I have read with interest the claims that this is a “good deal” because it provides “reciprocity” to the Canadian government. This is not true, according to my investigations. Anyone who believes this is true should check out a post by James George Jatras on his RepealFATCA.com website. Check out the links to the two letters at the top of that page. Following is an excerpt from the article written by Mr Jatras in July 2013:
Without this new authority, on which the Congressman’s letter pronounces what amounts to a veto, Treasury cannot deliver on promises of “equivalent levels of reciprocal automatic exchange.”
And without imposing “equivalent levels of reciprocal automatic exchange” on domestic U.S. banks, credit unions, and other institutions, Treasury cannot pretend that IGAs are anything but a one-sided, extraterritorial diktat that foreign governments enforce FATCA to the detriment of their countries’ institutions, taxpayers, and consumers, and in violation of their sovereignty.
And without the IGAs, FATCA is unenforceable.
Thus, by sounding the death knell for reciprocal authority, Congressman Posey is sinking the IGAs, and in turn FATCA itself.
I don’t pretend to speak for Mr Jatras, but I assume that when he wrote this he could not conceive that any rational foreign government (including Canada) would sign IGA’s knowing that there will be no reciprocity. How could any responsible government agree to a deal that the American’s themselves recognize as violating that nation’s (Canada’s) sovereignty?
Couple the foregoing with the recent IGA negotiated by Canada. Reciprocity is addressed on page 16 under Article 6, and here is what the US promises in return for the Canadian banking information:
Reciprocity. The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.
The US “acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange”? Nowhere does it say they will actually reciprocate, just that they acknowledge the need to reciprocate. I believe the Canadian government knows the foregoing to be true and could, in effect, block this whole thing by demanding the US actually reciprocate. In other words, the US is forcing legislation on Canada that cannot pass muster within the US itself. This agreement is wrong-headed to begin with, but for the Canadian government to capitulate on this without demanding exactly the same in return is mind-boggling. If you are going to sell us out, at least sell us out for something!
To pretend this is a bilateral agreement to catch tax cheats is disingenuous. This was outright extortion by the US and the Canadian government capitulated. Under the threat of financial penalties, the US demanded banking information in violation of numerous Canadian laws. Canada is giving them the information, and there will be no reciprocity.
I am no lawyer, but I can read. I may not be very smart, but I am smart enough to know when I have been knowingly sold out by my own government. A simple demand for complete reciprocity would likely have killed this deal, and how could the US blame anyone but themselves? Why should we give them information that they will not give to us?