UPDATE August 26 2015: $500,000 DONATED FOR LEGAL FEES, 18 (OR LESS) DAYS TO SUMMARY TRIAL DECISION IN SEPTEMBER.
SEE AUGUST 20 2015 BLOOMBERG BNA ARTICLE ON OUR LAWSUIT. See also this recent commentary on the trial issues by Roy Berg and John Richardson’s thoughts on Mr. Berg’s commentary. For copyright reasons the article has to remain (uncopied) on our ADCS blog.
— We could not have funded this lawsuit without the help of our Australian supporters.
Alby and Embee remind us below of the “gun-to-the-head” reason why Australia capitulated to the U.S. and signed a FATCA IGA. Taken from a 2014 Australian Government Committee discussion:
“Mr WHITELEY: Even though FATCA does not attempt to directly impose penalties, it does. There is no question about that. So any non-compliance is a penalty. How have other countries that have significant interests in the US responded to this across the board?
Mr Allen: As I said, they have signed these intergovernmental agreements to avoid that kind of penalty.
Mr WHITELEY: They have signed them but what has been the take on the gun-to-the-head approach? You must have discussions with other countries. They may have got there in the end but what are their feelings on this?
Mr Antioch: I stand to be corrected by colleagues, but I have personally not struck in my international dealings with colleagues any strong reservation about having this so-called gun to the head. Everybody acknowledges it is a weapon.
CHAIR: When is a gun not a gun? If it is not a gun, is it a spear?
Mr Antioch: It could be a machine gun. It could be a missile. It could be lots of things.
Mr WHITELEY: I think at $255 million—
CHAIR: It sounds like a nuclear weapon.
Mr WHITELEY: it could be nuclear weapon.
Dr STONE: But you get a non-complying financial institute stamp if you do not do it.
Mr WHITELEY: We do not think for one moment that the $255 million cost to the financial institutions is going to come out of nowhere. We know who is going to pay it. Their clients are going to pay it.
Mr Antioch: That is right. Inevitably, that is quite correct…
…Dr STONE: I think this is a very interesting point. You are asking us to comply with this agreement but we do not have reciprocity yet. It is an aspiration. And, when we do, it is not expected that the withholding tax initiatives will be reciprocal. You are also telling us that the G20 is looking to evolve a global or cross-nation tax avoidance framework. So what is the rush? Why are we entering into this right now with the USA? Why don’t we wait until that evolution and until there is better reciprocity—I would argue complete reciprocity—before we impose what are, as our chair said, quite significant costs on the Australian financial system?
Mr Wood: What underpins this agreement is the US FATCA regulations, which operate unilaterally. That is where the withholding tax comes into play. The withholding tax would apply if we did not sign the agreement. The US FATCA regime commences on 1 July, so that is the rush—to get something in place by 1 July which would actually save our financial institutions from incurring the withholding tax…
…Mr WHITELEY: Nothing like a good gun to your head—
Dr STONE: It is called capitulation.
Mr WHITELEY: In an environment where we are trying to reduce costs on business, $255 million is an extraordinary amount of money coming out of the Australian economy.
Dr STONE: I think Mr Whiteley has belled the cat in the sense that I am not yet convinced of the value for Australia in this…” [etc. etc.]
AUGUST SUMMARY TRIAL UPDATE: JUSTICE MARTINEAU WILL TRY TO RENDER A DECISION BY SEPTEMBER 13 — before the date CRA will turn over private financial information to the U.S. IRS. Notre procès sommaire est maintenant terminé, il ne reste qu’à attendre la décision du juge Martineau en septembre.
OUR BRIEF LITIGATION HISTORY: One year ago, on August 11, 2014, Litigator Joseph Arvay filed a FATCA IGA lawsuit in Canada Federal Court on behalf of Plaintiffs Ginny and Gwen, the Alliance for the Defence of Canadian Sovereignty (en français), and all peoples.
Because of a Government delay we initiated a “summary trial”, using some of the arguments, which offered the possibility of preventing bank information from being turned over to the IRS before September 30, 2015. The summary trial took place on August 4-5 2015 and we hope to have a decision by September 13 2015 (a sunday).