I believe that the two Withers LLP employees are absolutely honest, from their perspective, when they made their statement that “FATCA… is just another form”.
Here is their Thanksgiving Message to all of us, a reply from @EmBee, and my short email to one of the employees:
“UK: Who’s Afraid Of FATCA?
Article by Jaime McLemore and Richard Cassell
We are now firmly in the FATCA era and moving on to the post FATCA era. With the first FATCA reports being submitted in March 2015, by now many FFIs have registered and obtained their GIINs, trustees are documenting their trusts, holding companies have entered into appropriate sponsorship agreements, and the financial world is a flurry of W-8BEN-Es and tax status questionnaires. Many have come to the realisation that, although an annoyance, FATCA compliance is manageable. As many of us predicted, for compliant Americans, it is really just another form.
However this has not stopped financial institutions from using FATCA as an excuse either to exclude US clients or impose special requirements (for instance, minimum account balances) on US clients wishing to open or maintain bank accounts. Some financial institutions are offering to help clients with FATCA compliance for a fee, which is a handy way to generate revenue from a government requirement.
Americans residing outside of the US have long bemoaned the pariah status that FATCA seemingly imposed on them from the beginning. As labourers in the FATCA vineyards we are now coming to the conclusion that FATCA is being blamed for all the ills of the financial system, in some cases unfairly. It seems, despite the efforts of the US and local jurisdictions to ease the reporting implications of FATCA, primarily through the Intergovernmental Agreements, Americans still face difficulty when dealing with banks and other financial institutions. Perhaps these banks with some exposure are still smarting from their dealings with the US Department of Justice, either under a criminal investigation or a non-prosecution agreement.
Banks will need to develop a reasonable approach to FATCA reporting since, relatively soon, the OECD’s Common Reporting Standard (CRS) will also come into effect. The CRS is the first genuinely multinational automatic tax information exchange and will see OECD countries (including just about all European countries) voluntarily exchanging information about each others’ residents. It is intended to be consistent with FATCA reporting – so US citizens will not be alone.
When the US introduced FATCA many European countries objected to the long arm of US tax jurisprudence and claimed that data protection rules prevented compliance. Gradually the EU and OECD countries came round to thinking that, if adopted it could provide a good basis for implementing the long standing OECD information exchange initiative, and so most of the OECD countries have entered into intergovernmental agreements with the US to implement FATCA consistent with data protection laws. These agreements have formed the basis for implementation of CRS. And they can blame the Americans when anyone complains.
But the problems that US citizens can face in opening and maintaining investment accounts outside the US are not really related to FATCA in our view. Instead the blame should be laid at the door of a different part of the alphabet soup of cross border regulations.
The AIFMD (Alternative Fund Managers Directive) has combined with the SEC and Dodd Frank US regulations mean that managers offering fund investments on a retail basis now face a much higher degree of regulation. So Americans can still open bank accounts but finding an investment manager is more challenging. Partly this also reflects the competing US and UK tax issues for fund investors.
So Americans abroad can still have cash deposits, buy equities and bonds and trade currencies. But if they want to buy funds they will need to seek out the small, but growing, number of managers who are geared up for the new fund regulatory environment.
So this Thanksgiving Americans should pardon the FATCA turkey and hunt for sophisticated fund managers for their investments.
[“At Withers, we believe that the strength of our business must be aligned to our social values.”]
Here is @EmBee’s Thanksgiving message reply to the Withers LLP employees:
I say chain McLemore and Cassell to the FATCA turkey’s drumsticks, stuff that bird with some Guy Fawke’s gun powder and light a match.
Three turkeys in one big blow out.”
My email response to one of the employees:
“November 24, 2014
Dear Ms McLemore,
I couldn’t help but notice your FATCA Thanksgiving message to Americans abroad (I am one such person).
Because your message was, I believe, made honestly and represents an important point of view of Withers LLP and other similar firms I have re-posted the Thanksgiving message with a brief reply from my colleague (Mrs. Em Bee) on the Isaac Brock website.
There are many inaccuracies in your message, but for the moment I will take issue with one statement that you made, that FATCA is “just another form.” For example, our group, the Alliance for the Defence of Canadian Sovereignty, is taking the Government of Canada to court over its “agreement” with the United States to implement FATCA, under threat of economic sanction.
As you are an attorney, why don’t you have a quick read of some of our Claims and let me know what you think?
Also, I see that you are a graduate, like me, of Notre Dame University. By any chance were you a student of Michael Kirsch, well known for his views on U.S. imposed citizenship-based taxation?
Please let’s keep the dialogue going. I will post your response on the Brock site.
With best wishes,
Notre Dame Class of 1970″
The only “Thanksgiving” my wife and I will recognize is the one that’s in October. Every year, I’ll pray this is the last one in November for the stale, stinking morass that lies below the 49th Parallel.
Canada does have a more sensibly timed Thanksgiving. Here in the U.K., there is a Sunday in October, but it is so low-key that nobody notices it, I belong to a few FB groups that have expats in them and open U.S. Thanksgiving invites circulate at this time of the year, so I would imagine that FATCA will be a hot topic of conversation. I don’t think that any of these celebrations will involve giving thanks for the IRS or FATCA.
Speaking of turkeys and vultures, Shulman’s new employer BNY Mellon is cashing in big time on FATCA in Asia and it is not just U.S. citizens who are being affected. So, FATCA doesn’t just leach money out of foreign countries through the fines and taxes, but also the money that goes to U.S. compliance condors.