Parliamentary Question: Legality of intergovernmental agreements (IGAs) on #FATCA http://t.co/8cdVyeQ0NT @SophieintVeld
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2015
The above tweet references:
Member of the European Parliament Sophie in ‘t Veld (ALDE/D66) tabled written questions to the European Commission about the legality of intergovernmental agreements (IGAs) on the Foreign Account Tax Compliance Act (FATCA).
You can find the questions here:
This is a start. Happy to see Fatca under multiple attack. As more people are exposed to the madness opposition will grow.
Get those answers, European Parliament Sophie in ‘t Veld! Thanks for your continued questions in the EU.
Some may recall how in November of 2014 Liberal MP Ted Hsu got pretty much stonewalled when he submitted an order paper re “unusual process” relating to the adoption of the FATCA IGA in Canada. The response was basically “we’ll let you know in 20 years”. I hope there’s better transparency where Sophie is.
Allison’s post is here:
She’s trying her best, but the EU is stonewalling her with redacted documents she requested. An effort needs to be made to identify which countries in the EU potentially would have FATCA lawsuits funded by legal aid.
This website lists the legal aid system for each country.
4. Is legal aid granted for all types of proceedings?
Assistance under the Legal Advice Scheme (advice and, where necessary, representation) is given in civil cases including employment, administrative, constitutional and social cases. In criminal cases and cases involving administrative offences, only advice is given. In cases where the laws of other States must be applied, assistance under the Legal Advice Scheme is given, if there is a German connection. No assistance under the Legal Advice Scheme is granted in connection with tax cases. Assistance with court costs is given for all types of civil cases, cases involving voluntary jurisdiction and cases brought before industrial tribunals, administrative courts, social courts and tax courts. No assistance with court costs is given to the accused in criminal court proceedings and debtors in bankruptcy proceedings. The rules on court-appointed defence counsels contain special provisions covering criminal proceedings. In bankruptcy proceedings, debtors are given time to pay the procedural costs.
In Germany, for example, Legal Aid covers constitutional cases which would probably include a FATCA lawsuit. There must be someone out there that fits the legal aid requirements who could get a FATCA lawsuit going with the Bundesregierung footing the bill.
A few of my cousins in Greece were born in the States but left when they were toddlers and never returned ever since… nor do they intend to. At present (or at least to our knowledge), an IGA has not been signed by the Greek Government (as they have got bigger problems to deal with at the moment). Would they qualify for Legal Aid if they are discriminated against by the banks? Or must it be a public authority?
I also know a Greek family with US taint who haven’t lived in the USA for 30 years, and I’m pretty sure they never even knew about US tax obligations.
I think now would be an excellent time for the US Treasury to start fining Greek banks billion of dollars for being accessories to such crimes as my friends and Duality’s cousins have committed. Without the protection of an IGA, the US can make it a priority to rip those funds out of the ashes of the Greek economy and hand them to the deserving Uncle Sam. Then we might finally see some of those anti-FATCA riots we’re all itching to see.
One of them left the States as a toddler and is now married to a Greek farmer who has never set foot outside Greece. Both of them do not speak English but are now subject to US taxation. HOW was this allowed to happen? Sadly, I doubt that “US Persons” living in Greece will riot in streets over FATCA, due to crisis fatigue.
Is anyone aware of this piece of news? This is quite a significant development here in Europe:
Wikipedia has highlighted some EU issues. Cost of EU to implement FATCA. EU laws violated by FATCA.
I would have added a 4th question: In the event that the FATCA IGAs are struck down (or if FATCA itself is repealed) will the governments of Europe, on behalf of their financial institutions, demand compensation from the United States for the expenses incurred in complying with their illegal demands?
I should have added: GO SOPHIE!!!
@Duality, I’ve been adding bits re MEP in’t Veld wherever I can see to put them but I’m glad you posted it here too. The latest is in this EU thread at IBS;
For any readers in the EU, and in the Netherlands, you might notify MEP Veld of the ADCS lawsuit in Canada against the FATCA IGA – and include links to the documents from both sides. It provides additional fuel for her related to the observations she made re the US lawsuit http://www.sophieintveld.eu/parliamentary-question-legality-of-intergovernmental-agreements-igas-on-fatca/ . She may recognize that there is informed academic and legal support for the view that the IGAs are not legal in the US
And in addition, I hope that someone will notify Allison Christians of in’t Veld’s formally tabled questions to the EU Parliamentre the legality of the IGAs.
Thanks very much Duality for posting that latest from MEP in’t Veld.
Opposition to FATCA is rising, and public evidence of the issues of US extraterritorial CBT are getting more public profile ex. http://tax-expatriation.com/2015/08/31/exploring-the-vexing-issues-of-u-s-citizenship-based-worldwide-taxation-university-of-michigan-school-of-law-october-8th-and-9th-2015/ (hat tip to JakDac for posting it http://isaacbrocksociety.ca/fatca-and-australia/comment-page-12/#comment-6454556 )
I think we need to be forwarding that http://www.sophieintveld.eu/parliamentary-question-legality-of-intergovernmental-agreements-igas-on-fatca/ to our representatives wherever we are in the world, along with the info about the Canadian based ADCS lawsuit, the US challenge.
Altogether it may make them see that even if they don’t care about us, and would be fine with being cravenly subordinated by a foreign power (the US), they may very well end up on the wrong side of this FATCA issue – and it will be very evident that they did nothing to assist the ordinary people affected when it counted.
And those in the EU – consider sending MEP in’t Veld your thanks for continuing to doggedly pursue this despite the reluctance of the EU to provide the info it would rather keep secret in aid of appeasing and bowing to the US (other examples; http://www.sophieintveld.eu/parliamentary-question-watch-lists-and-no-fly-lists-in-the-us-and-the-eu/ http://www.sophieintveld.eu/answers-to-parliamentary-questions-on-alleged-hacking-of-gemalto-by-nsa-and-gchq/ ). Brave people like in’t Veld need to know that their dogged and selfless efforts are noticed and applauded.
“Altogether it may make them see that even if they don’t care about us, and would be fine with being cravenly subordinated by a foreign power (the US), they may very well end up on the wrong side of this FATCA issue – and it will be very evident that they did nothing to assist the ordinary people affected when it counted.”
Yes, agreed. Perhaps at some point, but time will tell.
Remember that Canada has many more “U.S. Persons” than, say, Denmark. So, US-born Danes will have a terribly difficult time fighting FATCA on their own in Denmark. This is why we Europeans are so, so, so fortunate to have MEP Sophie in’t Veld to speak on our behalf as well as to defend us at the European Parliament. Without her support and persistence, we would have had very fragmented voices from frightened people across a continent of heterogeneous bureaucracies and customs.
Should Ginny and Gwen win their lawsuit in Canada, the Isaac Brock Society might want to think about building a sister platform for Europe.
@Duality, you are right that it appears that in Canada, a critical mass in numbers of those deemed by the US to be “US persons”, plus our inter-related history and shared geography – and crossborder families, work, and movement back and forth between the two countries probably contributed to get the challenge going – because it is easier to drive home the impact -but also means that our home government sees more advantage in placating the US than opposing it – no matter how many of us are affected – in addition to our local taxes wasted in implementing FATCA on ourselves.
I wonder if those in the EU might have other unique opportunities in that perhaps the EU platform has advantages as to specifics of EU Parliament representation, laws, recourse, etc. that we might not have here, and which those of us in Canada wouldn’t know enough about. We certainly don’t have an equivalent to in’t Veld asking those very pointed questions in our parliamentary system right now!
There may be angles to leverage in opposing FATCA which are stronger in the EU legal system/s – those in the EU might have insight as to what these might be? One could be possibly be that there may be better protections extended to those with EU residency – not just reserved for EU citizens so that the EU cannot discriminate, and also which would make more obviously absurd that the US pretends that EU residents are “US residents for tax purposes” . Perhaps because of a different legal history there are legal precedents there that we do not have to draw on in this jurisdiction? Another could be less reasons for the EU as a bloc to kowtow to the US? The NSA revelations certainly might have fostered more suspicion of the US in terms of issues of data protection, privacy, access etc. It is just as absurd for high tax countries in the EU to be treated as blanket centers of US tax evasion as it is to treat Canada that way.
The OECD CRS is going to make it more absurd given that the US has not signed on and is very unlikely to. It becomes even more obvious as time goes on that there will be no true or equivalent reciprocity. That is why MEP in’t Veld’s questions in public are so valuable. Here in Canada, even our tax agency had only lame obfuscations to offer when questioned on this issue. For example see this exchange that starts below, which makes very clear that the representative for our domestic tax agency the CRA knows very well that the FATCA IGA is not reciprocal, that it provides no recourse or protections for individuals, and that the purpose was wholly to protect Canadian banks from a 30% witholding penalty threatened by the US;
These admissions make a mockery of the ridiculous pretensions that FATCA is any meaningful basis for any multilateral agreement that is purported to be ‘reciprocal’, consensual, etc.
Thus the EU Parliament can stall MEP in’t Veld, and hope to delay any answers as long as possible, and can hope that no-one ever follows the questions in the EU. But, their answers are going to have to obfuscate severely and obviously because there is nothing defensible that they can say.
We will see…..
“Greece has consented to the application of the Foreign Account Tax Compliance Act (FATCA) between Greece and the US, which would allow Greek authorities to ask the IRS to supply data on the deposits of Greek citizens in the States, while the American authorities can also demand information on US citizens’ accounts in Greece.”
“After the agreement is signed, it will have to be ratified by a law passed in the Greek Parliament. Greece is one of the few remaining European Union members not to have ratified that agreement yet. However in some cases, such as in Bulgaria, the US can demand details on its citizens’ bank accounts in a European bank while not having to issue data from US banks.”
“More recently, the US Treasury announced that it will treat an IGA as ‘in effect’ with a partner jurisdiction if the United States has reached an agreement in substance with such jurisdiction and such jurisdiction consents to disclose this status. Feel free to click any of the countries below to see the latest development as you consider some of the following actions to think about:
[back to top]
In effect as of 2014-11-30 IGA treated as ‘in effect’ by US Treasury
A Model 1 IGA is treated as ‘in effect’ by the US Treasury as of November 30, 2014. The United States and Greece have reached an agreement in substance and Greece has consented to disclose this status. In accordance with this status, the text of such IGA has not been released and financial institutions in Greece are allowed to register on the FATCA registration website consistent with the treatment of having an IGA in effect provided that the jurisdiction continues to demonstrate firm resolve to sign the IGA as soon as possible.
“… while the American authorities can also demand information on US citizens’ accounts in Greece.”
A US-born Greek citizen in Greece is a Greek citizen, full stop. This is not rocket science.
Your reply was quite insightful. Unfortunately, I am not knowledgeable about jurisprudence and the European legal system. In fact, I have never in my life been to court and hope to maintain that record!
You wrote the following:
“… there may be better protections extended to those with EU residency – not just reserved for EU citizens so that the EU cannot discriminate, and also which would make more obviously absurd that the US pretends that EU residents are “US residents for tax purposes.”
In the first paragraph of the EU Taxation and Customs webpage concerning ‘EU individuals rights under EU law,’ it mentions the following:
“The application by EU countries of their taxing rules in parallel is not in itself contrary to EU law even if this leads to double taxation. However, EU countries are required to provide “equal treatment” to all EU citizens in tax matters. In other words, EU countries’ taxing rights should not conflict with EU law by, for example, discriminating on the basis of nationality or introducing unjustified restrictions to the exercise of the EU Treaty freedoms.”
Need I say more? FATCA simply has no place in Europe…
The Eur.Comm. is starting a 3-month consultation. on such problems that people in the EU may encounter as: “You want to open a bank account or buy a savings product but it is not available to residents of your Member State;”
Newest development on EU MEP in’t Veld’s questions re FATCA :
Decision in case 1398/2013/ANA on the European Commission’s refusal to give access to documents relating to the US Foreign Account Tax Compliance Act (‘FATCA’)
Available languages: en
Opened on 13 Aug 2013 – Recommendation on 03 Dec 2014 – Decision on 31 Mar 2016
Institution(s) concerned: European Commission
Field(s) of law: General, financial and institutional matters,External relations
Types of maladministration alleged – (i) breach of, or (ii) breach of duties relating to: Requests for public access to documents [Article 23 ECGAB]
Subject matter(s): Dealing with requests for information and access to documents (Transparency)
See very very interesting comment contained in #51 re data protection issues – DESPITE IGAs enacted and enabled by several member states.
“….the data protection aspects of these agreements are still controversial and subject to ongoing internal discussion and supervision by the national data protection authorities. “……..
Is there an opening for an EU challenge to the IGAs and FATCA enabled by some EU member states on the basis that they do not conform with EU data protections and the relevant laws of those member states?
> Is there an opening for an EU challenge to the IGAs and FATCA …?
Yes, I think there is. One difference that should be pointed out early-on is that — unlike the situation in the U.S. — foreigners are protected in Europe like natives. Hence I think that the new General Data Protection Regulation (GDPR) applies equally to U.S. persons (at least those resident in EU member states for at least 5 years) as it does to EU persons. Therefore either an EU or U.S. person could bring a claim to a DP supervisor or court in a member state or ultimately to the European Court of Justice in Luxembourg.
Disclaimer: I am not a lawyer; this is a personal opinion.
Sophie has just twittered that she has received the following answer, https://twitter.com/SophieintVeld/status/777080742010650624
@seniorexpat, heartening that MEP in’t Veld is still following up with this.
The ‘answer’ dodges the main thrust of her questions;
12 July 2016
Question for written answer
to the Commission
Sophia in ‘t Veld (ALDE)
Subject: FATCA (Foreign Account Tax Compliance Act)
In 2015, the Commission stated in an answer to a question that it ‘supports full reciprocity in information exchange between tax authorities’ and stressed the USA’s commitment to reciprocal automatic exchanges of information with its FATCA partners(1). The Congress has not yet adopted legislation to this end and the US authorities do not provide an equivalent level of reciprocity under intergovernmental agreements (IGAs)(2).
Given the recent parliamentary debates in France, Italy and the Netherlands on the bilateral IGAs on FATCA, and in particular the negative impact of the extraterritorial application of third countries’ law on EU soil, the disproportionate effect of FATCA on EU citizens (‘Accidental Americans’) and the discriminatory treatment they are facing:
1. what action will the Commission take to persuade the US Government to ensure reciprocity without further delay?
2. does the Commission consider that the refusal of ‘Accidental Americans’ by banks is a violation of the Payment Accounts Directive and of the Charter of Fundamental Rights?
3. what action will the Commission take to remedy the situation for the EU citizens affected?
“Answer given by Mr Moscovici on behalf of the Commission (16.9.2016)
FATCA and the related IGAs are bilateral agreements between the US and other countries, including Member States, and are not directly within the competence of the Commission. However, the automatic exchange of information can only be effective in fighting tax fraud and evasion and preserving the level playing field if implemented on a global scale. The Commission is therefore currently working in international fora – Organisation for Economic Co-operation and Development, Global Forum and G20 – to promote its global reach and ensure that the agreements, including the IGAs, on automatic exchange of financial account information meet the highest transparency standards and are fully reciprocal.
The Payment Account Directive (Directive 2014/92/EU ) obliges Member States to ensure that credit institutions do not discriminate against consumers based on their nationality, or place of residence or by reason of any other ground as referred to in Article 21 of the Charter in the provision of payment accounts under Article 15. Besides, the Directive also establishes a right of access to a payment account with basic features for all consumers legally resident in the Union in its Article 16. In each Member State, payment accounts with basic features shall be offered to consumers by all credit institutions or a sufficient number of credit institutions to guarantee access thereto for all consumers in their territory, and to prevent distortions of competition.
Following the expiry of the deadline for the transposition of the Directive (September 2016), the Commission will assess how the Directive’s provisions, including the ones mentioned above, have been transposed in all Member States, and will not hesitate to initiate infringement proceedings in case of non- or incorrect transposition.”
” (1) http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2015-012237&language=EN
European Parliament getting annoyed at one kind of US non-reciprocity (not FATCA, but visa waivers for Romanians and Cypriots)
Press release: http://www.europarl.europa.eu/news/en/news-room/20170227IPR64156/parliament-asks-eu-commission-to-press-for-full-us-eu-visa-reciprocity
Actual resolution text: http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B8-2017-0173&language=EN