The Canadian IGA says:
Accounts under $50K are not reportable “unless the FFI elects otherwise”.
Accounts with unambiguous US birthplace are reportable by the FFI “unless it elects to apply subparagraph B(4)…” (which is to try to cure the indicia).
The CRA draft guidance says:
The CRA expects that financial institutions will generally attempt to cure indicia before determining that an account is reportable.
I persisted with my own financial investment advisor, saying I wanted none of our information to go to the CRA as we have CLNs (US-ness was known) and finally got this statement:
I have reviewed all of your documentation that I have for you here and in all of this; I have only noted Canadian Citizenship. Given this, yours and XXX’s status would be noted as Canadian Citizens only with no indication of indicia on record, therefore TD would be reporting to CRA for you as per every other Canadian Citizen.
Comments from persons I’ve been communicating with in Israel:
Well on Monday will be the last step for my wife and I to finally be Extricated from US Person Status at Bank Discount. I will be going in to sign a W8-ben and pick up the W9s we were forced to sign last year.
I was not able to convince the bank to do this on my own, they told us we were US Persons forever by staff at the main branch if we were born in the US regardless of having CLNs backdated to 2005.
I filed a complaint with the Bank of Israel 3 months ago which outlined our status and the reaction we got at the bank. I also requested they educate my Bank and help them develop procedures for persons with our status.
A few weeks ago Bank of Israel (The Federal Reserve Bank of Israel) contacted me to say they were working on my case.
Beginning about a week ago, we began to get a string of phone calls and Faxes from at least 3 persons working together at my Bank who were working on getting our status corrected. We provided some copies of paperwork to them via fax and answered a couple of follow up questions.
At least now we will be fully extricated, and there will be a procedure at Israel’s Third largest Banking Chain for others who are in the same situation.
***********
While the two largest banks in Israel have processed family members of mine out of US Personhood without problems we found that it’s not universal, that some banks may not remove your account from those being reported despite evidence of a CLN.
The Bank has the OPTION of deciding if it wants to attempt to “cure” that indica. The IGA provides legal cover for the bank that does not want to cure the defective indica.
So the procedure is to AUTOMATICALLY report accounts based on US place of birth REGARDLESS of actual Citizenship.” A bank is under no obligation with the IGA to look at a CLN or even ask for one. I did not get this figured out until this week after seeing some posts from Israel on IBS. Then I looked at the document again and it was shazam.
I did an experiment with a major UK High Street Bank. To open an account online they ask both citizenship and place of birth. If you have a CLN then you are absolutely not a US Citizen. But I could see that programming as problematic. There was no question, “Do you have a CLN?” So I call the number to open an account by phone. Get passed along three times but get to someone who knows FATCA. I was advised that this bank would report any account I may open regardless if I gave them a CLN because I would be declaring a US place of birth. It did not matter to them that a holder of a CLN was absolutely not a US Citizen. The individual explained further that this bank was not making the election in the IGA to cure that defect and that I would have to take this up with HMRC.
In some ways it’s better in Israel. At least here, they say sign a w9, waive your privacy rights, or we close your accounts. It gives those Americans a choice.
@Anne Frank, well written. Let me make a few comments as they are certainly newbies around now;
1.) Your statements on existing accounts is likely very true in Canada but not true in much of the rest of the world.
2.) Someone who has relinquished needs to create a very detailed record outlining their relinquishment, particular if they are an Undocumented Relinquisher as in no CLN. But as shown here on IBS, a CLN is not a requirement to show that citizenship has been extinguished per the Expatriation Act 1868 and US Code.
3.) No one, documented or undocumented, should ever refer to themselves as a “Former US Citizen.” That term is meaningless, you are Canadian or French or Irish or…..
4.) Every relinquisher that may be opening a new account would best be served by looking online to see if Place of Birth is a question that will be asked. If its going to be asked, find a different provider.
5.) If you are a long term US expat with no urgent and immediate plan to become a citizen where you live, you probably should take advantage of streamlined 2.
@mach73, “If you have logged out of the system and possess a CLN…your information is NOT going to be sent to the IRS (through the CRA) by any Canadian FFI. Even if this was a remote possibility, the banks CANNOT just sent your information without having confirmed or denied your US Indica. This means some form of communication with you, and your proving your status as a pure Canadian with a copy of your CLN.”
This is true for a former US Citizen who was born outside the USA.
It is not necessarily true for a former US Citizen with a US Place of birth.
The IGA does NOT require a financial institution to “cure” the finding of any indica.
The IGA does require reporting if indica is found.
I tested this concerning the UK IGA, which mirrors the other IGAs. I phoned the help desk of a common London High Street Bank that has online account opening.
High Street Bank asks for nationality and country of birth, by country name.
But there is no online mechanism to put a cross in a box that says you renounced/relinquished any US Citizenship.
So I called them up.
After being passed around many times I spoke with a person who seemed to know exactly what they were saying.
The response was that High Street Bank was not going to elect the option to exclude accounts below $50,000 nor were they going to elect to cure any indica.
When I looked at the IGA again reading slowly, shazam the person on the phone was correct and it is optional.
@AnneFrank:Thanks for trying to bring calm. However, the banks and credit unions are showing no signs of using the wiggle room CRA handed them on a silver platter.
CRA Guidelines make it clear. They are not required to ask for place of birth. Yet TD and possibly others have said they will do that. Some are asking Are you a US citizen or about “other citizenships.”
The FIs could have easily followed the CRA Guidelines. That would have helped to reassure their customers. By asking citizenship and POB questions, they are sending a clear message.
@Anne Frank, my disagreements would be as follows;
I think more people will be caught up in this than you think, people do not know. Joe and Jane Maple will be innocently caught in the net when they are asked place of birth and instead of knowing to walk away will move forward opening an account. Joe and Jane will rightly state their nationality as Canadian as that is what they believe but they will also say they were born in Albany, NY.
But others will continue to fly under the radar not realizing they are flying under the radar.
@Blaze, yes and I think its the compliance industry. I have been appalled to see what questions Canadian Credit Unions are asking when they clearly are considered Registered Non-Reporting Deemed Compliant.
A RNRDC should have been business as usual and only making a note if someone presents a US Passport, self identifies as US, or presents a Canadian Passport with an unambiguous POB.
@George,
This is what I think too.
@George,
Re: my prior comment, I was referring to Joe and Jane Maple, innocently telling TNL@B where they were born. I suspect that most Canadians with a US birth place, ARE STILL UNAWARE.
@White Kat, didn’t John Richardson some time ago say the most frightening question in the world is “Are you or have you been a US Citizen?”
I feel so bad for the “UNAWARE.” Seriously, this is something that Stephen King could have put in a book.
The “UNAWARE” will likely be 40/50 somethings who have some financial sense and might be chasing bank rates or looking at a lower cost investment house. In that quest for lower fees or a higher interest rate, it will be lights out. They might also be “proud” of the novelty that they were born in the USA even though they never consider themselves US Citizens and likely never held a US Passport.
Don’t underestimate the number of people who simply cannot bring themselves to be anything other than honest and forthright with their banks, even if it means self-harm. Many people are afraid of being caught in a lie or coverup down the road. I personally don’t have the stomach for it, and I can only assume others won’t either.
As a further data point – Standard Chartered in Thailand is sending out notices and forms to all identified US Persons – the individual who told me about this said he tore the forms up but also said he has been filing and paying his US taxes for the last 15 years.
Scarlet Letters pinned on those suspected to be US Persons on a planetary scale. It’s the equivalent of a financial 1939 Nazi hunt. Sickening.
@Steve
What really sickens me is the hypocrisy of polticians who condemn the atrocities of past and present wars, dictatorships, violations of human rights, etc. etc., – but see absolutely nothing wrong in handing out yellow stars for “US persons” to wear…
I’m posting here on behalf of one of our Brockers in Israel who, unfortunately, is having the same problem that others have had in posting comments here. I have been communicating with two persons there on a couple of mutual issues.
Hmmm, “ignore the IRS” – seems that is what the U.S. is making sure we do not do. It does, though, jive with some of the talking points that we’ve gotten from Conservative MPs in Canada, like saying that Canadian registered accounts are exempt (they are exempt for the banks; not so for the individuals). Seems even as if our governments are saying to us that they condone “tax evasion”. How are we to process these obvious contradictions in our brains?
@all,
I’ve read through the IGA and enabling legislation as well as the comments on this site and am
really perplexed about if and how to “cure U.S. indicia”. I have a CLN but don’t see a simple answer as to if it is better to present it to the local bank manager now or wait and see IF the bank contacts me
first. Here is the situation : Opened a high interest account about 10 years ago at BMO and the bank person filing the application asked if I was Canadian. Since I wasn’t at the time I honestly answered no, that I was U.S. citizen. She indicated that on the form, but I don’t remember her asking for my
SSN or filling out a W-9 form. A few years later I closed that account. I still bank with that branch and I never was asked about citizenship on any accounts that were opened prior to that one and I’ve opened no new accounts since and I never gave them any ID that had a place of birth. Now I’m wondering if they
do a records search if the U.S. citizenship will show up – how far back will the search go? If it does,
should I come forward now and show them my CLN and CAD passport?
Any IBS people who have renounced citizenship & gone to their bank with their CLN? If so, do you feel reasonably certain that the bank has “cured” your U.S. indica?
FATCA IGA Scoreboard – June 2014, Thailand joined the list with FATCA “agreement in substance” that the US Treasury Department will consider to be IGAs in force.
Updating Steve’s last data point comment with:
FATCA Form for SCB Financial Group, Thailand
I was / am interested, Steve, and I agree with you when you say:
Part 3, Information Disclosure, is real bullshit, especially if you provide the bank with a CLN. This is why the complaint needs to go to the UN Commissioner for Human Rights and every other major human rights and civil liberties organisation on the planet.
FATCA is pure abuse no matter how anyone tries to colour it otherwise. It must be stopped.
Thanks to America, it’s open season on Americans around the world.