March 22, 2018 Canadian FATCA IGA litigation update:
The attorneys for our side (our side are Plaintiffs Gwen and Kazia, the Alliance for the Defence of Canadian Sovereignty — the “client”, and our supporters) and the attorneys for Mr. Justin Trudeau’s Government have just agreed on the timing for the next steps of our Canadian FATCA IGA lawsuit in Canada’s Federal Court.
Here is the new timetable for our litigation:
— Defence [the Government] evidence, except one expert report, filed April 16, 2018;
— Last defence expert report filed April 30, 2018;
— Notice of any objections to expert reports provided by June 15, 2018;
— CMC to discuss scheduling of any applications to strike all or portions of affidavits in
— Cross-examinations completed by July 31, 2018;
— Plaintiffs argument served and filed by September 28, 2018;
— Defence argument served and filed by November 16, 2018;
— Plaintiffs’ reply served and filed by December 7, 2018;
— Hearing the week of January 28, 2019, subject to the Court’s availability.
The key update is the hope/expectation that the Federal Court hearing will take place in January 2019.
Yes, I know that our litigation has been moving at a glacial pace. Sorry…
“What I found so depressing about those Dutch TV reports was the unblinking obedience and resignation with which these poor accidentals spent all kinds of money becoming compliant”
Propaganda. IMO.
I do wonder what happens today when a US-born German walks into a German bank and opens an account with national ID, rather than a US passport – do they really check for place of birth and all that, or is it just a citizenship question without verification”
I don’t know what information German banks require for opening an account. I’m pretty sure the German passport would be the standard EU passport with place of birth and nationality.
In Germany, you would show either a passport or national ID card (Personalausweis) plus your local address registration (Anmeldung) to open an account. The ID, like the passport, lists both citizenship and place of birth. However, showing that ID does not necessarily mean that every detail is recorded – perhaps just nationality, not place of birth?
Out of curiosity I logged on to my various accounts and had a look round.
1. ING – Germany
Nowhere on the German site is there any record of citizenship, or mention of FATCA or CRS. If I changed my address from Germany to Canada or the US it might invoke something then, I’d expect.
2. Tangerine – Canada
On the Canadian version of ING there’s something buried at the bottom of the personal profile section:
Tax Residency Certification
Please review your personal information regularly to ensure that it’s up-to-date. If your obligations to file a tax return in other countries have changed, please click ‘Certify’ below to provide current information.
I chose not to click the “Certify” button but I’m sure if I did it would ask you for other countries of tax residence.
3. RBC – Canada
Nothing to do with citizenship, FATCA or CRS visible online except this little warning notice at the bottom of the page where your address, phone number and personal details can be edited:
If the country, province or territory where you have primary tax filing obligations is changing, please call us or visit a branch. (If you are unsure of your primary tax filing obligations, please contact the Canada Revenue Agency or speak to your tax advisor.)
Love the use of “primary” – what the hell does that mean?
“showing that ID does not necessarily mean that every detail is recorded – perhaps just nationality, not place of birth?”
I don’t know. To me it seems unlikely that Germany, powerhouse of the EU, would turn a blind eye to flouting of AEOI regulations considering the EU’s deep devotion to information exchange over so many years. But I’ve never lived in Germany and have never opened an account with a German bank, so I don’t know.
“Love the use of “primary” – what the hell does that mean?”
Where you live, perhaps?
I believe banks here use a standard software package to run AML/AEOI/KYC due diligence. The information visible to customers is presumably a subset of the information actually kept by the bank. Data such as tax-residence may exist only as a digital flag. But what happens under Canada’s relaxed approach may be a different kettle of fish.
Yes, not all data recorded on the back-end would be visible to or editable by customers online. I nevertheless thought it interesting to compare my very limited set of banks.
As for Germany (and anyone else) I’d be pleasantly surprised if they didn’t start looking at place of birth post-2014, but I don’t actually know that both things are recorded, and I expect that place of birth wasn’t standard customer data prior to FATCA/CRS.
I will conduct an experiment soon – possibly later this year if make a short trip I’ll try to open an account at one of the major banks using an old registration form (no longer valid but I wouldn’t ultimately open the account so no fraud) just to see if they notice the birthplace.
“In my own experience here, none of my regular banks (RBC and ING, now called Tangerine) have proactively asked CRS questions, though I don’t have vast huge balances either.”
FATCA/CRS letter from ING Belgium arrived at my UK address this morning, apparently asking for information I don’t have such as a UK Tax Identification Number. To be honest I’ve not looked too closely, threw it on the kitchen table in disgust.
All,
In some of the comments above I’m sensing a bit of a down-playing of the Canadian problem with regard to FATCA and CBT. I agree that there seems to be a hint of “don’t ask, don’t tell” in the Canadian banks, but it remains (for example) that banks *do* ask US-related questions when opening investment accounts. Retired people may be more aware of this than others. Sometimes, depending on the way a question is phrased, one could work one’s way around a perfectly truthful answer. But if there’s a question about birthplace (as there is on the RBC Direct Investing application) that’s a little tougher.
It also remains, that at last tally (which was a couple years ago, I think) over 300,000 Canadian accounts were reported to the IRS. I’ll bet it was even more in 2017. (Please correct me if my figure is incorrect.)
To suggest that there isn’t much of a problem in Canada is to belittle the very reason that we are suing the Canadian government for its betrayal of our community: there is currently a law, on Canada’s books, that allows our local banking establishments to treat a certain segment of Canada’s population differently on the sole basis of national origin. Whether or not harm has personally been experienced, the potential for harm exists in the very nature of this law. That’s why we’re going to court.
Hear hear, MNM.
Law in any country shouldn’t allow (let alone require) banks to treat customers as presumptive law-breakers on the basis of national origin. Whether the law is enforced is not the point.
“To suggest that there isn’t much of a problem in Canada is to belittle the very reason that we are suing the Canadian government for its betrayal of our community: there is currently a law, on Canada’s books, that allows our local banking establishments to treat a certain segment of Canada’s population differently on the sole basis of national origin. Whether or not harm has personally been experienced, the potential for harm exists in the very nature of this law. That’s why we’re going to court.”
Right on, Muzzled. The trouble is that the wheels of our system are turning so slowly I think its a good idea to make sure we aren’t turned into road-kill in the meanwhile. First I hated our government because their betrayal put us in this position and I now hate them all over again for using every dirty trick in the book to deny basic justice. Its especially galling that they are using our tax dollars to defend this betrayal.
I don’t enjoy having to lie every time I open an account but at the same time there’s no way I will allow them to turn me into a victim. The problem in Canada is not the US government’s stupid laws; it is our own government’s failure to protect Canadians from the foreign predator. That’s a big problem.
@MNM
I take your point. I think the lawsuit is important, and hope it succeeds. But it’s also the case that (a) banks in Canada aren’t trying terribly hard to find US persons and (b) given tax-treaty protections for Canadian citizens, there are effectively no (non-voluntary) consequences to being reported under FATCA for those without cross-border financial interests. However, until every US-Canadian dual knows that the risks of non-compliance are low, there is work do be done on the education front.
It’s also true that investment accounts perhaps are checked more carefully than regular bank accounts. I’ll go have a look at RBC Direct, try to open an account, to see whether I’m asked for place of birth, and whether my untruthful answer is in any way verified.
Also someone needs to do a FOI request for FATCA data, as Karen Alpert did in Australia. If there are no other volunteers, I might pursue that through my MP. Or have someone under the Brock letterhead ask a sympathetic journalist to start the process, since they have experience in these mattes.
Just opened a new US$ account at TD Canada Trust. one question is “are you a US citizen?”. Easy to answer “no”.
Those who are US citizens may not find it so easy to answer “no”.
Or they find it quite easy, and even satisfying, to answer “no” – particularly if they are also Canadian citizens.
Good for them, but that’s not my point – someone who is not and never has been a US citizen would find it easy.
So I went through the RBC Direct application process for a basic TFSA account, which pulled over some data from my regular RBC account. Interesting. There is some disconnect between questions in the web UI used to generate an application form, and the longer online application form itself, but that is a minor issue.
The application form includes checkboxes for Canadian citizenship and US personhood (“Are you a U.S. Citizen or a U.S. resident for tax purposes?”). Those who check yes to the latter will be required to complete a W9 for TFSA and investment accounts, but not RRSP-type accounts, with are exempt from FATCA reporting under the IGA. (That’s an improvement from my experience with the RBC DS broker some years ago, who wanted a W9 for RRSPs.)
Then, several pages later, there’s a section called “Substitute Form W-8BEN & Tax Residency Self-Certification” which asks you to list “all countries in which you are a resident of for tax purposes” and give appropriate identification numbers. They also ask for date of birth and country of birth. There are three rows where you can enter countries, and that is sufficient for self-certification, otherwise “Complete official W-8BEN IRS form and CRA Form—Tax Residency Self-Certification for Individuals RC520 form if you are a resident of 4 or more countries for tax purposes” – so they are not requiring you to sign a W8 unless you have obligations to more than three countries, of which the US is presumably one.
I will consider whether to complete and submit the application with Canada listed as country of birth, and “no” for US citizenship obviously, just to see if they make any attempt to validate my answers. I’m slightly wary of totally borking my regular banking with RBC, however, so it might be wise if I tried messing with the direct investing service of a major bank where I am not currently a customer – somewhat safer.
Nononymous,
If you mean the Canadian lawsuit, our litigators have asked Canada to provide detailed information on its “FATCA data”. Canada’s response to our questions (already posted on Brock) is here: https://netorg82979-my.sharepoint.com/personal/information_adcs-adsc_ca/Documents/Shared%20with%20Everyone/TrudeauFATCADiscoveryResponses2016.pdf?slrid=cd53579e-f0fa-5000-7018-f3b6ba9cedc3
If interested, you can of course try on your own a FOI request — I seem to recall that there is a cost for this. I have also approached a journalist for help.
We also wanted to know more about this so-called and critical reciprocal data that flowed from U.S. to Canada as part of the FATCA agreement. This was part of the justification Canada has for “agreeing” to the FATCA IGA.
Canada’s response to the request was: “On the advice of counsel. I am unable to answer” with the attached objection: “The Defendants object to Q. #4 and refuse to answer it because doing so may require disclosing sensitive information or potentially injurious information as those terms are defined in s. 38 of the Canada Evidence Act, R.S.C. 1985, c. C-5.”
See Canadian FATCA data (from 2017 CBC report) indicating that Canada Revenue Agency transmitted 315,160 banking records to the IRS on Sept. 28, 2016. See: http://www.cbc.ca/news/politics/taxes-internal-revenue-service-fatca-united-states-1.3954789
What happened in 2017? Canada responded to us : “… However, I estimate the number to be higher in 2017 as the deadline to review preexisting accounts that are Lower Value accounts is June 30, 2016 and those accounts that are U.S. Reportable Accounts would be shared with the IRS in 2017..”
BB – it depends what the question is.
Lying in response to a question about place of birth is not something I’d be willing to do. I suspect it would put me in the wrong, legally – which is not where I want to be.
But if asked only about US citizenship, I don’t think I’d have had any qualms about saying “no”. A person surely has a right to identify as a citizen only of one’s country of residence, if they’ve long since naturalised in another country, don’t use the US passport etc. And saying “no” can’t put you in the wrong legally, since US citizenship can’t be imposed (outside America) on a person who refuses to accept the designation.
@arvay
That first link you posted is requiring a login (it’s on Sharepoint). Is the document here on the site somewhere?
I said: “A person surely has a right to identify as a citizen only of one’s country of residence, if they’ve long since naturalised in another country, don’t use the US passport etc”
What constitutes “acting like an American?”
– filing US tax returns
– voting in American elections
– registering a defenceless child as a US citizen
but not using a US passport only to enter and leave the US, because that’s required by US law if you have a US birthplace, and you have to obey the law of the country you’re visiting. That’s acting like a person with a US birthplace.
Anyone who doesn’t file US taxes and doesn’t vote in US elections, doesn’t have any legal or moral obligation to identify himself/herself to a bank as a US citizen. IMO
The whole thing has turned into an ineffective, pointless sham. Ask a stupid question; get a stupid answer.
i have and will continue to lie on/to whatever forms or person that should happen to ask any question about my birthplace or ctizenship
“a canadian is a canadian is a canadian”
and
“that’s a recist question, are CANADIAN citizens born elsewhere less CANADIAN? i do not answer racist questions”
years ago when i first found out about FATCA i was angry, drinking to much, miserable to be around and depressed. now some 4 or 5 years later i am living my life much like i was before finding out about FATCA except for traveling to amerika.
i have opened bank accounts and updated existing ones and have taken out rrsp’s and filed my canadian takes with a company that has on its counter “american citizens must declare their citizneship at time of tax preperation” or words very close to that effect. i had no problem lying to each and every check box that i encountered because i am only a canadian citizen no matter what uncle sam says.
i was a contributior to the law suit and have watched it crawl through the court system for all these many years.
it is amazing that it is taking as long as it has been and how long it still will be. nothing will be better than when we see the IGA for what it is and that is violating my and every other CANADIANS charter of rights.
Just for giggles I went through the application process for a BMO direct investment account, specifically a TFSA (which is FATCA reportable).
They will accept a drivers license as government ID, which of course does not include place of birth information.
On the form there was a drop-down list for citizenship, and a second drop-down for “dual citizenship” – that’s all. Nothing about country of birth or tax residency. At the end of the rather long process, on the review page, there is this text:
Residency for Tax Purposes Certification
I certify that the information given on this form is correct and complete. I will give BMO InvestorLine a new form within 30 days of any change in circumstances that causes the information on this form to become incomplete or inaccurate.
That’s it, basically. Pretty easy. The online application actually ran a credit check to verify identity, which did not pick up on the fact that only one citizenship was reported. Pretty easy to fool.
Over the next few days I’ll try the other major banks. I don’t expect they are any more rigorous with their investment customers.
MuzzledNoMore – “Whether or not harm has personally been experienced, the potential for harm exists in the very nature of this law.“
And in its intention. The transition tax, and that GAO report showing the IRS explaining their plans to use FATCA reports to construct a database in order to track the Canada-source retirement savings of Canadian residents – these things alone should be enough to make Canada and all IGA 1 governments feel some shame. Do these governments actively support this predatory behaviour and want to facilitate it? Pretending that the victims are not being harmed, merely prevented from evading tax?
“What constitutes “acting like an American?”
– filing US tax returns
– voting in American elections
– registering a defenceless child as a US citizen
but not using a US passport only to enter and leave the US, because that’s required by US law if you have a US birthplace, and you have to obey the law of the country you’re visiting. That’s acting like a person with a US birthplace.”
Using a US passport to enter and leave the US is acting like an American because that’s required by law if you are American. Birthplace is irrelevant. A naturalized US citizen has to use a US passport. A renounced former US citizen can’t use a US passport. A US-born child of diplomats can’t use a US passport unless they’ve naturalized.
I’m not sure though, if a US non-citizen national who has another country’s citizenship (e.g. citizenships of American Samoa and New Zealand) can use another country’s passport to enter and leave the US.
Hmmm. If someone is a citizen of American Samoa and Australia but not a citizen of any COUNTRY other than Australia, can they sit in Australia’s Parliament?
Nononymous: Thanks for checking out BMO. Very interesting. And, yes, it would be wonderful to get another Freedom of Information finding as to how many accounts were “collected” by the CRS in 2017 for transmission to the US this year.
Stephen: I interpreted your comment to mean that the numbers for 2017 are not yet available. Is that correct?
I’ll do the rest of the major banks over the course of the week. I might push through some applications to see if they actually try to validate the information given. I expect they do not but it’s worth checking. Clearly BMO doesn’t care a fig if they only want to see a drivers license.
I will also look into making an access to information request along the same lines as what was done in Australia. It might be fun if lots and lots of people made requests! I searched the database available at
https://open.canada.ca/en/access-to-information
and found only one request that made reference to FATCA, which was presumably part of the lawsuit:
Request Number: A-2016-00005
Organization: Office of the Privacy Commissioner of Canada
Disposition: Disclosed in part
Year: 2016
Month: September
Number of Pages: 215
Request Summary: 1. Full and complete recommendations made by the Office of the Privacy Commissioner to Canada Revenue Agency (CRA) on Foreign Account Tax Compliance Act (FATCA) and Enhanced Financial Account Information Reporting; 2. Full and complete Privacy Impact Assessment submitted by Canada Revenue to Office of the Privacy Commissioner on Enhanced Reporting for Foreign Account Tax Compliance Act (FATCA); 3. Any other reports, recommendations, communications or other information to and from Canada Revenue Agency related to FATCA; 4. All other reports, submissions, recommendations related to FATCA made to the Office of the Privacy Commissioner from other government departments or agencies and from the OPC to other government departments and agencies. Please include briefing notes to the Commissisoner related to items 1 to 4. The serach timeframe for this request is from April 2011 to April 2016.
ND: “Using a US passport to enter and leave the US is acting like an American because that’s required by law if you are American. Birthplace is irrelevant.”
No – they won’t give you a visa if you’ve got a US birthplace, unless you can meet their criteria for proving you’re not one of their citizens.
If you haven’t got a US birthplace, no problem.