Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 30 Comments

Like most other Canadians, I was outraged to learn that the Royal Bank of Canada has been laying off IT workers and replacing them with temporary foreign workers, with the intention of outsourcing their IT functions overseas. I was ever more outraged to learn in today’s news that RBC is not unique among Canadian chartered banks in doing this; several other members of the Canadian Bankers Association also stand accused in the media of the same practice, by some laid-off and even current IT workers from several banks other than RBC (specifically, CIBC, TD, Scotiabank and BMO).

See: Outsourcing bank jobs is common practice, say employees:  CIBC, TD, Scotiabank and BMO replaced Canadians with temporary foreign workers, claim hundreds of emails

Am I the only person who is wondering whether there is a connection between the outsourcing of the banks’ IT functions to less-expensive overseas contract workers, and the indications we hear of the banks’ preparations to comply with FATCA (which will entail some extensive and expensive IT systems work in these banks)?  Outsourcing all that IT work could help reduce the costs to the banks of rolling over and complying with IRS invasion of our citizens’ financial accounts.

Is it the case that not only are the banks preparing to throw Section 15 of Canada’s Charter of Rights and Freedoms under the bus, as well as the account information on thousands upon thousands of Canadian citizens’ financial information to the tax agency of a foreign country, but they also are laying off highly-educated and highly-trained Canadian IT workers to boot in order to achieve this, even requiring those workers to train their under- or un-trained replacements in Canada before those workers go back to where they came from (and where Canadian privacy, banking and Charter rights don’t apply as those workers will be on foreign soil)?

And what will the outsourcing of IT functions overseas do to what remains of privacy, secrecy and security of Canadians’ financial information – of ALL Canadians, not only those of US origin?

I am writing today to my MP to ask these questions.  I urge you all to do likewise.  I would like some clear and believable answers.  (No, I am not writing to CBA. I want an answer I can believe, and I think that Question Period in the House of Commons, followed as appropriate by a federal government investigation to get answers, is the only way that’s going to happen.  CBA is not going to have any credibility with me on this one.  I believe what fellow Canadian workers are telling CBC, not the insipid denial by that RBC official.)

Over past months, some of us have wondered how to get our fellow (non-US-origin) Canadians interested and upset about FATCA.  If my suspicions about the answers to the above questions are correct, I think this could be a real doozy of a way to raise public awareness and concern about FATCA, US violation of our sovereignty, and possible complicity in same by our financial institutions.

I was born and educated in the US. After completing my post-graduate education, I entered Canada on a temporary work permit, moving to Canada because of the Vietnam war. Shortly after unpacking, I applied for landed immigrant status. A few months later I received in the mail an induction notice from the US Army; I drew a peace symbol on it in felt marker pen and mailed it back. As a result, I was indicted and a warrant was issued for my arrest (both were quashed in 1977 by the Carter amnesty). I became a Canadian citizen in 1975. In 1976, for the US Bicentennial I wrote a political letter to Henry Kissinger, then Secretary of State. In it I mentioned that I had "renounced" (I didn't then know of "relinquish") my US citizenship on becoming a Canadian, explaining in several pages my reasons for leaving the US. I also mentioned the fact that on my mother's side I am a descendant of a soldier who fought in Washington's army during the US rebellion, but now I was declaring my personal independence from the US and rejoining the British Commonwealth. Within six months, I received by mail a CLN recognizing my having expatriated myself from the US in 1975. I filed away my CLN and forgot I had it, until I found it after searching for it upon learning of FATCA and OVDI in August 2011. Since then, I proudly keep a photocopy of it with my passport (which is Canadian; I have never had a US passport in my life, nor will I ever). As a Canadian who long since ceased being an American and who has a CLN, I am not directly affected by FATCA or other US taxation outrages. However, my wife and several of her friends are affected, until their relinquishment CLNs (dating from 30-40 years ago) are issued. Also I have several close friends who were born in Canada of US parents and are considered by the US to be US citizens, though they have never lived in the US, worked there, earned income there, held property there, held US passports, or in any other way excercised USC and are horrified they might be considered US. I am active on this website and in writing my elected Canadian politicians about these issues, on their behalf. I am a retired former employee of the Government of Canada who faithfully and proudly served his adopted and adoptive country for many years. Updated September 2, 2012: earlier this week, my wife finally received her relinquishment CLN, State Department formal recognition that (in their exact words on the CLN) she "ceased to be a US citizen on" the date she became a Canadian more than 35 years ago. Mission Accomplished, to borrow words from my least-favourite contemporary/contemptible American. I will continue to monitor this website from time to time to see if I contribute useful information or opinions, but my wife and I are determined to regain our lives after the past twelve months of angst. Best wishes to all of you on this website in your odyssey toward freedom from the US.

30 thoughts on “FATCA and outsourcing of Canadian banks’ IT jobs — is there a connection?”

  1. You are on to something big time. Someone I discuss FATCA issues in Europe has for many years been concerned with European banks outsourcing operations to India and transmitting personal financial information there. Thus in theory a third country such as you know who(the US) could instead of approaching European governments to get financial information could simply go around to the Indian government instead with the effected individual or the government even knowing about it.

    What RBC did is very very sleazy.

  2. Thanks for that tip, Tim. I’ve laundered and forwarded it to Mulcair, my own MP, and Elizabeth May, as follow-ups to the emails I sent to them shortly after posting this.

    That is really chilling, as well as extremely sleazy, and it absolutely must be brought to a screeching halt by our Parliament. There are some IT functions that one should NEVER outsource beyond one’s borders, and they aren’t just the military functions.

    And it isn’t only banking information — what about social insurance numbers and other information that could be used for identity theft. How much control does anyone think some contracting firm in India is going to have over the security of data given to them by our banks? This is utterly unacceptable and goes far beyond FATCA, though (I suspect) FATCA has been part and perhaps the prime motivation for it.

  3. Thanks for connecting the dots so astutely, Schubert. This should be a major concern for everyone in Canada — even the politicians since I don’t see how they could escape the big reveal of their banking information and the possible theft of their identities to those nebulous and possibly nefarious overseas IT workers. I wonder if this could be written up as a press release from Brock like two others were done previously? I’m eager to pass this concern along to my MP but it would be nice to have it all spelled out succinctly in an addendum in the form of a press release. Just a thought.

  4. I sure hope my Swiss Cantonal Bank doesn’t outsource anything like this!

    2.5 more years left till CLN!

  5. Couldn’t RBC run afoul of our privacy laws by conspiring to facilitate this exchange of information?

  6. @bubblebustin Legally yes that should be the case, but if they launder this exchange through India, it could be difficult for the government to get evidence of that, and likely impossible for an individual to be aware of it or prove it. That is why Tim, Tim’s contacts in the EU, I, and (I hope) anyone else who gives this much thought, are very concerned about this outsourcing. The outright treason to loyal Canadian workers and jobs is bad enough, but potential or actual violation (and IMO treason) to Canadian law and sovereignty is that much worse. Hence we should be demanding answers and investigations into this by our Parliament. That’s OUR information the banks are potentially playing loose and dirty with, NOT their information — ours. Any carelessness or loss of security of that information would be a serious breach of trust by the banks, and potentially could result in a loss of confidence in the banks and even a run on the banks. Messing around with financial IT and data, or even seeming to do so, is not something any sane banker should be playing at. Nor is it something any government or finance minister worthy of re-election or public support should be tolerating. Which is why these questions MUST be addressed, clearly and decisively. At least that’s my opinion, which I intend to shout from the rooftops until I get some satisfaction.

  7. Yes, Schubert, your:

    And what will the outsourcing of IT functions overseas do to what remains of privacy, secrecy and security of Canadians’ financial information – of ALL Canadians, not only those of US origin?

    is what ALL Canadians need to think about and answer — do we all, every one of us, think our privacy is important enough to be protected by the Canadian Charter of Rights and Freedoms? Again, what is the purpose of the Charter if not this — does it have any teeth? We all need to answer if we are certain our financial privacy will not be breached in turning it over to any other country’s banking industry, even if a segment of ours, or to the IRS — India or the USA? And then there is the question of security / chance of compromise for fraud (we know that exists within the IRS!).

  8. And, speaking of a run on the banks, and reinforcing numerous blog posts you can already see springing up like mushrooms on the CBC coverage of this story, NOW is a good time to pull your assets out of any Canadian chartered bank and move it over to a local credit union. Do it now, before the run really hits. And go to credit unions — depositors are share-holders and voters and owners of the credit union, the management and staff of those credit unions are directly answerable to you the depositors, and I can’t believe any credit union in Canada would be so monumentally stupid as to outsource IT and data management beyond our borders, nor that shareholders in such a credit union would sleep-walk through that and let the credit union’s management do something that utterly dumb. Banks are another story, with their grossly-overpaid out-of-touch management who account only to shareholders who own stock, often live outside the country, and aren’t you, the depositor. Get out NOW. Make ’em squeal where it really hurts. You have a choice and a lever here; use it, and encourage everyone you know to do likewise.

    Unless someone in Parliament comes up with a clear and decisive action to stop this outsourcing of IT and surrender of our data to ANYONE outside our borders, PDQ.

  9. I didn’t know where to post this but because this thread deals with immigration. I was suprised to learn that high net worth immigrants can move to Canada and under certain conditions avoid paying taxes for 5 years. They can actually work for 5 years and leave without paying taxes if they set up a trust.

    I was quite frankly outraged, that this is happening when people who have paid all their taxes owing in Canada are being called tax cheats.

    http://www.cramagazine.com/issues/fall01/article03.html
    http://www.russcanada.com/tax-break.php
    http://www.ocra.com/services/canadian_immigration_trust.asp
    http://www.cicnews.com/2010/02/immigration-trust-year-tax-holiday-canadian-immigrants-02768.html

  10. I am trying to find some more specific information for Schubert. There is actually a lot of information on the web about this but it is basically all by lawyers telling banks how to violate the spirit of the law while complying with the letter. Our “friend” in the EU MEP Sophie In’t Veld has been dealing with this issue in the EU for years without any specific legal resolution. I am trying to find something we can send to Canadian media that will light a fire under them.

  11. @downtherabbithole

    This has been longstanding Canadian tax policy dating to at least the Trudeau era. In the UK they have a similar law except it is lifetime instead of five years. In the UK these individuals exempt from tax are called non-doms. They are usually incredibly rich.

    http://en.wikipedia.org/wiki/List_of_people_with_non-domiciled_status_in_the_UK

    Typically if they want to directly get involved in UK politics they are forced for PR reasons to “give up” their non dom status. One of the issues in the UK is children of UK Immigrants inherit their parents non dom status too. Additionally non dom status DOES NOT prevent someone from getting a knighthood or lordship.

  12. Originally non dom status was intended for rich people from parts of the British Empire like Canada who wished to the move UK after becoming super rich while being able to shelter their income from Canada/Australia/NZ(all British dominions at that point in history) from British taxes. Lord Strathcona, Lord Beaverbrook, and RB Bennett all names you should from your Canadian history class were all non doms.

    http://en.wikipedia.org/wiki/Donald_Smith,_1st_Baron_Strathcona_and_Mount_Royal
    http://en.wikipedia.org/wiki/Max_Aitken,_Lord_Beaverbrook
    http://en.wikipedia.org/wiki/R._B._Bennett

  13. Corrected Non Dom status DOES NOT!! prevent one from being Knighted or appointed to the House of Lords

  15. Thanks Tim for this info. So these people are tax exempt?? and they pass this “privilege” on to their children?? In Canada Even if it the exemption is only for five years, that could add up to a sizeable amount of money lost to the government -depending of course on how rich you are . I guess we were born into the wrong family and the wrong country LOL 🙂 (and poor too!!)

  16. No in Canada you cannot pass this on to your kids. Its five years and done and only for the first generation immigrant. In Britain it is lifetime and you can pass it on to your kids(Even if your kids are born in Britain and spend their entire lives in the UK). Canada’s policy is to remain reasonably “competitive” with Britain.

  17. Maybe a few of these ‘legit’ accounts make up many of those assumed to belong to offshore tax evaders in our journalist’s raid?

  19. We are lucky that we know what we know. A lot of people are clueless about what Western governments are doing, but we are not. I saw the Cyprus situation coming because it is a lot like FATCA – an attempt to seize assets. So, when they stole the money in Cyprus, I didn’t blink an eye. Human rights no longer matter in the West. There is no rule of law – it is only imaginary. People in the West see the past as what the future holds even though they suspect things might change for the worse. They are in denial. Governments keeping their high paying, tax-funded jobs is the number one priority of the Western elites. They cannot make intelligent decisions because they only care about the short-term – power and being re-elected, so they attack the populous in shady ways using the IRS and secretive agencies. In the US, they are trying to do away with the Second Amendment – the right to bear arms, but they were unable to. The first thing the Nazis did in Germany was to take everyone’s weapons. Once that was accomplished they could easily round up people. After rounding them up, they stole all their money and assets, then…..we know the rest of that horrific story. I am not suggesting an extreme case like that. However, something similar is not unthinkable at this stage. I am one hundred percent convinced that Canada is hiring foreign IT workers so that the Canadian people don’t get wind of what is really going on in those banks. But you can get around them. Simply find out who the foreign companies are that are being hired. Find a worker and pay him under the table to tell you. You cannot go to the media and explain because the media are controlled by the government. But you can make personal decisions based on the knowledge that you have. I am not paranoid. I am a realist. FATCA is an Orwellian nightmare that has come true. What more proof do you need?

  20. well, IT outsourced internationally is typical nearly everywhere. Most large companies have finance depts and IT depts completely separate. I now work at a company with IT help sourced to Hungary.

  22. further to yesterdays “Big Brother is watching You “ segment :
    IRS using data mining to find non compliant taxpayers, particularly those offshore. Enter the IRS. That’s about as personal as it can get 🙂
    Governments are looking for money and tax cheats (their term) are a key focus. Tax returns are narratives on how people earn and spend their money. With so much personal data out there in our digital footprints – imagine how the IRS can connect the dots on what you tell them and what you actually do. Or in finding those who are evading them completely!
    Richard Satran from U.S. News & World Report has written an outstanding article called IRS High-Tech Tools Track Your Digital Footprint which details some of the things the IRS is looking to do in the near future – it’s comprehensive and for many here @ IBS probably , unsettling.
    Here are some highlights from the article:

    The agency declined to comment on how it will use its new technology. But agency officials have been outlining plans at industry conferences, working with IBM, EMC and other private-sector specialists. In presentations, officials have said they may use the big data for:

    Charting and analyzing social media such as Facebook
    Targeting audits by matching tax filings to social media or electronic payments
    Tracking individual Internet addresses and emailing patterns
    Sorting data in 32,000 categories of metadata and 1 million unique “attributes”
    Machine learning across “neural” networks
    Statistical and agent-based modeling
    Relationship analysis based on Social Security numbers and other personal identifiers
    Officials have said much of the data will be used only for research…..yeah right 🙂 The agency’s economic forecasts and data are a key part of Washington’s budget infrastructure. Former commissioner Douglas Shulman said in an IRS statement that the technology will employ “billions of pieces of data” to target enforcement and to “detect and combat noncompliance.”

    U.S. Tax Court records show that information gathered from Facebook and eBay postings have been used by the IRS in defending tax challenges. Under a Freedom of Information Act disclosure obtained by privacy advocates at the Electronic Frontier Foundation, the group published the IRS’s 38-page manual used to train auditors to search Internet addresses, Facebook postings and other social media to back audit enforcements.
    Taxpayers should know that whatever people do and say electronically can and will be used against them in IRS enforcement.
    Do we still like it !
    So Brockers watch out .

  25. This is an interesting twist. It is often argued that people can make money from FATCA and that it is beneficial for the IT industry. Now, it seems that it is beneficial for the IT industry as long as one is not an American and doesn’t live anywhere near America!

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