Category Archives: Issues regarding US persons abroad

Germany will not meet its Foreign Account Tax Compliance Act (Fatca) obligations if the US reneges on an intergovernmental agreement with the country, an observer of the US legislation warns.

….Frankfurt-based Martin Schulte, head of capital markets at the Association of Foreign Banks in Germany, agrees reciprocity is key for Germany to engage in an intergovernmental Fatca agreement. “The reciprocity is one of the key issues for the German government,” he says. “Although I don’t think the German Treasury expects there are too many German citizens hiding in non-transparent vehicles in the US, reciprocity is a matter of principle – like a balance of power and ‘we’re not just following the US wherever they go: if they want something from us, we want something back’.”

The comments come on the back of growing concerns that the agreement is not legally binding on the US side. As such, European participants fear US banks may struggle to supply relevant data to a growing number of individual countries as part of the reciprocity agreements, and may decide not to honour them.

Schulte expects the German government won’t take kindly to any kind of rescindment from the US on the intergovernmental agreement. “If it turns out the agreement wasn’t properly enforced on the US side, then I don’t think the German government would undertake substantial effort to enforce the German Fatca implementation, even though it’s going to be a national law,” he says.

As well as the five intergovernmental agreements, the US has entered into so-called model II agreements with Switzerland and Japan. Nordic countries have also been pushing for reciprocity-style agreements.

Schulte warns this may have a negative impact on the reciprocity process. “Unfortunately, if other partner countries insist on reciprocity too, US banks might face even more effort and compliance costs than their foreign counterparts, since they will have to identify and report customers from not only one but from various countries. It’s hard to imagine this could really work.”

http://www.risk.net/operational-risk-and-regulation/news/2194462/germany-may-ditch-fatca-if-reciprocity-agreement-not-honoured-experts-warn

By Vanessa Houlder in London and Shahien Nasiripour in Washington

The US and Europe’s five biggest economies unveiled fresh details of their coordinated push to crack down on tax evasion on Thursday, in a move that promises to ease the burden on financial institutions that have been enlisted to gather information.

The announcement paves the way for the US to exchange information on account holders who are citizens of the UK, Italy, Spain, France and Germany with tax authorities in those countries. In turn, those authorities are to share information on US account holders with the Internal Revenue Service, the US tax authority.

More at: Financial Times: US and Europe in accord on tax evasion

The FATCA IGA has been released by HM Treasury this morning. A couple of comments: This type of legislation being proposed to be enacted by the UK Government in Canada would be outright Charter violation. The UK admits to the agreement not being reciprocal and in fact the information UK will be getting from the US is basically the same as Canada is already receiving. David Cameron and George Osborne are also total losers.

Here is the quote from George Osborne:

Welcoming the publication of the model, George Osborne, Chancellor of the Exchequer, said:

“We need to be as tough on tax evasion abroad as we are at home. The Model Agreement constitutes an important step in tackling international tax evasion. We have achieved substantial changes to how FATCA will be implemented that will provide significant benefits to UK financial institutions while strengthening our ability to tackle the evasion of UK tax. I look forward to the prompt conclusion of our bilateral negotiations and the signing of our agreement with the United States.”

http://www.hm-treasury.gov.uk/d/joint_intl_statement_fatca_260712.pdf

An opportunity to raise the parallels between the Eritrean

situation and that of “American Persons” in Canada.

http://www.thestar.com/news/canada/politics/article/1231226–eritrean-government-using-consulate-in-toronto-to-impose-tax-to-bankroll-military-un-charges

There is no comments section up yet, but reporter is

Niamh Scallan  whose email is probably

nScallan@thestar.com

Also, http://news.nationalpost.com/2012/07/23/baird-troubled-by-reports-eritrea-using-toronto-consulate-to-extort-citizens/

sbell@nationalpost.com

Just Me wrote a wonderful post about the presidential candidates.  Here is a post about the senate races that I already published a few days ago on the Flophouse.  Re-reading it, I think I set the bar pretty low…

2012 is a major U.S. election year .  In addition to the presidential race there are quite a few Senate seats  up for grabs in 2012.  If Americans abroad decide to vote in large numbers it is quite conceivable that they will have an impact on how some of these races shake out.

Now I would not even think of telling anyone how to vote.  All I can do is tell you what is important to me and what I look for in a candidate.  To that end I thought it would be an interesting exercise to take a few of these races at random and tell you what I see when I look at their websites, platforms and biographies.

As an American abroad what am I looking for in a candidate?  First of all I would like to see some life experience that includes studying, traveling or living/working/serving in the military outside the U.S.  If the candidate is already in Congress, I want to know if he/she a member of the Americans Abroad Caucus and how he/she voted on FATCA.  For that matter,  does he/she ever mention issues of direct interest to Americans abroad (taxation, voting rights, citizenship, strong interest in foreign affairs) on his/her official website(s) or even acknowledge the fact that he/she has constituents outside the U.S.?  Is that website “expat friendly”.  In other words,  is it easy or hard for a constituent overseas to contact him/her via email or to make a contribution to his/her campaign?

I also include for each state an estimated number of expat voters from this site, the U.S. Elections Project and I used the 2010 “Overseas Eligible” numbers.  No idea if this reliable but it was the only information I could find.  For those who are interested in how some of the incumbents and candidates (those who are already in Congress) stood on H.R. 2847 (111th): Hiring Incentives to Restore Employment Act (father of FATCA) you can find their voting records here.

Hawaii:  Estimated number of eligible expat voters:  20,090.  Here is their Factsheet for voting from abroad.  What is the situation in 2012?  Senator Daniel Akaka (Democrat) is retiring.  Democrats appear to be divided between two candidates:  Ed Case and Mazie K. Hirono.   The Republican candidate is Linda Lingle.

Ed Case:  Former U.S. representative from Hawaii.  A quick look at his agenda shows no particular interest in issues of direct interest to Americans Abroad but he does have some experience traveling outside the U.S.  In his biography he says, “Perhaps the trip that influenced me most was a low-budget six-month backpack through Asia…”

Mazie K. Hirono:  A naturalized U.S. citizen (she was born in Japan). Three terms in the House of Representatives.  Member of the Congressional Asian Pacific American Caucus.  Not a member of the Americans Abroad Caucus.  Official website is not  “expat friendly” and does not make it easy for non-residents of Hawaii to contact her.  I could not find anything on her campaign website mentioning issues of direct interest to Americans abroad.  Hirono voted for FATCA.

Linda Lingle:  Former governor of Hawaii.  No experience abroad noted.  Her website does indicate that she is interested in Asia-Pacific economic relationships and in tax reform.  Like many others her “Donations” page asks for a U.S. city, state and zip code. It is possible to contact her campaign directly through email or snail mail here.

California:  Estimated number of eligible expat voters:  486,207.  California’s Secretary of State has this very nice, very friendly website for those voting from abroad.  The incumbent senator, Diane Feinstein (Democrat), is up for re-election.  Her opponent is Elizabeth Emken (Republican).

Dianne Feinstein:  Her biography lists no overseas experience but she has a strong interest in foreign affairs.  Her website does not reveal any particular attention to civilian Americans abroad.  Her “Contact by Email” page requires that an overseas constituent select a U.S. state and give a local zip code. Feinstein voted for FATCA.

Elizabeth Emken:  Her biography shows that she studied in the UK at Cambridge University. Looking at the list of issues that is interested in, most of them appear to be local.  Her “Donations” page does not allow for a foreign address and the “State” field will only permit her military constituents to indicate that they are out of the country (Armed Forces Europe/Canada/Asia).

Pennsylvania:  Estimated number of eligible expat voters:  203,791.  For help voting from abroad there is this website for overseas civilian voters.  The incumbent for this senate seat is Robert Casey (Democrat) and his opponent is Tom Smith (Republican).

Robert Casey:  No overseas experience on his official biography but under his Issues and Priorities he shows a strong interest in foreign affairs and is a frequent traveler abroad:  “In July, Senator Casey led a Senate delegation to the Middle East to discuss the ongoing threat posed by Iran and to review developments in the Middle East peace process. Senator Casey traveled to Saudi Arabia, Kuwait, Iraq, Israel, the West Bank, Lebanon and Egypt where he met with top officials. He met with U.S. troops in Iraq and Kuwait. In Iraq he also met with Vice President Biden and General Ray Odierno, Commander of U.S. troops.”  The “Contact“ page on his website calls for a state and county but the only overseas voters that are taken into account are military (FPO/APO).

Tom Smith:  No experience abroad on his biography and there is no particular attention to the interests of Americans abroad on his Issues page. His “Contributions” page only has a few options for those living outside of the U.S. (American Samoa, Virgin Islands….)

Wisconsin:  Estimated number of expat voters:  33,788.  The State of Wisconsin has this fine site explaining overseas voting.  The incumbent in this senate race, Herbert Kohl (Democrat), is not seeking re-election and the primary is not until August.  Tammy Baldwin is the candidate from the Democrat party and I count no fewer than six contenders on the Republican side so I will select two at random: Marc Neumann and Tommy Thompson.

Tammy Baldwin:  Her biography reveals no overseas experience and her Issues page is almost 100% devoted to domestic concerns. She says that “fighting for Wisconsin’s middle class is her top priority.”  Not clear if she would include the interest of middle-class overseas Wisconsin constituents in her fight.  In the State field of her “Donations“ page an overseas voter can select some areas outside the US:  AA, AE, AS (I think this is for overseas military voters) but also GU (Guam?) and PR (Puerto Rico).  A bit confusing for a civilian voter from, say, Europe.  Baldwin is currently serving in the House of Representatives but does not appear to be a member of the Americans Abroad Caucus.  Her “Contact” page is not expat-friendly. In fact it clearly states, “Regrettably, I am unable to reply to any email from constituents outside of the district.”  Baldwin voted “Yes” on FATCA.

Marc Neumann:  No experience overseas on his biography and no particular attention to Americans abroad on his website.  He is, however, a supporter of tax reform, “a simpler, fairer, and flatter tax system with fewer loopholes.”  Not sure if this can be interpreted as something that would help Americans abroad. His “Donations” page requires a State and it’s not clear if an overseas donor would be able to complete the form with a foreign address.

Tommy Thompson:  No overseas experience on his biography and I found no issues of direct interest to civilian Americans abroad anywhere on his website.  He is, however, for tax reform and wants to “simplify taxes for individuals.”    His “Donations” page requires a State but a voter can select AE, AP and the like if one is (I think) overseas military.  Again it is not clear if a civilian voter can complete the form with a foreign address.  His “Contact” page does not require an physical address – just a name and email address.

I’ll stop there.  All the information above was what I was able to glean from on-line sources.  It is entirely possible that the above candidates have a more complete (more nuanced) approach to their overseas constituents that they just didn’t feel compelled to share. If that is the case, I’d be delighted to hear their reasoning for hiding their light under a bushel.   As always, feel free to disagree with (or correct) me if you feel that the candidates above are misrepresented.  And finally if you are an American abroad who plans to vote in 2012, I would love to hear your take on the federal elections in your home state.