I am delighted to report that Jim Jatras has filed a Freedom of Information Act request for all US documentation of negotiations between the governments of Canada, Switzerland and the UK and the US for a FATCA IGA.
We can’t get information like this in Canada from an Access to Information request, because more than 30 years ago Parliament, in the enabling legislation, excluded from access all intergovernmental correspondence and related files. Not necessarily so in the US, it seems. And if we can get our hands on this information, no matter how long it takes, we can and will distribute this to the opposition parties and our media.
So, Jim Flaherty and the CBA, if you’re watching — if you aren’t playing fair ball and protecting Canada’s sovereignty, banking and privacy laws and the Charter rights of ALL Canadian citizens and legal residents, we will find out. And if you weren’t playing fair, you will pay the price and it will be your legacy.
Think about that very carefully. Be careful what you wish for and what you sign.
You’ve been warned.
Thank you Jim Jatras! We owe you, at least a great Canadian brew, if you’re ever in town!
Source RepealFatca.com | filed in News | Author James George Jatras for RepealFATCA.com
As noted previously, FATCA (the “Foreign Account Tax Compliance Act”) cannot succeed unless the U.S. Treasury Department is successful in coercing a sufficient number of countries into enforcing this foreign (i.e., U.S.) law on themselves. The key mechanism for doing that is to impose legally questionable “intergovernmental agreements” (IGAs) that effectively gut the sovereignty of the “partner” country and force indiscriminate turnover to the IRS of personal financial information in abrogation of national privacy and data protection laws, all under false assurances of reciprocity.
On Monday, October 7, RepealFATCA.com filed a request under the Freedom of Information Act (FOIA) with Treasury to provide copies of records in connection with negotiation of IGAs with the governments of Canada, Switzerland, and the United Kingdom. The request covers “all departmental records (paper or electronic) concerning communications (emails, paper correspondence, or records of in-person meetings) between Treasury officials and officials of the three foreign states indicated above relevant to negotiation of IGAs with such foreign states, as well as departmental records concerning worldwide implementation of FATCA that may be relevant to the IGAs with any of the three foreign states indicated.” (The full text of the FOIA request is provided at the end of this bulletin.)
The RepealFATCA.com request comes at a crucial time. Of special note:
Canada: As previously reported, Murray Rankin, the “Official Revenue Critic” of the progressive New Democratic Party (NDP), the chief Opposition party to the Conservative government of Prime Minister Stephen Harper, has written to Finance Minister Jim Flaherty urging rejection of any IGA with the United States that isn’t an equitable deal or that violates the rights of Canadian citizens and residents. The NDP’s Shadow Prime Minister, Tom Mulcair, has since upped the ante in a letter to voters, endorsing Rankin’s stand and even mentioning the dreaded “S”-word: “sovereignty”! Effectively outflanked on populism, human rights, and Canadian sovereignty by the NDP opposition, Flaherty – who doesn’t hide his dislike for FATCA and for Treasury’s intransigence – and the Harper government find themselves in a difficult position. It is not clear how they can rescue a Canadian IGA (no matter how much pressure some powerful financial interests might apply), and at this point they may not want to. More importantly for FATCA’s evident global infirmity, it is even less clear how Treasury credibly can move FATCA without Ottawa’s capitulation. A public protest against FATCA will take place on Parliament Hill on October 16.
Switzerland: On October 3, a group of citizens’ organizations launched a drive for a referendum to nullify the non-reciprocal IGA with Switzerland, which has already been approved by the Swiss parliament. While reported in French, German, and Italian language Swiss media, little has appeared in English and details are still sketchy. The organizations need to collect 50,000 signatures, which is considered doable, for a national referendum in early 2014 to overturn the Swiss IGA. If the signatures are successfully collected and the vote takes place, there’s a good chance the IGA would be voted down, annulling it under Switzerland’s unique brand of direct democracy. The result would be that one of the few significant financial centers that Treasury had considered “in the bag” would be – poof! – back out, for good.
Despite legal exceptions for protected materials, FOIA requests have been used to good effect (by groups like the Electronic Frontier Foundation and the Electronic Privacy Information Center) even on as sensitive an international topic as NSA surveillance programs – a related matter, since FATCA data provided to the IRS would be passed on to U.S. intelligence agencies. Treasury has little excuse to withhold information indicating what promises and threats have been made behind closed doors, hidden from the American and international public, to induce reluctant foreign governments to sign one-sided FATCA “deals” that will cost their consumers hundreds of millions, if not billions, of dollars to pay compliance mongers ready to cash in. (For example, the view of one Miami tax attorney: “From the perspective of a U.S. international tax attorney, we love FATCA for four reasons: complexity; uncertainty, with all the changes since 2010; change, with all the amendments and reforms to the law; and fear-mongering.”)
Finally, as illustrated by the situations in Canada and Switzerland, the RepealFATCA.com request comes at a time when the wheels seem to be coming off the entire IGA process in the face of grassroots citizens’ resistance (even taking into account an announcement that Paris would sign an IGA on October 11 – but according to unconfirmed reports has been delayed by the partial U.S. government shutdown!). This was tacitly admitted by Treasury’s issuance of a purported “myth”-busting analysis last month, a stack of tall tales that has been thoroughly debunked. (See Lynne Swanson and Victoria Ferauge, “FATCA Reality Check,” Tax-News, October 9, 2013; and “FATCA: We Are Not Myths,” OpEdNews, October 6, 2013).
James George Jatras
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The full text of the FOIA request letter follows:
October 7, 2013
Freedom of Information Act Request
Freedom of Information Officer, Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
VIA EMAIL and U.S. MAIL
Dear FOIA Officer:
This is a request filed under the Freedom of Information Act seeking copies of records in connection with negotiation of “intergovernmental agreements” (IGAs) by the U.S. Department of the Treasury (hereinafter, “Treasury”) with the governments of Canada, Switzerland, and the United Kingdom providing for implementation of the Foreign Account Tax Compliance Act (FATCA) in those countries.
Please provide copies of all departmental records (paper or electronic) concerning communications (emails, paper correspondence, or records of in-person meetings) between Treasury officials and officials of the three foreign states indicated above relevant to negotiation of IGAs with such foreign states, as well as departmental records concerning worldwide implementation of FATCA that may be relevant to the IGAs with any of the three foreign states indicated.
Date range of this request: (a) From the earlier of January 1, 2012, or the time prior to the February 8, 2012, “Joint Statement” with the United Kingdom and four other European states (found at http://www.treasury.gov/press-center/press-releases/Documents/020712%20Treasury%20IRS%20FATCA%20Joint%20Statement.pdf ) when the Treasury Department began preparations for contact or communication with officials of the United Kingdom in relation to such “Joint Statement”; (b) to the date of this request.
Request for “news media” status: As editor of RepealFATCA.com, I am a “representative of the news media” for fee waiver purposes as “any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience.” Based on my status as a “news media” requester, I am entitled to receive the requested record with only duplication fees assessed. Further, because disclosure of this information will “contribute significantly to public understanding of the operations or activities of the government,” any duplication fees should be waived.
Request for Expedited Processing: This request warrants expedited processing because it is made by a person primarily engaged in disseminating information, and it pertains to a matter about which there is an urgency to inform the public about an actual or alleged federal government activity. This urgency is particularly applicable to Switzerland, where a public referendum is pending, and to Canada, where IGA negotiations reportedly have reached an impasse.
Mode of delivery: To facilitate the timely fulfillment of this request and to moderate Treasury’s burden of paper documents, any portion of the requested records which Treasury may have in electronic form may be emailed to me, with the rest sent by U.S. mail, per the contact information appearing above.
Please acknowledge via email your receipt of this message, and indicate an anticipated timeline for fulfillment of this request. Thank you in advance for your prompt attention to this matter.
James George Jatras
Re “Do you have an opinion on whether implementing the 30% withholding penalty due to the absence of an IGA would violate NAFTA?”
I’m not a trade lawyer, so I don’t really know. But it seems to me that under NAFTA, as well as WTO, there likely would be problems even before we get to withholding. On its face, FATCA discriminates between US and non-US firms, placing a regulatory burden on the latter that it does not place on the former, specifically because the foreign firms are foreign. Or put another way, it’s a an explicitly discriminatory measure against non-US firms. Add to that (getting back to the 30%) penalizing them for not complying with that discriminatory measure for disobeying a US law (for which no jurisdiction exists) and obeying Canadian law (which does have jurisdiction). It seems to me that a smart trade lawyer could have a field day.
Thanks for your kind words.
This blog asks a very important question.
And the ACA keeps on trying. Bless ’em.
Thank you. I was thinking that with a population of 35 million, 1 million people taxable to USA would be very damaging to Canadian revenue also. Thats a huge chunk of the general population and lots of money flowing out of the country. That also is 1 million people ready for a class action suit!
But it is my general opinion that FATCA, once implemented, will widen it`s definition of “american” and tax everybody who has any dealings with America altogether. LIke the NSA once was supposedly just used to ferret out terrorists and is now used for industry espionage.
@Jim Jatras, thanks for doing this. I’d be happy if you forward to me anything that you get about Switzerland.
Jim – I would be quite confident the withholding done at the Bank level (against recalcitrant financial institutions) would violate NAFTA and GATT since it denies “national treatment” to Canadian banks in US. However, were it upheld in the US, it would be pretty simple to impose a reciprocal tax on US institutions in Canada. Last I looked, US direct investment in Canada is many times larger than Canadian investment in the US with the result that I can see little practical difficulty in imposing such a tax and rebating the proceeds to any Canadian banks affected by the US tax as a credit. It would be pretty childish and self-defeating for the US to do it, particularly if Canada were to credibly threaten to retaliate. Perhaps a Private Members Bill by Elizabeth May to that effect might help make the point about how easily Canada could retaliate for our belligerent cousins? More to the point, however, my recollection is that the declaration that an institution is “recalcitrant” is not automatic. If Banks were forbidden by the Charter to turn over the data or to refuse to deal with Canadians who are also “US Persons” (as is the law of the land today), it would take a positive act of the US Secretary of State to declare them “recalcitrant” and start to enforce the withholding tax. That would be tantamount to declaring trade war on an obviously innocent party. Personally, I don’t see them having the stones to go that far if Canada or our courts held the line. An American lawyer can opine as to how enforceable that would be under domestic law, especially where the non-compliance abroad would be a breach of a million statutes and the Bill of Rights if attempted in the US. As I have noted before, imagine if the US required ALL banks domestically to gather and remit data, including detailed financial data of ALL non-American born legal residents with the authority vested in the Secretary of State or IRS to turn over any and all such data at will? Does Sri Lanka want to know about Tamil refugees account activities? Does Eritrea want help in exacting its diaspora tax (presumably at a future date when the US decides they are allies and not rogues)? Maybe China or Russia would like to know what their former citizens are up to? Just stating the question is to answer it – the proposition is simply laughable. No Congress would enact it and no court would enforce it.
By the way, Citibank, Amex Bank, Bank of America among others all have bank branches and carry on business in Canada through Canadian affiliates that are as bound by Canadian rules of confidentiality and non-discrimination as any other Canadian bank. Remember, FATCA has two roads to compliance: turn over the data or get rid of the clients. They would be opening themselves up to fairly significant liability in Canada were they to close accounts and refuse to deal with Canadians of US ancestry as FATCA would require them to do outside of the US.
The US is in a weaker position than its allies give it credit for. Just saying no was always a viable option. That being said, the US demands are so extreme that I think they ought to make the courts’ job pretty easy in finding that they cannot be complied with under the Charter and that may be exactly what the Government of Canada was banking on. It doesn’t help European banks or their customers who are being crushed by this stuff, but if Canada spits this out, others may find their backbone stiffened.
I know you’ve speculated before that the Canadian government might just secretly be hoping the FATCA IGA faced a court challenge, but then why did John Weston MP get all sales-y on his constituents by saying he’s thrilled about the IGA when he didn’t have to say anything about his feelings at all?
@Bubblebustin, I have a feeling Mr. Weston may regret having shared his ‘feelings’ so enthusiastically with the Brocker who helped make his response rather famous here at Brock.