There has been a request to bring the subject of Security to the forefront. Another look at prior commentary on the subject follows.
Does FATCA pose an unacceptable security risk to Americans abroad?
Category Archives: Issues regarding US persons abroad
Robert Wood posts on renunciations, #FATCA, #Americansabroad
This Robert Wood post about renouncing citizenship (includes #Americansabroad) has had more than 100,000 views http://t.co/Yg22vypfxN
— U.S. Citizen Abroad (@USCitizenAbroad) August 9, 2014
Robert Wood deserves credit for keeping issues surrounding Americans abroad in the Homeland news. This is a good article . But, more to the point it has generated over 100,000 views and some intelligent comments.
This earlier Wood post on #Americansabroad renouncing because #FATCA is one of most read on Forbes w > 600,000 views http://t.co/qG5YvjfRCp
— U.S. Citizen Abroad (@USCitizenAbroad) August 9, 2014
Again, an interesting article with lots of comments.
Premier of British Virgin Islands offers assistance to local accidentals affected by FATCA
Following up on comments in early July in which he referred to FATCA as “universal law”, British Virgin Islands Premier D. Orlando Smith made another speech on FATCA late last month. I’m not impressed with most of this speech, but at least Smith acknowledged the fact that there are innocent accidentals in his territory, and even offered them concrete measures to ameliorate their difficulties:
However the BVI Government will, assist persons who consider themselves to need this support in meeting their reporting requirements to the US by providing useful advice and identifying professionals versed in US Tax matters to assist. … There are currently many BVIslanders who purely by birth, who may have been unaware of their obligations as US citizens. Last year we began a public information programme on the impact of FATCA on such persons and what they must do in fulfilment of their obligations to the United States. In the coming days we will reinforce these messages and announce the measures that we are taking to assist BV Islanders who are also ‘accidental’ Americans as we often refer to them in coming up to speed on their commitments to the Internal Revenue Service. These measures Madam Speaker will include a help desk at the Government Administration Building.
My response to Jack Townsend’s moral musings on private property or rather the lack thereof
At one time Jack Townsend seemed to be sympathetic to the plight of innocent so-called Americans abroad. Lately, however, he seems to have forgotten that we even exist:
U.S. Forfeits Over $480 Million Stolen by Former Nigerian Dictator (8/7/14)
He gets right down moralistic in this post. I think lawyers are better arguing law than they are morals–but because there is sometimes a relationship between law and morals, I suppose he feels qualified to make moral statements:
Of course, the human race is communal. If not, we would not have a human race today. Throughout most of our history, wealth was transparent to the community — maybe not in the sense of finite bottom-line net worth, but the trappings of wealth were physical. We knew who the guys with wealth were and, in a sense, we knew how wealthy they were. And we could assess the community’s coherence and bonding by how people contributed to the community and were rewarded for doing so. With secret financial institutions for hiding wealth, we lose that ability to assess and, as a community, demand what is best for the community.
So, as readers who have read this far, will know. I think transparency is a good thing. FATCA is a good thing. And the global initiatives it and the U,S. spotlight on tax havens have spawned are good things.
When it comes to trusts, “FATCA loves everyone”
Cayman Financial Review offers another clear-headed article about FATCA, this one by Peter A. Cotorceanu, a tax specialist in Zurich.
http://www.compasscayman.com/cfr/2014/08/08/FATCA–Has-Cayman-orphaned-its-trusts-/
Mr. Cotorceanu describes in detail how the Cayman Islands interpreted the original IGA boilerplate wording to its advantage, underlining the role of basic semantics in the complex imposition of FATCA. As a result, other jurisdictions may follow the Cayman’s example in restricting the application of the FATCA IGA only to trusts “…whose trustee is ‘incorporated, registered or licensed’ in the Cayman Islands.”
“U.S. can’t deliver on FATCA promises”
The Cayman Financial Review has just published an excellent new article by Brian Garst, political scientist, blogger and Director of Government Affairs at the Center for Freedom and Prosperity:
http://www.compasscayman.com/cfr/2014/08/08/U-S–can’t-deliver-on-FATCA-promises/
Contributing to a growing wave of understanding about Treasury’s lack of legal authority for its concoction of Intergovernmental Agreements, Mr. Garst examines the likely trigger for FATCA’s self-destruct mechanism: its increasingly evident failure and likely permanent inability to provide promised reciprocity to its so-called IGA partners:
Since its passage in 2010, financial institutions and their governments have scrambled to comply with the costly impositions of the Foreign Account Tax Compliance Act (FATCA). To entice foreign governments to assist in administration of the law and bypass certain legal obstacles, the U.S. Treasury Department has promised reciprocal information sharing. Now, however, they are admitting to having promised more than they can deliver.
The U.S. government’s assertion of authority over the global financial sector has redirected tens of billions of dollars away from productive pursuits and towards compliance efforts. So complex are the demands imposed by FATCA that the law, as originally passed, was almost assured to fail. There was simply little chance that thousands of individual financial institutions would be able to both comply with FATCA’s demands and continue to operate within the legal requirements of their host nations, particularly when it comes to protection of privacy rights.
To circumvent the issue of conflicting local laws, the U.S. Treasury Department conjured for itself powers and responsibilities not part of the actual legislation. Namely, they developed intergovernmental agreements (IGAs) to allow foreign governments to first collect information on American taxpayers before sending it to the IRS. Because institutions are sharing the information with their own governments rather than directly with U.S. authorities, and those governments are updating their laws accordingly, the IGAs allow for compliance with local privacy laws as well as FATCA.
As would be imagined, not every government has been thrilled by the prospect of upending their laws to placate U.S. fiscal imperialism. To entice skeptical foreign governments to sign the IGAs – without which the law would fail – Treasury promised to share similar information on any of their citizens investing in U.S. markets. Now, however, it’s becoming increasingly clear such reciprocation may never occur, throwing FATCA’s viability back into question.
Incidentally, author Garst’s motto is:
Malo periculosam, libertatem quam quietam servitutem
CBC News article on Harper strategy of legal confrontation: important comment opportunity
There is an otherwise (see below) excellent article on CBC News webpage today, discussing how the Harper government seems bent on a confrontation with Canada’s legal system by deliberately bringing forward legislation that Justice lawyers advise have only even a 1% chance or slightly higher of surviving a constitutional or Charter challenge.
Harper government strategy of confrontation with courts
I am a retired federal public servant who occasionally worked with Justice lawyers on legal matters and legislation though not in the Department of Justice itself. And I am not a lawyer. But — I do know from personal experience and discussion with Justice lawyers back then, that the Harper government approach, putting forward legislation that career lawyers in Justice doubt has even a 1% chance of surviving a court challenge, is a complete reversal of the standard used by all previous federal governments under which I served, including the three Progressive Conservative governments of Clark, Mulroney and Campbell.
The article lists, near the bottom, several recent pieces of legislation likely to be challenged in court and unlikely to survive court scrutiny. Disturbingly, however, Bill C-31 Section 5 (the FATCA/IGA implementation provisions buried in the omnibus budget bill) is not included in that list. CBC should have known to include that, given past stories and contacts we’ve had with some of their news writers.
This is an opportunity for Brockers and Sandoxers to blog a CBC story and to help raise reader awareness of the Charter and other legal issues that Harper and crowd have patently been ignoring re the IGA and FATCA. It also helps explain the careful choice of words the Finance officials were using in answering Opposition questions about Justice review of the legislation’s constitutionality under the Charter. My suspicion is that the advice that Justice gave Finance is that the probability the legislation could survive a Charter challenge was maybe more than 1% but probably not a lot more, certainly no more than perhaps 10% or so I’d guess.
This raises broader issues of Harper and crowds’ total disregard for “rule of law” in Canada and misunderstanding of the role our courts are supposed to play under our constitution, parliamentary democracy, and the Charter.
I’ve posted my own comment to the above effect in the story, still awaiting CBC moderation though. There are already hundreds of comments, most extremely critical of Harper and Justice Minister Mackay on this point, but I didn’t see any other FATCA related ones than mine, though I don’t pretend to have the time nor patience to wade through all those comments to check.
Another excellent reason to vote ABC (Anybody but the Conservative) in the next election, as well as another opportunity for Brocker and Sandbox bees to swarm and post to raise Canadians’ awareness of the issue.
Updates for Solving US Citizenship Problems Meetings- Belfast & Dublin August 2014
UPDATE DUBLIN VENUE:
When: Tuesday, August 12, 6:00 – 8:00 pm
Where: Quaker House, Stocking Lane, Rathfarnham, Dublin 16 MAP
UPDATE BELFAST:
When: Wednesday, August 20, 6:00 – 8:00 pm
Where: Belfast Castle, Antrim Road, Belfast, Antrim, UK BT15 5GR MAP
Presenter: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar. Citizenshipsolutions.ca
Admission: Dublin €15 / Belfast £15 cash payable at the door (to cover costs).
It is estimated there are 7 million U.S. citizens living outside the United States. Some of these people don’t know that the U.S. may consider them to be citizens. The vast majority of these Americans abroad (according to U.S. law), are required to pay taxes and complete information reporting forms to the United States. Although “citizenship-based” taxation has existed for years, what is new is the enforcement.
The U.S. has enacted FATCA (“Foreign Account Tax Compliance Act”) and has signed IGA’s (Intergovernmental Agreements) in many European countries including Ireland, the UK, France, Germany, and Switzerland. Financial institutions across the globe will be required to identify accounts of “US Persons.” Starting July 1, 2014, financial institutions will begin to determine what accounts are “reportable accounts.” Information regarding those accounts will be passed on to the tax agencies of each country, who will in turn, pass this information on to the IRS. These seminars will include discussion and analysis of the IRS “relaxed opportunities” for people to come into compliance and will focus on:
Citizenship Issues:
Are you a US citizen?
Are you still a US citizen?
Are your children US citizens?
What is an Accidental American?
Tax Issues:
Filing US tax returns
What is involved?
Filing information returns (FBAR, 8938, 3520A & 3520, 5471, 8621 etc)
Reasonable cause (avoiding penalties)
Financial Planning Issues:
Treatment of tax-deferred savings plans
Treatment of Mutual Funds (PFICs)
Privacy Issues:
What might FATCA mean for me?
Border Issues:
Will FATCA make it harder for me to cross the border?
Does it make sense to give up US citizenship?
Relinquishment
Renouncing
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.
China makes officials pledge to bring home overseas family members & give up foreign permanent residence or citizenship
Here’s another trend that could result in longer lines at consulates for American emigrants & their descendants seeking to give up U.S. citizenship. For the past several months, China has been conducting a large-scale search for “naked officials” — those whose immediate family members all reside abroad — by making all public employees fill out self-reports about their families’ possession of foreign citizenship and/or permanent residence.
Now they’re moving on to stage two: getting the officials to bring their family members back home and give up their foreign status, and punishing those who refuse. No time to do a complete translation, but here’s some excerpts from yesterday’s extremely lengthy New Beijing News report:
| 哪些人要填写这份“报告表”？各省份都将排查的覆盖面，定位在囊括乡镇、街道和企事业单位在内的所有国家工作人员，即所有“吃财政饭”的人员。例如浙江湖州市吴兴区教育局就要求，全区各学校、幼儿园在编教职工，局机关、直属事业单位全体工作人员，都要填表。也就是说，幼儿园教师也要上报配偶、子女国籍。 | Which people have to fill in this report form? The provincial investigations cover all national employees, including those in town and village, subdistrict, and public enterprises and institutions — that is to say, all employees who “eat government rice”. For example, the Education Department of Wuxing District, Huzhou City in Zhejiang Province has demanded that all employees teaching at at any school or kindergarten, as well as all personnel of organisations under the Education Department, fill out the form. In other words, even kindergarten teachers have to report their spouse’s & children’s citizenship. |
| 摸底排查后，各级组织人事部门还要跟“裸官”逐一“个人谈话”，让其在“接回家人”和“接受调岗”之间，作出“二选一”选择。选择接回家人的，还需填写《自愿放弃外国国籍、国(境)外永久居留权或长期居留许可承诺表》，注销外国国籍，并上交移居国家出具的注销手续凭证；拒绝接回家人的，则被调整出中组部规定的5类岗位。 | Following the exploratory investigation, personnel departments at all levels will then have to conduct “individual discussions” with all “naked officials”, to give them a choice between either “bringing home family members” or “accepting reassignment”. They will also have to fill out a “Pledge to Voluntarily Renounce Foreign Citizenship and Foreign/Territorial Permanent Residence or Long Stay Permit”, cancel foreign citizenship, and submit a certificate issued by the country of emigration attesting to the cancellation; those who refuse to bring home their family members will be transferred out of five types of posts listed by the [Communist Party’s] Organisation Department. |
Blending IRS overreach into other countries to target both Businesses and US Persons Abroad
Bubblebustin found and JC suggested the the following be a post:
Author, Peter Morici, starts out by blending US corporate and US personal of overreach of the US into other countries business and people:
President Obama, as promised, is changing America. High taxes and abusive enforcement are compelling businesses and ordinary citizens to leave the country altogether.
The United States has much higher corporate tax rates than other industrialized countries do, and increasingly, the IRS uses more aggressive enforcement tactics than foreign tax authorities use.