Liberty and justice for all United States persons abroad

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Category Archives: Issues regarding US persons abroad

Professor Sandel’s @JusticeHarvard course: The shaping of the mind of a prosecutor of offshore crimes

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Former US Attorney Preet Bharara was an apparent crusader in the war against all things foreign. His office participated in the well publicized nine billion dollar fine against the French Bank BNP Paribas. In simple terms, the U.S. Department of Justice imposed a fine on BNP Paribas for: “Conspiring To Process Transactions Through The U.S. Financial System For Sudanese, Iranian, And Cuban Entities Subject To U.S. Economic Sanctions”. In other words, the United States claimed jurisdiction over BNP Paribas because it used the U.S. dollar.

Interestingly the the fine was based NOT on a violation of a U.S. law passed by Congress, but rather on the basis of a breach of an Executive Order signed by President Obama. (This reminds me of the Trump administration of today sanctioning companies that do business with Iran in violation of U.S. sanctions against Iran.)

The Economist in an article titled “No way to treat a criminal – The French bank deserved a clobbering, but America’s legal system looks like an extortion racket“, commenting on the process concluded that:

So even if BNP fully deserves its punishment, the legal system that meted it out is closer to an extortion racket than justice. France’s economy minister, Arnaud Montebourg, has compared America’s pursuit of BNP to “economic warfare”. In other words, a bank that catered to mass murderers has had some success in portraying itself as a victim. Any process that can make BNP’s dealings with Sudan look anything less than shameful must be very flawed indeed.

From Mr. Bharara’s perspective (from the June 30, 2014 Department Of Justice media release):
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Sovereignty and International Law 1: The right to define citizenship as an attribute of a nation’s sovereignty under international law

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Commenting on the last post “Although citizenship matters, not all citizenships are the same. Americans are just different …“, Tim Smyth writes:

I am usually not one for optimism but I think Sophie In’t Veld latest response back to the Commissioner which literally came after one day from the Commission’s original response is very much on target and has dramatically reduced the Commission’s room for maneuver. To give some background I am a huge fan of Sophie’s and acknowledge she has been involved in this issues for a better part of 10 years(almost as long as me personally) however, she is not directly related to these issues on a personal level like we are and it has taken some time up until recently for her and her staff to understand this stuff the way “we” understand it. Thus I feel her latest response is an important sign that there is at least someone in elective office somewhere that truly understands these issues the way “we” understand it. (To give some background much of Sophie’s early work on these issues was passed on privacy law and data protection which is her bailiwick more than taxation or nationality which is not. You can see however she has become much more educated on taxation and nationality in recent years).

In terms of what comes next I think there are a couple possibilities. At this point the Commission has some real decisions to make with real political consequences.

1. The Commission can simply decide to respond back to Sophie and blow her off. This might be the “Safest” option but they have not taken this option to date in previous rounds of questioning and institutionally they might feel that pure insubordination is non viable.

2. Say the US can impose CBT but no other “third” country can. Again I am not sure how successfully this can be spun without looking like complete stooges of the US. Also there is not any legal justification I can think as to why the US can impose CBT but no “other” state can under international.

3. Say everyone can impose CBT and define “their” citizens however they wish under international law. This is the logical followup to Commissioner Gentiloni previous response and one that has the most sound basis under international law if you believe the US is entitled to impose CBT under IL however, it would obviously be a practical, political, and logistical nightmare. I will discuss later what are some of these implications

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The purpose of this post is to explore various aspects of the concept of citizenship seen through the lens of international law. This is an interesting topic in it’s own right. (It is particularly important in the context of Cook v. Tait.) A basic assumption of the Harter and Gentiloni letters is that the it is the sovereign right of the United States to define who its citizens are. The problem becomes when the United States defines European citizens as US citizens, when those US citizens are residing as European citizens in Europe.

The following questions come to mind:

1. Under what circumstances can the United States expand it’s definition of a U.S. citizen in an extra-territorial manner?

2. Under what circumstances can the United States apply its laws to European citizens living in Europe?

3. How does the assumption that countries are fee to define its citizens operate in a world of dual citizenship?

4. Under what circumstances does the sovereign right of the United States to define who its citizens are encroach on the right of European countries to define its citizenry?

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Although citizenship matters, not all citizenships are the same. Americans are just different …

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Introduction

This is the fourth post in which I have discussed the plight of Accidental Americans in Europe. In my first post I discussed the message from the Homeland, delivered by Chip Harter to the European Union. The message was that Accidentals should Either file U.S. taxes or renounce U.S. citizenship. In my second post I discussed the message from the Home country, by Mr. Gentiloni – the European Parliament’s message to Accidentals. This message was: Nationality ties come with obligations including paying taxes to America. These messages came only days apart. (To say that European Accidentals are having a bad month would be an understatement.) The third post discussed the fact that European Accidentals are under attack from both sides of the Atlantic.

The fourth post – Identifying the component parts of the message …

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European Accidental Americans under attack from both the Homeland and from their Home Country

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Updated April 11, 2020 to include the information in the following tweet:

Back to the original post of April 10, 2020

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This is the third post in which I have discussed the plight of Accidental Americans in Europe. In my first post I discussed the message from the Homeland, delivered by Chip Harter to the European Union. The message was that Accidentals should Either file U.S. taxes or renounce U.S. citizenship. In my second post I discussed the message from the Home country, by Mr. Gentiloni – the European Parliament’s message to Accidentals. This message was: Nationality ties come with obligations including paying taxes to America. These messages came only days apart. To say that European Accidentals are having a bad month would be an understatement.

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EU to #AccidentalAmericans: Nationality ties come with obligations including paying taxes to America

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In a previous post I described America’s direct message to European Governments and to European residents who were born in America.

The message was simple, clear and unambiguous:

You either comply with the American extraterritorial taxation (and reporting) regime or you renounce!

Understandably, European citizens have looked to their Governments to protect them. As a case in point:

On February 11, 2020 Mr. Bellamy of the European Parliament posed the following question for answer, (pursuant to Rule 138), to the European Commission:

‘Accidental Americans’ is the term used to describe 300 000 Europeans who, while born in the United States, only lived there for a very short while or not at all.

Ever since the vote on the Foreign Account Tax Compliance Act (FATCA) in 2014, they have been targeted by the US Government, which is demanding they pay US taxes on income that is paid to them outside of America. ‘Accidental Americans’ who declare their income in the countries of which they are citizens and where they reside have even had to face the prospect of having their bank accounts closed. Banks have been threatened with having to pay almost 30 % in taxes on all their financial flows transiting through the United States. This state of affairs was placed on hold by an 18-month moratorium.

Will the Commission take action to defend its fellow citizens by guaranteeing them access to a bank account and fair treatment on tax, in order to protect them from the arbitrary extraterritorial application of this law? Are there plans to renegotiate the agreement on implementation of FATCA on an EU-wide basis, with identical reciprocal sharing obligations for both sides of the Atlantic?

https://www.europarl.europa.eu/doceo/document/E-9-2020-000816_EN.html

At its core, the question is asking whether the European Parliament would take action to defend European citizens, from the extra-territorial application of US law, to European residents who, the United States claims to be U.S. citizens. (Note that the FATCA IGAs allow the United States to define and redefine who is a U.S. citizen). Paolo Gentiloni replied as follows:

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United States Of America To Accidental Americans: Either file US taxes or renounce

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Part A: Background

On March 3, 2020 I wrote a post on Brock, which was based on the problem of FATCA IGAs requiring banks to include US Social Security numbers, in their FATCA reporting.

Basically there is a tension between:

On the one hand the banks are required to include the Social Security Numbers of their US clients. On the other hand, many people who are “technically” US citizens don’t have Social Security numbers.

This is a problem that has long been in the making. My March 3, 2020 post described the problem and referenced the work of CBC reporter Elizabeth Thompson’s reporting on this problem. The post also included a background/summary of the events leading to the problem (which has been included in this post as an Appendix*).

US Treasury has said very little about this issue.

Described by Helen Burggraf as …

The U.S. Treasury is continuing to maintain its silence with respect to the issues European banks have been struggling with for months over their perceived need to report to the U.S. – under the tax evasion law known as FATCA – government tax information details on certain of their American account-holders that they don’t have, European banking sources, expat groups and others report…

This is in spite of the fact that so-called “accidental Americans” in Europe are continuing to have their non-U.S. bank accounts frozen in cases where their banks say they have failed to provide “Tax Information Numbers” (TINs, typically Social Security numbers) as the banks say FATCA requires them to have as of the end of last year, according to sources in the accidental American community.

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The Extradition Series – Part 2: The Canadian Extradition Process In A Nutshell

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This is the second of in my series of posts exploring extradition. The first post described the increasing importance of extradition in an increasingly unpredictable world. Individuals are clearly becoming more and more aware of the risks of being forcibly transplanted to face criminal proceedings in another country. The examples discussed demonstrate the risk of extradition to face the justice system in a country where no crime was actually committed. The United States appears to be aggressively interpreting its laws to apply in an extraterritorial manner and is willing to aggressively apply those laws to people who have no presence in the United States. What is most frightening is that extradition treaties allow the United States to get other countries to retrieve those accused and arrange for their transportation to the United States.

The purpose of this post is to identify and briefly describe the role of the various laws and practices which are engaged in a request for extradition. I will use Canada as the model. Note that Canada allows for extradition to and from a large number of countries. Therefore, let’s begin our analysis with a “Canada Centric” view of extradition.

Treaties and statutes are written in technical language. They take time to understand. Therefore, let’s begin with a simple overview of Canada’s extradition process, which is found Canada’s Department of Justice website.

extradition_eng

The description of extradition from Canada’s Department of Justice can be summarized as two categories of information.

Category 1 – What are the legal tools governing extradition?

“Extradition in Canada is conducted in conformity with the Extradition Act (Canada’s general law applying to extradition with all countries), international treaties (Country specific agreements) and the Charter of Rights and Freedoms (applicable to all individuals subjected to the Extradition process). All individuals are afforded fair treatment and due process (this is clearly aspirational).”

E-23.01

Conclusion: The law of extradition is an amalgamation of domestic law, constitutional law and treaties. Interestingly this is analogous to the law of FATCA, which is also a amalgamation of treaties/international agreements and domestic law (The FATCA IGAs were enacted into the Income Tax Act as Canadian domestic law. The purpose of the Alliance For The Defence Of Canadian Sovereignty lawsuit is to seek a ruling that Canada’s Charter of Rights also applies to the FATCA issue.)

Category 2 – How does the extradition process (from beginning to end) unfold in the context of those legal rules?

There are three phases to the extradition process:

1. Authority to Proceed: the decision to commence the proceedings by issuing an Authority to Proceed; this decision is made by Department of Justice officials.

2. Judicial Phase: the extradition hearing, which takes place before a judge of the superior court. Note that the extradition hearing is NOT a hearing on the merits of the case. The extradition hearing is a hearing on whether the requirements of the Extradition Act and the Tax Treaty have been met. More on the requirements to extradite later. The result of the “Judicial Phase” will be a decision on whether the requirements to extradite have or have not been met. If the answer is “no”, then (subject to an appeal) the case would end. If the answer is “yes”, then the decision to extradite will be in the hands of Canada’s Minister Of Justice.

3. Ministerial Phase: the decision on surrender, which under the Extradition Act must be made by the Minister of Justice. This decision cannot be delegated to officials. At the end of the day, the Justice Minister makes the decision. It is entirely possible for the Justice Minister to decline to extradite even if the result of the “Judicial Phase” is the conditions to extradite have been met.

About the possibility of appeal

The individual sought may appeal the decision of the extradition judge and/or apply for judicial review of the Minister’s decision to the Court of Appeal in the province where the extradition hearing took place.
If the Court of Appeal upholds the decisions of the extradition judge and the Minister, the individual may seek leave to appeal either or both decisions to the Supreme Court of Canada. The Supreme Court will only hear appeals that raise issues of public importance.

The third post will discuss the legal prerequisites that are necessary to support an extradition order.

The text of both Canada’s Extradition Act (Appendix A) and the Canada US Extradition treaty (Appendix B) are included below.

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The Extradition Series – Part 1: As The World Becomes Smaller, Extradition Becomes Bigger

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Prologue – Extradition as perceived by the great powers

The public may not understand the technicalities, but it does understand the risk

China – Proposed changes in a Hong Kong law

The freedom fighters in Hong Kong were spurred into action by the threat of a Hong Kong law that would allow extradition to China. This is the world’s most visible symbol of the importance of extradition.

The United States – The Julian Assange extradition hearing

In a lengthy and well organized comment, Embee (of Isaac Brock Society fame) opines that the Assange extradition hearing was “a matter of inhumane treatment at the direction of the UK judicial system and a blatant overreach by the US in order to punish and make an example of a journalist who revealed that which they did not want to be public knowledge”. Embee further notes that:

The UK judge, Vanessa Baraitser, not only denied Julian Assange the dignity of sitting with his lawyers during that portion of the trial (he was in a glass cage, could barely hear what was being said in court and could not communicate confidentially with his lawyers), she has denied him bail knowing full well he is already in poor health and could be very vulnerable to an outbreak of COVID-19 in Belmarsh Prison.
https://consortiumnews.com/2020/03/25/assange-extradition-assange-denied-bail-further-visits-despite-virus-risk/

Extradition is becoming a very important political (and possible immigration) issue

There are many things in life that are invisible until you become aware of them. I have never given much thought to extradition. My basic understanding of extradition (to the extent that I understood it at all) was that it was a process to return criminals to the country that had jurisdiction over the crime. For example, Britain is attempting to extradite Anne Sacoolas back to Britain, to stand trial for the death (homicide?) of Harry Dunn. In this instance, it’s agreed that Ms. Sacoolas, while driving on the wrong side of the road, hit Harry Dunn and that resulted in his death. It’s clear that this occurred in Britain. It’s also clear that Ms. Sacoolas returned to America and has refused to return to Britain to stand trial. In a statement which is indicative of the height of American hypocrisy, her lawyer, Amy Jeffress, is reported by the Guardian to have said:

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FATCA At 10 – A Celebration: FATCASpeak – Double Plus Good Thought

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The last words of Orwell …

As goes language, so goes the the capacity for critical analysis

A trip down memory lane – A Brock post from June 10, 2013

 

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain inalienable rights, that among these are life, liberty, and the pursuit of happiness. That to secure these rights, Governments are instituted among men, deriving their powers from the consent of the governed. That whenever any form of Government becomes destructive of those ends, it is the right of the People to alter or abolish it, and to institute new Government…

It would have been quite impossible to render this into FATCASpeak while keeping to the sense of the original. The nearest one could come to doing so would be to swallow the whole passage up in the single word crimethink. A full translation could only be an ideological translation, whereby Jefferson’s words would be changed into a panegyric on absolute government.

A good deal of the literature of the past was, indeed, already being transformed in this way. Considerations of prestige made it desirable to preserve the memory of certain historical figures, while at the same time bringing their achievements into line with the philosophy of Amtot. Various writers, such as Eric, Orwell, Just Me, Em, Badger, Calgary, Plato, Petros, Deckard, Joe Smith, SwissPinoy, Jefferson Tomas, Blaze, Outraged Canadian, Roger, Nobledreamer, Tim, Victoria, Bubblebustin, Recalcitrant,  Markpinetree, Pacifica777, Calgary411, Bubblebustin, usxcanada, RenounceUScitizenship and some others were therefore in process of translation: when the task had been completed, their original writings, with all else that survived of the literature of the past, would be destroyed.

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An important public service update – Renunciation/relinquishment appointments in Canada

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Update May 15, 2020 …

There will be no appointments to renounce US citizenship in Canada until after June 30, 2020 at the earliest.

No renunciations …

Too bad, net worths are falling daily meaning that fewer renunciants would be covered expatriates and subject to the Exit Tax.

It’s unclear whether renunciations are being processed in any countries.

No passports …