The PURPOSE of this post is to thank the courageous Dutch citizen (below), the Jennys, the Gwens and Kazias, the Fabiens, the Marc Zells (and their Plaintiffs), and all others who decided to take their complaints and their names to an actual Court of Law to stop imposition of these bad U.S. laws on their own countries.
[This news came from Fabien Lehagre and the AEFNJ.]
A Dutch citizen, who left U.S. as an infant, went to Court to contest his bank’s requirement that he needed to obtain a U.S. Tax Identification Number (TIN) for his accounts.
The Central Netherlands District Court ruled in an Interim Injunction on December 23, 2020 that the Volksbank may close one of his accounts and that the Dutch citizen would have to pay part of “costs”.
— There will be different reactions to this litigation, but there will be some who feel the need for many more citizens of Netherlands and other countries to lodge these complaints against their own governments.
From the Court Ruling (see link), here are some of the Dutch citizen’s complaints (using Google Translate to English)[Do you agree with his arguments?]:
[Claimant] puts forward four arguments on this point, which – in short – read as follows:
— It is not Volksbank’s task to enforce compliance with foreign law. There is no Dutch legal basis for this and there is also no Dutch legal obligation to request a TIN.
— Possible obligations of Volksbank under US law must give way to the right of [claimant] to a (basic) bank account. Volksbank must respect the fundamental rights of [claimant] (arising from, among other things, the GDPR and the ECHR).
— Volksbank may not put the problem of extraterritorial US regulations on the hands of [claimant] by terminating the relationship. Instead, the banks, in collaboration with the Dutch and European governments, must make an effort to improve the position of the Accidental Americans.
— For the time being there is no question of American sanctions against financial institutions such as Volksbank and by allowing the claims of [plaintiff] in these interim relief proceedings, Volksbank can demonstrate that it has fulfilled its best efforts obligation to obtain a TIN from [plaintiff]. Such an obligation of best efforts complied with averts the risk of US sanctions.
The preliminary relief judge is of the opinion that these arguments of [claimant] are unsuccessful and explains this below.]
— This termination is contrary to legal and contractual obligations (including the General Banking Conditions) and also unlawful.
— Volksbank may not assume that [plaintiff] is guilty of forgery and tax evasion and may not terminate the banking relationship on that ground. By terminating on these grounds anyway, Volksbank provides [plaintiff] with a bad history, which prevents him from entering into a new banking relationship with another bank.
— The termination of the bank relationship must be assessed on the basis of neutral grounds for termination on the basis of the usual assessment framework. In that context, a weighing of interests must take place and this works out in favor of [claimant], because the consequences of termination for [claimant] are too great. It is essential for him to have access to the banking system and to keep his retirement products.”
Re-post of comment made earlier on the media thread, in reaction to the American Expat Finance article:
Unfortunate but not surprising. While I am not a lawyer, let along a Dutch lawyer, I thought the odds were not good based on reading about the earlier tribunal (KIFID) decision. Apparently Dutch banks may close a customer’s account if they believe it to be used for purposes of fraud, tax evasion or other random criminality. When Mr. Ariës publicly declared that he didn’t want to acquire an SSN because it might cause him to owe US taxes, he essentially sealed his fate.
At some point I’ll plug the whole decision into Google Translate (which is surprisingly good now) but that short excerpt sums it up well, the judge essentially saying that the whole situation sucks but politicians are responsible and there’s only so much he can do within the limits of the law.
The frustrating aspect to this case is that Mr. Ariës got it fundamentally wrong – being forced to supply his bank with an SSN creates no US tax bills for him. But by going to the tribunal, and then to the press, and then to court, he started in motion a process that would never end well for him. If he sacrificed himself for the sake of some publicity and general outrage, we can thank him if it helps solve the bigger problem. It may or may not.
At this point it’s probably going to be cheaper for Mr. Ariës to shut up and renounce – once that becomes possible – rather than continue paying lawyers to fight this. In the meantime he might need to live without a Dutch bank account – with luck he should be able to open an online account in another eurozone country where he’s less notorious. Hopefully by now someone has explained to him that he can obtain his CLN without ever filing a US tax return.
I don’t think the outcome would be any different in Canada, to be honest. If I went to one of the major banks and identified myself as a US citizen then pointedly refused to provide them with an SSN, they would take action – threaten to close the account, or impose a trading freeze for investments. If I complained to a banking regulator, I’d lose. If it took the bank to court, I’d lose. As for public sympathy, I doubt I’d gain much – every time this subject comes up in a CBC article, most of the comments express a “pay your fair share” or “you benefit from US citizenship” sentiment.
Here is a Time Magazine article on this issue, dated Dec 23 2020
I got out in 2015. I’m asking my 2 children to do the same– now– before it becomes impossible. As much as no one should “have to” give up their country of birth, when that country becomes predatory, I don’t see any way to stay in that soured relationship. I didn’t have much hope before Trump & Covid, and now I really can’t see any light as the tunnel seems to circle back to itself. I wish everyone the best outcomes, but don’t take too long.
If your children were born outside the US and have dual citizenship, it’s less urgent. My own now-adult child is in that situation and has been advised to do nothing more than keep it a deep dark secret.
I’m in Canada, dual with a US birthplace, and feel no pressure to renounce – there is essentially no FATCA enforcement. I’m doing it for other reasons – anxious parents with an estate, and a potential move to Europe. I put myself on the list the minute the election result was in because I figured demand would increase. (Added bonus, it will be free or at least heavily discounted this year if one wishes to collect the stimulus benefit.)
Got out in March 2014. Best decision I ever made.
Thanks for the link to the Time article, which sadly makes frightening reading.
Andrew: Thank you for posting the Time article. It’s great the issue is back in the major press. I’m just so sad and angry about what the people cited in the article are going through. My heart goes out to them.