of world trade. And despite a recent slowdown, it has been responsible for 50 per cent of global economic growth over the past decade, making it a key source of hope for Africa, where the BRICS nations have dramatically increased their trade and investment in recent years.
Fascinating. Could this possibly be the beginning of a “FATCA Free Zone?” On this note consider the following excerpt from a comment by Todundsteur:
The greatest threat to the effectiveness of both Charlie’s FATCAT and Carl’s STHA is the very real possibility that they will trigger a reaction that attempts nothing less than the establishment of an alternative world financial system parallel to that based on the Tokyo-NY-London-Frankfurt axis.
Johannesburg, Dubai, Mumbai, Jakarta, Singapore, Sao Paolo, Shanghai suggest themselves.
One highly-regulated, highly taxed, safe but stagnant and the other looser, lightly taxed, risky but freewheeling and dynamic.
We shall see.
Meanwhile back in the world of the West, we are still waiting to see whether Cyprus will (in the end) confiscate the savings of it bank depositors to pay for its debt problem. First, Cyprus is “Cyprused” – then the rest of the world. Funny, the U.S. owes China a lot of money. Will the debtor be able to impose FATCA on the creditor?
This may be the best news those opposing FATCA have had yet!
This is most interesting. Don’t have the knowledge to evaluate the figures but would certainly level the playing field a bit. Would only make sense with China expected to become world’s largest economy in the next few years, a new set of players will emerge as their competitors/allies. India’s potential is huge. I have been there almost 20 times and even from a layman’s point of view, the changes over last 30 years are amazing. Cars, electronics (EVERYONE has a cell phone-even old ladies-and the service is better and much cheaper), you-name-it, they’ve got what we’ve got and they want more. I don’t see this necessarily as progress, as there was much about the “old India” that was appealing. But one can certainly understand the direction they’re taking.
Why not Beijing-Moscow-New Delhi-Johannesburg-Rio?
Re: Cyprus — I just read that the Cypriot banks are doling out small amounts of cash via the ATMs to their clients right now so it’s a pretty scary situation for the people of Cyprus. I wonder what happens when someone writes a cheque to pay for utilities or their mortgage or such? Would the banks put a hold payment on those cheques or would they do a transfer of what appears to be non-existent funds? Let’s hope that what happens in Cyprus stays in Cyprus or better yet a solution, other than wealth confiscation, is devised to remedy the situation. I rather like the ideas of a jubilee and banksters in jail but I never get my druthers. As I commented on the G&B article … no coinky-dink I think that Cyprus was set up to be the country which tests the waters for blatant wealth confiscation. The Cypriot banks have been a favourite depository for Russian wealth.
Making light of a bad situation, this gets really good after a couple minutes of leading
http://thebuglepodcast.com/
lead-in
First Switzerland now… U.S. Seeks Answers in Liechtenstein on Tax Cheats http://www.bloomberg.com/news/2013-03-24/u-s-seeks-answers-in-liechtenstein-on-tax-cheats.html
The goal of the BRICS is not to be FATCA free zone, but US dollar free zone. We have only to listen to public statements made by Russian and Chinese leadership, both of which are stock piling Western nation gold like crazy–while the various Western central banks are “leasing” their gold to bullion banks, it’s be shipped regularly to Russia, China and India as these nations take delivery of the physical metal–it will never ever return to the West. Once they have all the gold, then they will switch to settling accounts in gold instead of US dollars. Then the European nations and the US will be bereft of the currency they need to buy the cheap consumer goods from China. I heard once that every 400 years or so, there is a massive transfer of wealth from East to West or West to East. We are seeing before our eyes the current transfer of wealth to the East while the West is in decline. Jim Rogers sees this trend and has moved to Singapore and is having his daughters learn Mandarin.
In terms of military might, it might be worth considering that the US payments on its debt to China covers China’s military budget.
The BRICS and their trading partners are thus setting up a zone of trade where dollars will be worthless, and they are just biding their time while they still find it useful to buy up resources from the West. China alone could sink the US currency in a day, but it would be massively detrimental to their position, which includes about three trillion in US debt and currency reserves.
Well, I hope the anti-dollar movement is also an anti-FATCA movement because it looks like Canada is going to throw us all under the bus.
Latest word I have from my source is that a draft IGA has been completed, and the FFIs will be given a verbal briefing on it the first week in April. It won’t see the light of day for a few weeks after that because the feds are still trying to coax some crumb out of the Americans that will allow them to sell it as a benefit for Canada (hence Flaherty’s recent rhetoric on offshore tax cheats).
Feds were specifically asked about Charter issues, and their reply was a vague “we expect to comply with all our obligations.” Who knows what that means, but that’s as forthcoming as they were on that one.
Apparently the major angst right now is how to authorize CRA to do the dirty work. They can make an announcement about an IGA without involving Parliament, but the CRA authorization requires an amendment to the Income Tax Act. I’m sure they are looking desperately for ways to accomplish that, but so far haven’t found one. This government by stealth is deplorable, and these guys need to be out of power very soon. And I’m a small-c conservative.
So get those class action engines warmed up and ready to go, because Harper is going to do this. As usual, the media is asleep. I think I’ll fire this over to Elizabeth May — too bad she has so little power and influence, but at least she has principles she’s willing to fight for. No one else in that House does.
Thanks for this update, Arrow. It is just UNBELIEVABLE (to me!) that the media sleeps (or is gagged?) to allow this to happen. The media is very effective, however, in reinforcing in society’s mind (from Flaherty’s Budget words in this case) the concept of “tax cheat” to make the FATCA medicine go down without any thinking about the rights gone.
@Arrow
Thanks for your glimpse into negotiations.
@Arrow, I think your insider scoop, is not a big surprise. The writing has been on the wall for awhile. It sure is disappointing though. I was hoping Canada was a true friend and would be one to stand up to the bully.
When things start to really take off and FFI’s are actively hunting ‘US persons’, the shit is going to hit the fan big time. There are going to be a lot of people who have had no clue that any of this has been going on behind the scenes for the last 3 years, who will be caught completely unaware. I can see the deer in the headlights look of confused ‘US persons’ now – sitting across the desk at their bank trying to digest what their CSR is telling them.
I can’t imagine any tailor-made-to-Canada FATCA IGA that won’t still result in a great deal of fallout for USP’s in Canada, can any of you? I really don’t know how the Feds (I almost said Conservatives, but that would not be inclusive enough) are going to pedal throwing 1M USP’s and their families under the FATCA bus. There are way too many of us for our own government to paint us a bona fide tax cheats while other Canadians enjoy a tax system based on residency.
http://isaacbrocksociety.ca/2013/03/22/when-law-becomes-a-substitute-for-morality/
love the Lichtenstein article: 86 people since 2008, or 17 per year. Whoop dee doo, good thing they are putting all of the Resources on that.
Don’t give up with the Canada fight, please.
Correction: I wrote: “1M USP’s and their families”. I should have written “citizens and permanent residents of Canada”.
@bubblebustin, add to that number all of the Canadian immigrants to the US. What’s the number?
Cannot happen. There will be a revolution.
Do you think Elizabeth May is going to go quietly about this?
@Joe Smith, Sorry to say, but I think it IS happening.
All hope abandon, ye collateral damage who have clung to every passing floating straw, for the past year and a half. Colonialized Canada is a resource extraction monster, and a foul toadie that masquerades as nice and different, and fools most of the people most of the time. Do not rely on the Charter of Rights and Freedoms. Do not rely on the human rights orgs. Do not rely on the civil liberties outfits. Do not put your hope in mainstream media. Do not supplicate your politicians who will not stand for you. The mostly phony opposition enjoys the position of grandstanding against what they would have to support if they held the power – aka playing a role in the farce called illusion of democracy. You have obtained an education in how the world works, an education that often passes the relatively privileged by. Sauve qui peut.
@usxcanada,
Thanks, now I am depressed – not deluded though. 🙂 It has ONLY been a matter of months since I received my FATCA education (not a year and half), so I have had less time to fret than a lot of others have, but I fear it is going to be a matter of years before FATCA and US citizen-ship based taxation can be talked of as a thing of the past.
Joe Smith, though I love his attitude reminds me of my husband’s reaction when I first told him about FATCA. He was actually angry with me for my initial OMG freak-out moment, and told me that there was no way Canada or the banks would go along with it because if they did then the world was truly a crazy place. This spoken from someone who has never really had anything ‘bad’ happen to them, even though he has seen me get the short end of the stick on more than one occastion – FATCA being the latest. The world really IS a crazy place, where bad things happen to good people. Canada is not different.
Something else with growing clout and attention of FinCen.
Big banks vs. Bitcoin libertarianism
@Mark Twain
Thanks for the link to the Bugle. I had listened to them for a long time, until Murdoch kicked them out of his media group for taking the mickey out of him. I see they continued life on Facebook. They are a hoot.
The real question is where does the NDP come down on this. Can they be twisted into supporting this. I will also add the need to introduce the legislation before the House of Commons is not inconsiderable especially as this step has been one that has stalled previous government initiatives in the past.
@ All
Arrow has given us a heads up so now it’s time to get our heads together and think about what to do next.
Right now my head is still in muddle from working on taxes (Canadian and American) which are not nearly done yet. This year we also have the final tax to do for my husband’s American mother who passed away last year. The mound of forms on the table just keeps growing and growing. Although my husband actually drove down to the USA to get the 1040s, instructions and some forms we’re finding we have to print out a bunch too. That means very soon a trip to the nearest city to buy ink for the printer. I think this is why we are fighting the good fight against the US tax system. We all hate the thought of going through this insanity for the rest of our lives.
Sadly, my mother passed away last week. She was receiving social security in Canada and when I called them to cancel her direct deposit, the agent told me that if she receives an overpayment, Treasury has the ability to reach into her Canadian account and retrieve the overpayment. I said that was kind of scary and he said that its allowed for under the treaty and only under certain specified circumstances.