Monthly Archives: April 2013

Is there a connection between FATCA and the outsourcing of Canadian banks’ IT jobs?

Like most other Canadians, I was outraged to learn that the Royal Bank of Canada has been laying off IT workers and replacing them with temporary foreign workers, with the intention of outsourcing their IT functions overseas. I was ever more outraged to learn in today’s news that RBC is not unique among Canadian chartered banks in doing this; several other members of the Canadian Bankers Association also stand accused in the media of the same practice, by some laid-off and even current IT workers from several banks other than RBC (specifically, CIBC, TD, Scotiabank and BMO).

See www.cbc.ca/news/canada/story/2013/04/09/canada-bank-foreign-workers.html

Am I the only person who is wondering whether there is a connection between the outsourcing of the banks’ IT functions to less-expensive overseas contract workers, and the indications we hear of the banks’ preparations to comply with FATCA (which will entail some extensive and expensive IT systems work in these banks)?  Outsourcing all that IT work could help reduce the costs to the banks of rolling over and complying with IRS invasion of our citizens’ financial accounts.

Is it the case that not only are the banks preparing to throw Section 15 of Canada’s Charter of Rights and Freedoms under the bus, as well as the account information on thousands upon thousands of Canadian citizens’ financial information to the tax agency of a foreign country, but they also are laying off highly-educated and highly-trained Canadian IT workers to boot in order to achieve this, even requiring those workers to train their under- or un-trained replacements in Canada before those workers go back to where they came from (and where Canadian privacy, banking and Charter rights don’t apply as those workers will be on foreign soil)?

And what will the outsourcing of IT functions overseas do to what remains of privacy, secrecy and security of Canadians’ financial information – of ALL Canadians, not only those of US origin?

I am writing today to my MP to ask these questions.  I urge you all to do likewise.  I would like some clear and believable answers.  (No, I am not writing to CBA. I want an answer I can believe, and I think that Question Period in the House of Commons, followed as appropriate by a federal government investigation to get answers, is the only way that’s going to happen.  CBA is not going to have any credibility with me on this one.  I believe what fellow Canadian workers are telling CBC, not the insipid denial by that RBC official.)

If anyone was looking for a compelling reason for non-US-origin Canadians to get really upset about FATCA and the banks, this could be a very good one, if it pans out.

They’re Watching!

Yikes!  (I am saying that far too often these days!)

US News is reporting some pretty scary stuff about IRS High Tech Tools To Track Your Digital Footprints

The Internal Revenue Service is collecting a lot more than taxes this year–it’s also acquiring a Spyhuge volume of personal information on taxpayers’ digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it’s never gone before.

IRS is no longer content to just have income, financial and banking information:

The IRS has brought in private industry experts to employ similar digital tracking–but with the added advantage of access to Social Security numbers, health records, credit card transactions and many other privileged forms of information that marketers don’t see.

Of course, they’re not shy to talk about it. In fact, they are bragging:

“Private industry would be envious if they knew what our models are,” boasted Dean Silverman, the agency’s high-tech top gun who heads a group recruited from the private sector to update the IRS.

The article does not say if their spy mission is restricted to US. Based on what we know, we have every reason to believe it is spreading around the world.

What the heck are they going to do with FATCA information?!?  Canada and other governments, Don’t Let US FATCA You!

 

 

 

 

 

 

 

 

ACA Blasts FATCA

Bahamas Weekly is reporting American Citizens Abroad Blasted FATCA at the Ways and Means Committee of U.S. Congress this week.

While focusing on the particular damage FATCA does to U.S. citizens living abroad, ACA pulls no punches in spelling out the broader harm this 2010 law (now pending implementation) threatens to inflict on the American economy as a whole, while failing in its stated purpose of curbing offshore tax evasion.

Plus, ACA spoke about international reactions:

“Foreign governments worldwide are furious that the U.S. Congress has the arrogance to exercise financial imperialism, to unilaterally impose its laws on the rest of the world, to require foreign financial institutions to spend tens of billions of dollars to comply with U.S. law and to require FFIs to break privacy laws in their own country in order to comply with FATCA, exclusively for the benefit of the United States with no reciprocity, let alone any prior negotiation.”

You Go ACA!  Will Congress listen?  If past response is any indication,  we shouldn’t count on it.

 

 

 

 

 

 

 

Unbelievable Hypocrisy: CRA Says it Can’t Recover Tax Penalties in Lichtenstein Due to OUR Privacy Laws

While watching the CTV news at 11, I couldn’t believe my ears when I heard the claim by CRA that taxes due from Canadians holding secret bank accounts in Lichtenstein prior to the signing of the DTA were uncollectable due to Canadian privacy laws. You can hear this for yourself

http://www.ctvnews.ca/video?playlistId=1.1223543

Kevin Newman interviewed a Lichtenstein official for this short clip; there will be a segment on W5 this Saturday at 7 pm. The whistleblower on the 100 Canadians with Lichtenstein accounts will be featured.

 

FATCA Is Far From A Done Deal

This is music to our ears.  At least, the headline is.

American Banker is reporting FATCA Is Far From A Done Deal.

Author Jon Matonis says:

It is either the reciprocity angle or the cascade effect of China’s reluctance that has the greatest potential to derail FATCA.

He also points out:

U.S. is one of the worst offenders globally when it comes to tax havens and “secrecy jurisdictions.”

One point makes me wonder if Mr. Matonis has the total picture:

With global transparency on the increase and more countries considering taxation on citizens’ worldwide income as a way to combat growing budget deficits, reciprocity with U.S. financial institutions starts to look appealing.

The concern about that statement is most countries do tax their residents on world-wide income.  They just don’t stalk their citizens living elsewhere for money.

Does this statement mean the author does not understand that or does it mean other countries are about to become copycats?  I can just see it when Russia, China, Cuba, Kenya and Saudi Arabia begin to demand reciprocity on people who immigrated to US and became citizens and now the US must report back to those countries on the financial affairs of American citizens and the children of those citizens who were born in U.S.

Mr. Matonis concludes:

Although experts in the FATCA preparation business tend to agree that moving forward with expensive FATCA compliance plans is the prudent and logical step to be taking now, a comprehensive and worldwide FATCA roll-out is far from a foregone conclusion. For those financial institutions and their shareholders offended by the overreaching legislation and lack of respect for mutual sovereignty, the cost savings alone may start to make FATCA’s non-compliance penalties look tolerable.

Of course, that is more more money into the coffers of International Robbery Society of United States of Arrogance..