Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 45 Comments

There have been recent spat of news coverage of FATCA in New Zealand media after a long drought!

It is coming on the back of the Select Committee consideration of FATCA IGA implementation legislation buried in a “Remedial Matters” bill.  This has been blogged about here with analysis, and here with a plea for comments.   The comment submission process closes tonight.

The media coverage started at Wellington Dom Post by Journalist Ben Heather of ben.heather@dompost.co.nz

It was reported on a NewZealand Stuff report,  Move to Alter Privacy Laws to help US and has generated 176 comments so far.

There then followed Radio National coverage, a close parallel to CBC News and there are several audio links.

FATCA Top Story on the Radio National website
http://www.radionz.co.nz/news/political/235129/government-has-‘no-choice’-over-privacy-info

It was the first story on 8pm news last night:

http://www.radionz.co.nz/radionz/programmes/news-bulletin/audio/2584610/radio-new-zealand-news

There was a segment on the Afternoon panel:

http://www.radionz.co.nz/national/programmes/afternoons/audio/2584581/the-panel-with-penny-ashton-and-susan-hornsby-geluk-part-1

(Note: Segment starts at 08:10. FCC lawyer from PWC gives the party line. As Osgood says, they still seem to think it is about Americans living here.)

Also there was further discussion with Select Committee members…

Interview with David Parker:
http://www.radionz.co.nz/national/programmes/checkpoint/audio/2584601/labour-wants-us-to-hand-over-nzers%27-tax-details

Another clip with quote from David Clark, also on Select Committee:

http://www.radionz.co.nz/national/programmes/checkpoint/audio/2584585/government-says-no-choice-but-to-bend-to-us-demands

Now we wait to see if the NZHerald in Auckland, the nations largest newspaper, picks up the story and expands on it.  I have written both the News Desk and the Editor asking for public coverage.

Factors that helped with awareness is the tireless efforts of @Osgood and the support we have received from James Jatras with this posting about the notice being sent to Ambassador Mike Moore about RNC repeal efforts.

New Zealand Ambassador Alerted to Repeal FATCA Movement, Others to Follow

In the RepealFATCA.com posting is included the text of Solomon Yue’s message to Ambassador Moore.  Needless to say, he has received several tweets about it from me.

Also, today, just out, is this press release by CF&P

CF&P Urges New Zealand to Reject FATCA Compliance Legislation

(Washington, D.C., Tuesday, February 4, 2014) The Center for Freedom and Prosperity submitted testimony in response to open solicitations from the Parliament of New Zealand regarding tax legislation to implement compliance with the Foreign Account Tax Compliance Act (FATCA). Authored by CF&P Director of Government Affairs, Brian Garst, the testimony warned that appeasement of U.S. demands is the wrong approach, suggesting instead that New Zealand should join in efforts to repeal FATCA.

Link to Testimony: http://freedomandprosperity.org/2014/testimony-and-speeches/testimony-to-parliament-of-new-zealand-on-fatca/

So, it has been a busy time working the FATCA awareness side of the equation and it is gratifying to see all this attention that frankly we have Osgood’s efforts to thank for.

Further contact information:

Osgood just sent these other email address for those who might want to communicate directly to Radio National…

afternoons@radionz.co.nz
morningreport@radionz.co.nz
news@radionz.co.nz (a generic news email address)

James Jatras has written to Ben, the journalist that broke the story originally at the Dom Post and got indications of interest in an interview in the future, which would be good.

A couple observations James made to Ben about the Radio National coverage that bear noting.

Some of the commentary and discussion on RNZ was excellent, while others (with all due respect, especially from Mr. Nightingale from PwC) was inaccurate. Note:

·        FATCA does not just apply to “Americans living in New Zealand,” but would violate the personal privacy of an unknown number of New Zealanders in your own country.

·        The pending FATCA agreement is not a “treaty” and is not just an extension of existing tax treaties (as Mr. Nightingale stated) but a new set of obligations imposed on NZ with at best questionable legal status, and no legal obligation on the US side.

·        FATCA is not just about people who are avoiding taxes, and in fact not a single provision in the FATCA statute targets actual tax evasion activity; rather, it is an NSA-style data dragnet.

·        Whatever meagre amount IRD claims enforcement of the pending NZ would cost, it would be far dwarfed by the millions of dollars per financial institution that will be passed on to Kiwi consumers.

·        New Zealand would not receive any useful tax information in return from the US.

·        The trump argument for agreeing to FATCA – the threat of 30% withholding – has no legitimate basis in international law or norms of state-to-state behavior.  It is a threat of extrajudicial reprisal against your citizens, your consumers, and your national sovereignty.

These and other problems with the pending NZ law are addressed in my submission to the relevant NZ parliamentary committee, here.

That’s all for the moment. Now, back to proofing my own submission to the Select Committee and get it up loaded.  13 hours left until the comment ability is removed.

 

45 thoughts on “#FATCA News ‘Breakout’ in New Zealand. Is Stealth coming to an end?”

  1. @Osgood…
    Not a matter of getting there ahead of you. YOu opened the door with the personal contact, and I just tweeted him to support some of the statements I knew you were saying, and he contacted me… So, it is a collaborative effort, and NOT POSSIBLE without your active efforts.

    Now, off to town to watch ’12 Years a Slave’ with another U.S. Person. Somehow apropos 🙂

  2. @Noone…

    Thanks for you input. The Siamese twins thing came to me when my wife took up the Bankers position and I had to set her straight before she swallowed the headline without considering the consequences…

  4. Another story in New Zealand Herald which mentions FATCA

    Brian Fallow: Global economy a tax headache

    As part of that effort, finance ministers from 20 major economies, meeting in Sydney last Sunday, agreed to adopt a regime for automatic information sharing among tax authorities.

    The Organisation for Economic Co-operation and Development (OECD) calls it the Common Reporting and Due Diligence Standard. You can translate that as: “We are going to make your banks tell on you.” (GATCA)

    And not just banks, but other financial institutions, including brokerages, certain collective investment vehicles and some insurance companies.

    Finance Minister Bill English says New Zealand backs the move and the OECD says more than 40 countries have already committed to early adoption of the standard. It is based on a unilateral United States initiative called FATCA (the Foreign Account Tax Compliance Act) that imposes draconian penalties on any US assets of foreign banks which do not supply information the US tax authorities require.

  6. @bubblebustin…

    I guess that means they assume that the IGA will be a done deal and approved by the Parliament buried in that remedial matters bill.

  7. and at the same time, NZ moves away from U.S dollar dominance in an exchange agreement with China…

    ANZ and Westpac are set to become the first Australian banks to support businesses in directly trading New Zealand dollars for the Chinese yuan as the world’s second largest economy continues to internationalise its currency.

    The two banks joined HSBC in becoming market makers after the currency conversion deal was formalised during New Zealand Prime Minister John Key’s visit to China this week. Last year, the Australian dollar became the third currency after the US dollar and the Japanese yen to be directly convertible into renminbi.

    “Today’s announcement will further reduce the costs of trade and investment transactions between New Zealand and China, increasing the ease of doing business for the benefit of business-people in both countries,” New Zealand Prime Minister John Key said in a statement.

  8. @bubblebustin

    I wonder where that article got the information from. The IRD FATCA page does not appear to have been updated since Jan 21.

  10. Obviously, they don’t want this leaking out ….. it might make the current Select Committee process look like a “check in the box”:

    Jim CalvinMarch 24, 2014 at 5:08 pm
    It is not posted on the IRD website. It was circulated via email. Thanks.

  11. In actual practice, what’s happened in most countries is banks kick anyone with a US connection like a bad habit. The expenses for compliance alone are huge.

    I’m surprised that a bunch of other countries aren’t calling their bluff and taking 30% of all assets connected to US banks in retaliation. As an US citizen and resident, this strikes me as a possible tariff agreement violation that could cost us a lot of jobs.

  13. I have tried once again this morning to create an account to comment …. still have not been let through. This seems to be a regular problem with interest.co.nz

  14. The IRS commissioner quoted in the Vaughan article has changed his statement:

    “This law is important because it requires foreign financial institutions governments to tell us about accounts owned by US their own citizens. With this information, we can do a much better job of combating offshore tax evasion reducing our deficit. Our goal is to make it more and more difficult for anyone with an Americans connection to hide keep their money in a tax haven their own country to avoid paying taxes tribute to us,” Koskinen said.

    “The importance of FATCA is not just that we’ll be collecting more money. It is also important because the average domestic American taxpayer has to be confident that, while they are paying their taxes, the very wealthy anyone overseas who we can classify as American, with who cannot afford fancy lawyers and accountants, are no longer able to hide keep their money in foreign their own countries and avoid paying their unfair share to support the operations of the US government,” added Koskinen.

  16. Trying again…

    “This law is important because it requires foreign financial institutions governments to tell us about accounts owned by US their own citizens. With this information, we can do a much better job of combating offshore tax evasion reducing our deficit. Our goal is to make it more and more difficult for anyone with an Americans connection to hide keep their money in a tax haven their own country to avoid paying taxes tribute to us,” Koskinen said.

    “The importance of FATCA is not just that we’ll be collecting more money. It is also important because the average domestic American taxpayer has to be confident that, while they are paying their taxes, the very wealthy anyone overseas who we can classify as American, with who cannot afford fancy lawyers and accountants, are no longer able to hide keep their money in foreign their own countries and avoid paying their unfair share to support the operations of the US government,” added Koskinen.

  17. Contacted Privacy Commission. Apparently no one has considered that not everyone who appears to be a US citizen, actually is (anymore). They have no process to exclude those who are now just plain New Zealanders. So your privacy is definitely not assured even if you exited years ago. Nice one. Anyway, I requested that they consider putting that point to someone, as clearly a mere NZ citizen would hold no sway. We shall see.

  18. @nolongeruscitizen

    Do you have anything in writing from the Privacy Commissioner that you could post? I’m just wondering why they would even be involved in the reporting procedures as it is the responsibility of IRD to provide guidance to FIs on how to interpret the due diligence section of the IGA.

  19. @osgood – no sorry. I approached them and eventually got to speak to someone called Simon.
    I consider it a matter of privacy that the NZ government/IRD are going to release my details when I am NOT a US citizen anymore. I am in fact just an NZ Citizen.
    They have pretty much stated that they are leaving the privacy issues to parliament. I just want them to do is raise it somewhere that it might plant itself in someone’s mind.

    They have published something on FACTA under then News/Pubs section which mentions they advised the IRD in 2013 – suggesting that the make it law to break the privacy law – nice!

    Are you thinking of going to the IRD? I can’t imagine one could make an impact there – but more power to you!

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