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August 20 2015 Bloomberg BNA Article: Canada Court Ruling Could Put Brakes on FATCA [Is a “Storm Ahead”?]

This article on our ADCS-ADSC Canadian FATCA IGA lawsuit came out on August 20, 2015.

I have now received permission from Bloomberg BNA to post it on Brock:

“Reproduced with permission from Daily Tax Report, 161 DTR I-1 (Aug. 20, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.”

This article is interesting as it largely takes our lawsuit seriously. Unfortunately, none of “us” (Ginny and Gwen, our supporters harmed by the Canada-U.S. FATCA IGA) were interviewed.

THE BLOOMBERG ARTICLE:

Canada Court Ruling Could Put Brakes on FATCA
2015-08-19 23:53:39.983 GMT
BNA Snapshot

Development: Federal Court of Canada due to rule on the validity of Canada’s intergovernmental agreement to facilitate FATCA financial reporting.

Takeaway: Practitioners predict a ruling for the plaintiffs would spur challenges around the world.

Next: Ruling expected by Sept. 30 [Hopefully before September 13; SK].

By Peter Menyasz

June 19 — Tax authorities and practitioners around the world are awaiting a Canadian court’s ruling on the legality of Canada’s legislation to comply with the Foreign Account Tax Compliance Act (Hillis v. Attorney Gen. of Canada, Federal Court of Canada, No. T-1734-14, oral arguments, 8/5/15).

The Federal Court of Canada is due to issue by Sept. 30 a ruling on the validity of the intergovernmental agreement on FATCA between Canada and the U.S., which mirrors more than 100 IGAs the U.S. has reached with other jurisdictions (221 DTR I-3, 11/17/14).

The ruling will address the preliminary issue, addressed in oral arguments Aug. 4-5, of whether information exchanges authorized by Canadian legislation to implement the IGA are consistent with the Canada-U.S. Income Tax Convention. The court will rule later on the constitutional validity of Canada’s legislation to implement the IGA, which is the lawsuit’s main thrust.

Storm Ahead?

If the court finds in favor of the plaintiffs, the Canadian government will undoubtedly file an appeal with the Federal Court of Appeal, but in the interim, the ruling will “throw the brakes” on FATCA’s application in Canada, Roy Berg, director of U.S. tax law with Moodys Gartner Tax Law LLP, told Bloomberg BNA in an Aug. 18 interview.

The court could also find the IGA partially inconsistent with the tax treaty, leaving the door open to appeals by both sides. Even if the court supports the government’s position, an appeal is likely, Berg said.

In addition, the court has indicated it will likely issue only a bare order, with reasons to follow later, leaving uncertainty over the details of its finding, and regardless of this ruling, the constitutional challenge will remain to be heard, he said.

The Canadian challenge is being watched carefully in the other jurisdictions with IGAs in place, and success by the Canadian plaintiffs could lead to a string of challenges, particularly as the treaty-based arguments would apply in a number of jurisdictions, he said.

Additionally, Berg said that if the Canadian lawsuit is successful, it could put at risk Canada’s ability to participate fully in the Organization for Economic Cooperation and Development’s common reporting standard. The Canadian government committed in its budget for fiscal 2015-2016 to implementing the OECD standard in July 2017, with draft legislation to be introduced during 2015 (77 DTR I-3, 4/22/15) .

“Potentially, the storm is coming,” Berg said.

Practitioners Awaiting Outcome

Alexander Demner, a partner in the Toronto office of Thorsteinssons LLP, agreed Aug. 19 that a ruling in favor of the plaintiffs would be “extremely significant,” effectively striking down the IGA and forcing Canadian financial institutions to choose between reporting directly to the IRS and paying the full 30 percent withholding tax on payments received from U.S. payors.

That would also mean that Canadian taxpayers’ other accounts, including registered retirement savings plan accounts and tax-free savings accounts, would lose the exemptions provided in the IGA and would be reportable to the IRS, Demner told Bloomberg BNA in an e-mail.

“The result could potentially be disastrous,” he said. “Canadian banks could find themselves in an untenable position, and one which could have serious economic repercussions.”

Roanne C. Bratz, a partner in the Montreal office of Stikeman Elliott LLP, agreed Aug. 19 that a ruling in the plaintiffs’ favor could be seen as support for similar legal challenges in other jurisdictions. “Of course, the basis for the Canadian judgment would be key in determining the extent of such jurisprudential support,” Bratz told Bloomberg BNA in an e-mail.

In any event, there will be significant uncertainty regardless of the outcome of this first ruling in the Canadian lawsuit, she said. “Whichever side is victorious at first instance, it is certain that appeals will be filed, so a realistic final determination is not imminent,” she said.

Bratz also noted the lawsuit in the U.S. filed by Republican presidential candidate Sen. Rand Paul (Ky.) that challenges the validity of FATCA-related IGAs signed by the U.S. with Canada, the Czech Republic, Israel and Switzerland (135 DTR K-4, 7/15/15).

Veronika Chang, head of the U.S. law practice group with Toronto law firm Morris Kepes Winters LLP, suggested Aug. 19 that while a ruling in the plaintiffs’ favor would invalidate Canada’s IGA, it would not affect the underlying requirements imposed by FATCA.

The ruling could inconvenience Canadian financial institutions and potentially spur similar court challenges in other jurisdictions, but that won’t help Canadian taxpayers, Chang told Bloomberg BNA in a telephone interview. “At the end of the day, I don’t see it changing much,” she said.

Details of Tax Treaty Implications

The first portion of the lawsuit addresses the arguments by plaintiffs Virginia Hillis and Gwendolyn Deegan, dual citizens who were born in the United States, that the requirements in the IGA for provision of account holder information to the IRS is more extensive than permitted by Articles XXVI-A, XXVII and XXV of the bilateral income tax treaty.

They argued that only a tiny subset of the information collected by the Canada Revenue Agency from Canadian financial institutions would be legally disclosable under the treaty and that the information would not provide any benefit to the IRS, demonstrating that coverage of Canada under FATCA was unnecessary.

It is impossible to guess on which side of the case the ruling will land, but there is a reasonable chance that the court could “bite” on the plaintiffs’ arguments, Berg said.

“Taken at face value, the plaintiff’s position would greatly limit the exchange of information contemplated by FATCA, which the defendants argued could not reasonably be what Canada and the U.S. intended when they entered into the IGA. The defendants proffered the counter-argument that under Canadian law interpreting a tax treaty is different than interpreting a statute,” Berg said.

The main portion of the lawsuit argues that the Canada-U.S. IGA, signed Feb. 5, 2014, violates basic freedoms guaranteed by Canada’s Charter of Rights and Freedoms and the unwritten constitutional principle against forfeiting sovereignty to a foreign state.

Federal lawyers countered that the IGA’s provisions are constitutional because they don’t cede sovereignty, and if they do violate Charter rights, the infringements are justified to relieve Canadian financial institutions and their clients from the “crippling” consequences of non-compliance with FATCA.

Canada’s Model 1 IGA relieves Canadian financial institutions from having to file reports directly to the IRS, instead reporting to the CRA, which would then provide the information to its U.S. counterpart. That eliminates concerns about compliance with Canadian privacy laws and protecting the exchanged information under Article XXVII of the bilateral tax treaty.

The IGA also clarifies that Canadian institutions aren’t required to report on certain classes of accounts, exempts smaller deposit-taking institutions from FATCA reporting requirements, exempts Canadian institutions from mandating closure of client accounts and provides simpler rules than those in FATCA.

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor on this story: Rita McWilliams at rmcwilliams@bna.com

The above story appeared in:
Daily Report for Executives
Daily Tax Report”

— HERE IS COMMENTARY ON THE ARTICLE BY USCitizenAbroad:

@Stephen Kish

Thanks for posting this article and I agree with your statement that:

This article is interesting as it largely takes our lawsuit seriously. Unfortunately, none of “us” (Ginny and Gwen, our supporters harmed by the Canada-U.S. FATCA IGA) were interviewed.

The article reveals a “FATCAnatic Tax Practitioner” perspective of the situation. The article and comments reported are a testament to how far the @ADCSSovereighty FATCA lawsuit has achieved. The FATCAnatics are VERY CLEARLY taking the lawsuit seriously.

This important piece of wisdom comes to mind:

First they ignore you, then they laugh at you, then they fight you, then you win.

Mahatma Gandhi

First they ignored us – no question about that …

Think back to the early days. Think back to the protests. Think back to the Bill C-31 Committee hearings.

Then, they laughed at us …

As I recall, in May 2014, certain Conservative MPs (in the final stages of the Bill C-31 hearings) were actually laughing at the harm inflicted on certain Canadian citizens.

In August of 2014 when the lawsuit was filed, various tax practitioners and MPs (and others) took the position that they lawsuit was ridiculous and laughable. I remember comments to the effect that … “What the plaintiffs don’t see” or “What the plaintiffs don’t understand is …” Some even suggested that the plaintiffs were admitting to CRIMINAL Acts. Imagine, Canadian citizens and residents are criminals because they are not filing forms to the United States Government. Right …

Now, the are clearly fighting us …

Oh yes, the Government is fighting tooth and nail. I believe it was also posted on Brock that various U.S. tax practitioners were actually in the courtroom in Vancouver (what were they doing there anyway?) Even the “tax practitioner” quotations in the above article seem to allow for the possibility that we will win. To quote from the article:

It is impossible to guess on which side of the case the ruling will land, but there is a reasonable chance that the court could “bite” on the plaintiffs’ arguments, …

And then we win! Yes, its true

The tax practitioners quoted NOW recognize that the true impact of this lawsuit extends way beyond Canada. Think of it! This lawsuit providing the road to 100 countries who have signed Model 1 IGAs being shown the road to freedom. Yes, this is serious indeed. To quote:

The Canadian challenge is being watched carefully in the other jurisdictions with IGAs in place, and success by the Canadian plaintiffs could lead to a string of challenges, particularly as the treaty-based arguments would apply in a number of jurisdictions, he said.

Actually, we may have already won. It’s just that we have to wait a bit longer for a formal notification of our victory. That notification will come. I don’t know the date or the context but it will come.

Thanks again for posting this:

“The world according to the FATCAnatic Tax Practitioner” article.

104 thoughts on “August 20 2015 Bloomberg BNA Article: Canada Court Ruling Could Put Brakes on FATCA [Is a “Storm Ahead”?]

  1. @Jan

    You must understand how these “tax professionals” think. They are about: comply, comply, comply. They believe that the United States will impose sanctions on it’s number one trading partner. The United States operates on the level of fear and intimidation. It’s clear what the U.S. is threatening. It’s not clear what will happen.

    There is NO doubt that the Canadian banks will hurt Canada to help themselves.

    Clearly the banks regard the “It’s U.S. Law” threat to be so dangerous that the will pay any price to uphold the Canada U.S. FATCA IGA. Put, it another way, when the IGA discussions were going on, the Canadian Banks sent a message to the Harper Government (and the world) that said:

    Let the word go forth from this time and place, to friend and foe alike, that the torch has been passed to a new generation of Canadian Banks – incorporated in this century, tempered by bad loans, disciplined by a hard and bitter recession, proud of our ancient heritage–and unwilling to witness or permit the slow undoing of those corporate rights to which our banks has always been committed, and to which we are committed today at home and around the world.

    Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of our banking profits.

    How about this as an investment opportunity:

    If you believe that Justice Martineau will rule in favor of our plaintiffs then you want to “short” Canadian banks stocks. Their prices may fall.

    If you believe that Justice Martineau will rule in favour of the government then assume Canadian bank stocks will go up.

    As you can see, as confirmed by the comments of the FATCAnatic “Tax Professionals”, the very future of Canada depends on Justice Martineau’s decision

  2. I am not a Canadian (but frankly wish I were one). This case is so fundamental and in a way so simple. Canadian citizens are being positively discriminated in violation of the Charter. I wish the US had a Charter so that the arguments against CBT, FATCA and FBAR fines were clearer and easier to make. I find the argument that ‘gee, if the IGA is not enforced/thrown out then FATCA still stands’ to be absurd. Yes, the Canadian court can’t change US law, but it can clearly stop the Canadian government to violate a sub class defined by a foreign country of Canadian citizens rights in providing confidential data to that foreign country.

  3. Has anybody actually read what Canada signed regarding OECD? Unless I am brain-dead, wouldn’t the FFIs once again have to have a new law implemented to allow them to exchange information for accounts held by residents of other countries? The IGA only covers reporting US Person accounts.

    I know someone on Twitter who would say the US would not hesitate to take the 30%.

  4. Let me paraphrase what Mr Taylor, lawyer for the government said to Justice Martineau:

    It sucks to be you.

    I think it sucks more to be Mr Taylor.

  5. It also sucks to be Stephen Harper and I let him know that. Harper is currently defending what appears to be lies to cover an issue involving money that was stolen from the public. Right now, every day is incriminating him more and more. He seems to have a lot to worry about these days. This guy actually thinks he will be elected???

  6. @Tricia and All:
    Right after the IGA was signed by Canada there were articles at the New American by Alex Newman regarding OECD, the member states , how many they were, who was involved and what their aims are regarding tax and companies and individuals.
    Alex’s article had numerous links, one of which was to the OECD mandate and what they expected these 40 countries to sign regarding their citizens and their individual rights and privacy concerns.
    It is clear that they have intentions that are harmful to any sovereign nation, yet expect those very nations to betray their people in favor of the wishes of these little tin gods who have set themselves up at the UN to give themselves the power to override ALL laws of all nations, including the US ( whose taxpayers fund their initiative to tax and claim the right to tax all while being paid exorbitant salaries, all tax free ironically and cynically)

    http://www.thenewamerican.com/economy/item/17643-globalists-unveil-socialist-backed-new-world-tax-regime

    Dated Feb.17,2014:
    From the article:

    “As various tax-funded international institutions explicitly outline plans to plunder humanity’s wealth to prop up governments drowning in odious debts, the Organization for Economic Cooperation and Development (OECD) last week officially unveiled a new socialist-backed plot to create a global tax information-sharing regime to ensure that nobody except the establishment escapes the upcoming fleecing. Under the proposed scheme, admittedly inspired by “FATCA,” the Obama administration’s latest addition to the sprawling U.S. tax regime, governments and dictatorships worldwide will automatically share all private financial data on citizens with each other to extract as much wealth as possible from the public.”

    And Alex further emphasizes:
    “Leading the charge to create the new global tax regime is the Group of 20 (G-20), a coalition of governments and brutal dictatorships that are in the process of building what virtually every major media outlet recently described as a “New World Order.” Top officials in the outfit, which includes the ruthless Communist regime ruling mainland China, among other barbaric autocracies, publicly announced a plot in recent years to share financial data and more on all citizens with each other. The goal, for now: extract as much wealth as possible.”

    Further still and fundamentally:

    To implement what critics call their nightmarish vision of a “World Tax Organization” — supposedly aimed at stopping tax evasion — the G-20 asked the United Nations-linked Organization for Economic Co-operation and Development (OECD) to take the lead. The widely criticized “cartel” of tax-hungry politicians, infamous primarily for fanatical efforts to crush national sovereignty and for bullying jurisdictions with relatively low taxes into surrendering their competitive advantage, is now working to develop the taxation regime and prod its member governments into adopting it.”

    “Meanwhile, the inspiration and model for the global information-sharing scheme, OECD bosses admit, is FATCA. “A key catalyst for automatic exchange of information and the on-going OECD work has been the FATCA legislation enacted by the United States in 2010,” the international outfit said last year in a brief, adding that the plot also has the ardent support of central bankers and G-20 regimes. In fact, the brief explains, FATCA pseudo-treaties between the Obama administration and foreign governments — unconstitutional under the U.S. Constitution, critics say — will even serve as the “model” and “template” for the global regime.”

    The deeply controversial U.S. tax scheme, adopted in 2010 as part of an Obama administration “stimulus” ploy, is working to turn foreign governments and financial institutions into unpaid agents of the IRS. It is also causing havoc for middle-class Americans abroad. Despite mounting outrage and growing efforts to repeal FATCA or challenge it on constitutional grounds, it is set to go into effect in mid-2014. Critics are already warning of economic and human devastation. At the OECD and the G-20, though, top officials are hoping to spread the misery worldwide in the scramble to extract more wealth from the public.

    A key component will be the information sharing among governments and dictators. “The reality will be that for the automatic exchange of information rules should cover what kind of information is to be exchanged, how often, who should collect the information, to whom it should be sent, and in what format,” claimed Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, speaking as if the plot were already a done deal. “It will be a sort of multilateral form of the American FATCA agreement.”

    Critics and analysts say that, among other concerns, financial privacy will soon be a relic of the past — at least if the global-tax schemers get their way and governments worldwide put citizens’ private data out in the open for any government or regime to access. OECD and its cohorts hope to have the controversial international tax-information regime in place by September of 2014. Already, planetary bureaucrats are terrorizing national authorities into changing their laws, warning governments from Hong Kong to Switzerland that they will have to alter their successful systems to “comply” with the draconian schemes.

    In an interview with SwissInfo.ch, OECD tax czar Saint-Amans portrayed the outfit — funded in large part by $100 million annually from U.S. taxpayers — as some sort of global taxman. “The beauty of international organizations is that we oversee relations between nations and the differences between states,” he boasted, though it was not clear where the OECD had any sort of mandate to “oversee” relations between governments. “We will try to ensure that this initiative to make FATCA multilateral is concluded on the basis of reciprocity so that each country’s interests are taken into account.” By countries, of course, he means governments.

    According to a brief by the OECD, among the data that governments would share with each other as part of the “automatic exchange of information” (AEOI) regime are various categories of income, changes of address, purchase or sale of property, and more. Of course, the scheme turns American traditions and constitutional protections upside down. Instead of being secure in one’s house, papers, and effects without a warrant and probable cause, governments and autocrats around the world will be free to rifle through citizens’ most sensitive information at will. Hackers, criminals, and identity thieves, among others, might also be able to access the data, opponents warn.

    The plot to abolish financial privacy and national independence in tax policy will also be expensive, although the taxpayer-funded bureaucrats at the OECD — whose salaries are not taxed — do not seem to care. “What we are doing is to develop a single standard that will be compatible with national and regional systems — there will be only one way of collecting and exchanging information,” continued Saint-Amans. “That will cost something, but it is the price to pay to be free from suspicion of complicity in fiscal fraud.”

    “In other words, national governments must obey the global tax schemers — and taxpayers and consumers must pay for the schemes — or face consequences. If authorities do not bow down to the OECD demands, they can be blacklisted as “uncooperative,” or worse, with economic sanctions being the implicit threat, according to experts. The tactic is especially effective when bullying smaller nations, especially with Obama and bloated governments ruling major Western economies already fully on-board with the agenda.”

    And Alex rounds it out with this:

    The U.S. government had historically resisted the OECD’s fiendish efforts to “harmonize” global taxation policy — at least tepidly. Under the Obama administration, however, the global plot has received among its biggest boosts thus far with the adoption of FATCA. The threats to financial privacy, economic performance, competition among jurisdictions, economic freedom, and more, are very real, experts told The New American. The compliance costs are also expected to be massive.

    Because the OECD, the G-20, and other forces seeking to foist the global FATCA regime on the world are largely unaccountable to the public, stopping the scheme will be tough at this point. Critics of the machinations say the best methods of fighting back, for now at least, include raising awareness of what policymakers are doing and urging lawmakers to put an end to the lawless schemes. With firm resistance, though, the emerging planetary taxation regime can still be stopped — along with everything such a scheme would entail.

    Can anyone deny that the kind of progress they desire has made great inroads since Feb. of 2014.

    One of the main roadblocks to all of this has been the ADCS lawsuit !

  7. Cyprus and now Greece are being subjected to the aims of those wishing to fleece every person on the planet to satisfy their insatiable desire for more and more and more.
    Iceland , tiny country that it is had the right idea about these miscreants. One that Canada and others should take under serious advisement!
    Canada stand in line to be treated in the same way as Greece and Cyprus with the Bail In clause in the 2013 budget, passed with little fanfare or mention at all. Yet another cog in the wheel of our financial and personal destruction.

  8. Here is *some* information on what Canada and other countries signed for the OECD AEOI.

    http://www.oecd.org/ctp/exchange-of-tax-information/automatic-Exchange-Financial-Account-Information.pdf

    Page 3:

    On 29 October 2014, 51 jurisdictions signed the first ever multilateral competent authority agreement to automatically exchange information under the Standard, based on Article 6 of the Multilateral Convention. The significance of this event was demonstrated by the participation of 38 ministers in the signing ceremony, the largest gathering of ministers to take joint action to address tax evasion. On 19 November 2014, Switzerland signed the multilateral competent authority agreement, therewith becoming the 52nd signatory, with Ghana and the Seychelles following suit on 14 May 2015. In the margins of the OECD Ministerial meeting (3-4 June 2015), Australia, Canada, Chile, Costa Rica, India, Indonesia and New Zealand signed the multilateral competent authority agreement, bringing the current total number of signatories to 61.

    Page 6:

    4. Background: FATCA Intergovernmental Agreements
    In 2010 the United States enacted legislation commonly referred to as FATCA (Foreign Account Tax Compliance Act), which effectively requires foreign financial institutions around the globe to report account details of their U.S. customers to the U.S. tax administration. Recognising the important legal and cost issues of this approach the United States developed together with five other OECD (and EU) member countries (France, Germany, Italy, Spain and the United Kingdom) a model for the intergovernmental implementation of FATCA (Model FATCA IGA). The Model FATCA IGA provides for the implementation of FATCA through reporting by financial institutions to their local tax authorities, which then exchange the information on an automatic basis with the U.S. tax authorities.
    The Model FATCA IGA is not only becoming a preferred route for the implementation of FATCA, it has also served as the template for the common model for automatic exchange of information. The Model FATCA IGA itself contains a commitment to work with interested countries, the OECD and where
    appropriate the EU on adapting the terms of the Model FATCA IGA “in the medium term to a common model for automatic exchange of information, including the development of reporting and due diligence standards.” In a press release on 26 July 2012, the OECD welcomed the Model FATCA IGA. The OECD Secretary-General Angel Gurría said:
    “I warmly welcome the co-operative and multilateral approach on which the model agreement is based. We at the OECD have always stressed the need to combat offshore tax evasion while keeping compliance costs as low as possible. A proliferation of different systems is in nobody’s interest. We are happy to redouble our efforts in this area, working closely with interested countries and stakeholders to design global solutions to global problems to the benefit of governments and business around the world.”

    Note the footnote at the end of second link regarding the *exceptional* US.
    http://www.oecd.org/tax/transparency/AEOI-commitments.pdf

    1 The United States has indicated that it will be undertaking automatic information exchanges pursuant to FATCA from 2015 and has entered into intergovernmental agreements (IGAs) with other jurisdictions to do so. The Model 1A IGAs entered into by the United States acknowledge the need for the United States to achieve equivalent levels of reciprocal automatic information exchange with partner jurisdictions. They also include a political commitment to pursue the adoption of regulations and to advocate and support relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.

  9. It drives me crazy when I read about the OECD’s Common Reporting Standard and how it is somehow similar to FATCA. Or how FATCA is justified because the OECD is pushing for global tax transparency. I hate how governments and tax compliance condors lump these two together.

    Nothing I’ve read about the OECD/CRS says that countries should be reporting THEIR OWN CITIZENS/RESIDENTS to foreign jurisdictions! Common reporting standard applies when a person resident in one jurisdiction has financial accounts in a completely different jurisdiction. And from what I’ve read, the information flows in one direction, to the country of residence.

  10. Thanks, I understand the “big picture” re OECD.

    My comment is aimed at a very narrow issue. Ex: Canada and Italy want to exchange info.
    Canada will report on Italians living in Italy with $$ in CDN accts. My question is, are these accounts not now protected by PIPEDA? Does the OECD agreement already address this issue? If so, accounts in Canada held by Canadian residents would still have some protection no?

    If not, we might have a problem with the discrimination claim.

  11. @All

    The OECD model which many countries have signed has the following ”Convention on Mutual Administrative Assistance in Tax Matters” which allows power of collection between countries.

    My understanding is it would allow the US to collect from US citizens abroad through local tax agencies?

    Does anyone know about this issue and how it works?

  12. Thanks for highlighting this once again, Furious AC. We all need to keep in mind that…

    Canada stand in line to be treated in the same way as Greece and Cyprus with the Bail In clause in the 2013 budget, passed with little fanfare or mention at all. Yet another cog in the wheel of our financial and personal destruction.

  13. bg, what do you mean in *allow the US to COLLECT from US citizens abroad* — as in collect actual monies or as in collect information?

    From my comment above,

    Note the footnote at the end of this link regarding the *exceptional* US.
    http://www.oecd.org/tax/transparency/AEOI-commitments.pdf

    1 The United States has indicated that it will be undertaking automatic information exchanges pursuant to FATCA from 2015 and has entered into intergovernmental agreements (IGAs) with other jurisdictions to do so. The Model 1A IGAs entered into by the United States acknowledge the need for the United States to achieve equivalent levels of reciprocal automatic information exchange with partner jurisdictions. They also include a political commitment to pursue the adoption of regulations and to advocate and support relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.

    Canada’s local tax agency is the Canada Revenue Agency, which has on their site: Enhanced financial account information reporting These pages provide information for Canadian financial institutions and their account holders to help them understand the administrative aspects of the intergovernmental agreement between Canada and the U.S., signed on February 5, 2014.

    Thus, the Canadian litigation for which we have raised $500,000 and started with a summary trial in federal court on August 4 and 5, 2015. See: http://www.adcs-adsc.ca/

  14. Call me Ishmael, but I maintain that the 30% withholding threat is as empty as US promises of FATCA reciprocity. Banks and national governments worldwide are running scared over a BLUFF. If the 30% nuclear option is ever actually exercised then the US can kiss its almighty dollar goodbye and bury its corpse the next day. It’s incredible how much hand-wringing is going on about something that will never happen.

  15. This is a question of the USA’s power to control the world. Can the world stand up to the USA when the USA is wrong?

  16. I wouldn’t be so sure that the USA will not wield a sledgehammer against Canadian banks if the lawsuit prevails. Didn’t the USA unashamedly shut Andorra’s oldest bank out of SWIFT? Remember, the almighty USA is exceptional, and I really wouldn’t be surprised if they pick on one Canadian bank as an example to the world of almighty America’s wrath. I think things are about to get interesting.

  17. If the US decides to act on its 30% withdrawl, there are plenty of US branches of all the Big 5 right there for the plundering.

  18. @All and calgary411

    The OECD model which many countries have signed has the following ”Convention on Mutual Administrative Assistance in Tax Matters” which allows power of collection between countries.

    From the web page “The amended Convention provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes”.

    http://www.oecd.org/ctp/exchange-of-tax-information/conventiononmutualadministrativeassistanceintaxmatters.htm

    When reading the actual document my understanding is it would allow the US to collect TAXES, PENALITIES and INTEREST from US citizens abroad through local tax agencies?

    Does anyone know about this issue and how it works?

  19. recalcitrantexpat –

    We should be careful to not celebrate prematurely. The verdict has not be rendered and until then we should be humbly quiet as to the outcome. Our case is strong but it is not assured.

    This uncommon modest sanity deserves instant replay.

    Quibble:  But how can the case be strong when

    Canadian banks could find themselves in an untenable position, and one which could have serious economic repercussions  ???

    The “law” is not pure. The “law” has little to do with justice and much to do with technical casuistry. The “law” must and will serve the principalities and powers. The case in fact is far less than “not assured.”

    Challenge to hopped-up enthusiasts:  Provide one single example where the “law” has ever upheld individuals at such anticipated chaos to the interests of state and corporation.

    Anticipation:  Overwhelming silence, as following on loud smelly fart.
     

  20. @Barbara The Lawsuit wins then it will force the Canadian Government of the day to deal with FATCA (finally!) and its discrimination, and Charter Rights Violation, very publically – including pointing out the Bopp suit in the US. Canada can say that by US law the IGA is not a treaty. That it violates the tax treaty as a tax treaty override. Point out how FATCA passed Congress and Obama signature without debate in the US, point out one way street nature of it, point out implementation costs inflicted, point out sovereignty infringement aspects of Canadian citizens and Canadian only family members.

    The government might say we (Canada) will hand over the data simultaneously when the US is ready to hand over reciprocal information – gleaned from forcing all the US banks – US FFI from Canadian perspective – to ask all account holders, including those in Delaware the citizenship of beneficiaries under penalty of perjury. I look forward to the day when “Billy Bobb” in Alabama is required to fill out paperwork certifying that he is a US Citizen. Billy Bobb might just put CSA or Confederate States of America and think such form is proof that the UN has finally taken over the US government (remember Oklahoma City bombing?)

    I look forward to the day when all the “dirty laundry” of FATCA gets pulled out and “aired”. Democrat wrecking ball on its way !!!

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