12 thoughts on “ILSA Journal of International & Comparative Law: U.S. FATCA: American Legal Imperialism?”

1. Jeesh, I’m three pages in and it reads like a thriller novel. I’m not putting this down tonight. The abstract ties in with Prof Allison Christians’ blog post today that some are suggesting that the “revenue rule” should be done away with in order for there to be greater global tax transparency. Interesting times ahead for America the tax haven.

   http://taxpol.blogspot.ca/2015/02/brunson-on-enforcing-foreign-tax.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+TaxSocietyCulture+(Tax,+Society+%26amp;+Culture)

2. Well the paper seemed promising with words like extraterritorial, egregious, outcry, unintended consequences, predicament, imposed, etc. However, I was taken aback by this in the “Global Standard for Automatic Exchange of Financial Account Information” section (pg 31):

   The CRS, to be implemented into domestic law by each subscribing jurisdiction, provides “due diligence and reporting procedures” for financial institutions. It requires financial institutions to report account information regarding account holders who are tax residents of a participating jurisdiction to authorities in those respective jurisdictions. The CRS is closely modeled after and draws from the FATCA IGA, with a particular focus on the concept of citizenship-based taxation—an approach long employed by the United States.

   Does this mean their aim is to turn all the participating countries towards CBT instead of RBT? I thought it was visa-versa. We’re all aware of the nightmare that universal CBT would produce. Don’t they know? Don’t they care?

3. How can they say with a straight face that the IGA’s “protect” us from FATCA? HA! They really expect us to believe that BS?

4. A very well-written but depressing read. Although the authors’ critical voice and choice of words will appeal to those of us who are negatively affected by FATCA and CBT, the authors make a convincing case that in the long run, resistance is futile, the ADCS lawsuit likely will have no effect on FATCA (only on the IGA between the US and Canada, which in essence makes things worse for US entities in Canada), and they likewise offer a believable warning that in the medium-term, not only will other governments cave in, but while they’re at it, will follow the US example and could even go so far as imposing CBT on their own citizens.

   Very depressing. Time to pack my bags and move to a monastery in Bhutan.

5. It starts out pointing the obvious [negatives], then morphs into some advocate of the FATCA and CBT. Imagine that mess! I bet we’d hear the same condemnation we hear about Eritrea, meanwhile they do the same thing or worse.

6. @EmBee

   Here is what the OECD document they cite says about CBT on the page they cite:

   “While the intergovernmental approach to FATCA reporting does deviate in certain aspects from the CRS, the differences are driven by the multilateral nature of the CRS system and other US specific aspects, in particular the concept of taxation on the basis of citizenship and the presence of a significant and comprehensive FATCA withholding tax. Given these features, that the intergovernmental approach to FATCA is a pre-existing system with close similarities to the CRS, and the anticipated progress towards widespread participation in the CRS, it is compatible and consistent with the CRS for the US to not require the look through treatment for investment entities in Non-Participating Jurisdictions.”

   This is all it says. I can’t see anywhere in here where CRS will copy CBT. Am I missing something?

7. Oh, and they are wrong about the UK IGA: it may not care whether the fund managers are British or not or whether the source income is British, but it is only interested in people who are U.K. tax domiciled, not citizens. Sometimes haste makes waste!

8. @ Publius
   Thanks for trying but honestly I don’t fully understand that OECD paragraph (“look through treatment” — ???). So I’m guessing that Bean and Wright might have got it wrong. The OECD used aspects of FATCA reporting for its CRS but they actually focused on RBT not CBT. Right?

9. Barbara is right. The third paragraph on page 25 is especially depressing. If the ADCS lawsuit succeeds, the IGA will be gone but FATCA and CBT will still be here, and we will likely be worse off rather than better off.

10. @ Barbara and Richard
    The Bean and Wright paper is flawed and there are other opinions which beg to differ about the consequences of an ADCS win. Striking down the anti-constitutional, anti-sovereignty, anti-moral FATCA IGA is a step in the right direction. I like to think of dominoes falling, rather than facing an immovable force. One thing’s for sure, lying down in front of an immovable force is no way to stop it. It will simply increase its energy and expand its horizons.

11. Also, to Barbara and Richard,

    Here is how I look at it and why I won’t give up: https://isaacbrocksociety.ca/2015/02/28/adcsovereignty-fatca-iga-lawsuit-continues-to-be-newsworthy-and-provides-education-and-leadership-to-the-world/comment-page-1/#comment-5652920.

    And, as always, USCitizenAbroad, puts us back on track by reminding what we’re fighting for: https://isaacbrocksociety.ca/2015/02/28/adcsovereignty-fatca-iga-lawsuit-continues-to-be-newsworthy-and-provides-education-and-leadership-to-the-world/comment-page-1/#comment-5656747.

    Depressing, yes; but theirs the final verdict, NO.

12. @EmBee
    Yes, that is my reading of it: CRS is like FATCA but without the unilateralism, 30% withholding tax and CBT.
    I probably should have left the ‘given these features’ out. I think that it means that it is not a violation of CRS principles for the U.S. working to through financial institutions rather than through governments in jurisdictions without IGAs. The OECD could have been put more clearly, but sometimes that is not the point.