What The FATCA Does Cyprus Have To Do With Canada?!?

CBC is reporting:  Four Reasons Tiny Cyprus Matters To Canada.

Under the terms of the Cypriot proposal that emerged Friday evening from Hands Off CyprusEU, any bank account with less than €100,000 in assets would see 6.75 per cent withdrawn as part of the one-time levy. Anything over that level would get an even larger haircut — 9.9 per cent.

 

“Pay attention, please,” Southwest Securities managing director Mark Grant told clients in a recent note. “The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence.

“Bank accounts are not bonds or stocks or some other form of investments,” Grant said. “It is private property like your house or your car. Germany, France et al came in and said, ‘We want it and we are taking it.’”

Faith that your bank savings are safe is the bedrock of a healthy economy. So a lack of faith in the banking system is the kind of thing that leads to the next reason Canadians ought to be concerned about Cyprus.

All of the reasons given are very valid about why we should all be very concerned about what is happening in Cyprus.

Does the CBC know what is happening in Canada with FATCA?  That should matter to Canadians even more.

Yet, our government and media remain silent.

 

Expert: FATCA Violates Charter

Here is what Tim promised yesterday.  Arrow’s article from Vancouver Sun:

Compliance with FATCA May Violate Charter of Rights

Great news to wake up to this morning. Many thanks to Noble Dreamer for posting this under What’s New, Just Me for tweeting it and Tim for the advance notice.  Special thanks to Arrow for his dogged determination to get this article out there.

Forner Dean of Osgoode Law School and Canadian Constitutional expert Peter Hogg outlines the Charter issues in a five page submission to Finance Canada.  That includes:

“In my opinion, the procedures mandate by the Model IGA are discriminatory in a way that would not withstand Charter scrutiny,” Hogg says in his letter. “These procedures effectively treat individuals differently, and adversely, based on an immutable personal characteristic, specifically citizenship. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter.”

The article goes on to outline other areas of the Charter which FATCA may contravene. These include Sec. 7 (protects “liberty”) and Sec. 8 (“unreasonable search and seizure”).
Canadians, read the article and rejoice!
If CBA or Finance Canada are following us, be prepared for that class action lawsuit if you or the government dare to try to violate our rights!
With more than a million Canadians adversely affected by this, the odds of a class-action suit coming together look pretty good.

 

 

Swiss Parliament to Vote on FATCA IGA in Summer Parliamentary Session, Proposed Swiss Federal Law to Apply FATCA

I would like to draw your attention to my latest article at IBS about the FATCA IGA with Switzerland, the proposed application law, the parliamentary consultation procedure now in progress, and my emails exchanged with the Swiss State Secretariat for International Financial Matters.
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Relinquished before 2004? Applying for CLN now? What are the IRS consequences?

There’s no question with renunciation (Immigration and Nationalities Act, s. 349(a)(5)).  You are relinquishing your citizenship and notifying the US government of it at the same time, and that’s the date your US citizenship ends.

But what if you relinquished your citizenship by a different method of INS, s. 349(a), such as taking citizenship in another country with the intent to relinquish your US citizenship (349(a)(1))?

The State Department is clear.  No matter when you notify the US govt of your relinquishment, once your CLN application is approved, your US citizenship ended on the date you actually relinquished it (that is the date your performed the relinquishing act, eg. naturalised as a citizen of another country — this date is indicated as your expatriation date on the the CLN.)

The IRS, however, according to s. 877A(g)(4) of the US Tax Code, considers the date of your relinquishment for IRS purposes is not the date of your actual relinquishment but the date you notified the US government of it (your consulate meeting).  This was not the case prior to 2004, however [the relevant section was 7701(n) in 2004 and it was replaced by 877A in 2008].

So, what if you relinquished your US citizenship long ago, but only recently learned of US law and policy changes which make it important to be able to prove you are not a US citizen, and wish to obtain Certificate of Loss of Nationality (a document you probably never even heard of before)?  What if the current law regarding IRS and citizenship termination did not exist at the time you relinquished?  Logic  leads one to the conclusion that laws passed after a person ceases to be a citizen are irrelevant.  The IRS has never made a definitive statement on this issue, however their instructions for the 8854 (expatriation tax form) are only directed at people with expatriation dates “after June 3, 2004.”

Tax lawyers Michael J. Miller and Ellen Brody have just published an excellent article on this matter, Expats Live in Fear of the Malevolant Time Machine, in which they point out the legal, as well as common sense, absurdity of a retroactive application position.  It’s very clear reading with useful references to legislation and case law as well.