Pushback to #FATCA in France, Italy, Holland & Israel

 

I am reproducing a post by Jude Ryan from the Facebook group Accidental Americans” in the event some may not be aware that there is movement in countries outside Canada and the U.S. against FATCA.

I know there has been a lot of work done by the Australians and wish to mention it even though it was not included in the post I am reproducing.

A recap on ongoing domestic actions

To the extent we have have other nationalities present on this page (I know we do) please feel free to use this information to put pressure on your domestic politicians.

FRANCE

The lower House of Parliament, the Assemblee Nationale, has set up a fact finding mission to investigate the extraterritorial reach of US laws and in particular the invidious position French “Accidental Americans” find themselves in.
The mission statement of this commission is as follows: The commissions for foreign affairs and finances of the French Parliament (Assemblee Nationale) decided to form a joint fact finding mission regarding the extraterritoriality of certain US laws, which held its inaugural meeting on Wednesday 2 March 2016. The president of the mission is Mr Pierre Lelouche (Republican Party, Paris) and his rapporteur is Ms Karine Berger (Socialist Party, Hautes-Alpes). Several recent events have highlighted the propensity of the US courts and the US administration to purport to impose sanctions against foreign corporations and foreign individuals in respect of events occurring outside of US territory: these range from the record penalty one of France’s largest banks agreed to pay to the US administration (for a failure to comply with a US imposed embargo) to the acquisition of Alstom by General Electric against a backdrop of anti-corruption claims brought by the US authorities against senior managers of Alstom and including the US IRS pursuing French citizens living in France but born on US soil and therefore “Accidental Americans” for US income taxes. Based on the feedback of a wide array of experts, the fact finding mission will attempt to define the contours of US extraterritoriality, exhaustively identify all cases of extraterritorial application of US laws, assess their impact and in particular their impact on fair competition and the economic losses suffered by French companies as a result, and to study ways in which to counter such practices both at a national and European level. The mission hopes that its findings will lead to concrete implementation measures. The longstanding and deep ties that exist between France and the US in no way justify that the US should seek to assert legal imperium outside of its borders.

A hearing of French “Accidental Americans” was held on 8 June 2016 and at which issues raised by FATCA and the US practices of Citizenship Based Taxation, particularly as regards “Accidental Americans” were discussed. The mission questioned and heard testimony from five accidental Americans.The mission will issue its report late August / early September following which concrete legislative proposals will be issued to French Parliament.

The issue of Accidental Americans has now been brought up on several occasions in French parliamentary discussions and in particular by Messrs les deputes Mariani and Lefebvre on 2 separate occasions

1ère séance : Droit des étrangers (suite) (Article premier, adt 7 à article 10, adt 341) (Article 2, Thierry Mariani)

In addition the French Collective of Accidental Americans has organised meetings with the Director of the French Ministry for Foreign Affairs. The Director indicated that they will be speaking with the US Embassy in Paris about the issue of Accidental Americans who are also French citizens.

Last, but not least, the French Parliamentarian Seybah Dagoma wrote to the President Holland’s office drawing their attention to the issues faced by French citizens who are also Accidental Americans. In her letter deputee Dagoma denounced the unintended consequences of FATCA, the absurdity of Citizenship Based Taxation, the extraterritorial reach of US laws and and the living nightmare French Accidental Americans and their families are enduring.

ITALY

Massimiliano Fedriga, leader of the parliamentary Lega Nord group recently posed a question to the Italian government regarding the situation of Accidental Americans and in particular how the Italian government proposes to safeguard Italian citizens caught up in this mess (in addition to questions regarding infringement of Italian sovereignty, compliance costs and related matters).

Senator Comarloi for the Lega Nord is apprised of the situation and is also looking into this and Matteo Salvini (member of the Lega Nord and fellow MEP) has also been informed of the issues.

Question Time Camera del giorno 15/06/2016 (see 36th minute)

TUTELARE GLI “ACCIDENTAL AMERICANS”: FEDRIGA (LNA) INTERROGA GENTILONI E PADOAN

EUROPEAN UNION

As you are already aware we wrote to a number of MEPs and also the EU Commission. Despite several requests Commissioner Moscovici never responded to us. Instead we were informed by the Commission’s Department for Tax Affairs that the Commission seeing as the initial request to handle FATCA related matters on behalf of al member states was declined and that IGAs were negotiated bilaterally by each member state, accordingly our entreaties must be made at a member state level. If you would like copies of the correspondence exchanged please let me know.

HOLLAND

Government starting to look into the issues.

ISRAEL

Two actions are ongoing in Israel.

The first is an appeal to Israel’s supreme court, contesting the right of banks to transfer information pertaining to local accounts of dual citizens to the IRS. If this appeal is successful, the problems of accidentals will also be solved. See article below:

Why is the Republican Party coming to the Israeli High Court for help?

The second revolves around banking problems faced by the many small charities popular in Israels ultra orthodox communities. These charities rely on foreign donations. Requiring them to report on all donaters will effectively ruin them. This issue is being discussed by the finance committee in the Israeli parliament. This committee also promised to discuss the Accidental Americans issue:

Haredi Party Spearheading Effort to Protect Israeli Religious Charities from US Tax Authorities

CANADA

In Canada, the Alliance for the Defence of Canadian Sovereignty has initiated a lawsuit against the Government of Canada legislation that enables the FATCA IGA “agreement” between Canada and the United States. The Defendants in the lawsuit are Canada’s Attorney General and Revenue Minister. The Plaintiffs are two women from Ontario, Canada, both born in the United States, but who left the United States at an early age and have no meaningful ties with United States — yet they are deemed by the United States to be “tax citizens”. The Plaintiffs Claim that the legislation violates Canada’s Charter of Rights and Freedoms, Constitution, and it sovereignty as a nation. The trial is likely to take place in Canada Federal Court later in 2016.

Plans are also afoot to mount a legal challenge in the US courts to the US practice of Citizenship Based Taxation.

UNITED STATES

There is a well documented ongoing case, championed by Republican Overseas and Senator Rand Paul, to challenge the legality of FATCA in the US courts. We are in touch with the team working on this and are informed that an appeal by the plaintiffs will likely be brought soon.

Whilst the US Authorities have failed to offer any constructive solutions or open any meaningful dialogue with the overseas populations affected by FATCA, the issues raised by FATCA (particularly as regards Accidental Americans) have now been officially recognised. Indeed the existence of Accidental Americans is expressly referenced in President Obama’s 2016 and 2017 Green Books and the National Taxpayer Advocate’s 2015 Report to Congress.

Pressure needs to be brought on the US Government by all its partner countries to (i) officially recognise the shortcomings of FATCA and (ii) find constructive solutions.

General Explanations Fiscal Year 2016
General Explanations Fiscal Year 2017
TAS Annual Report to Congress 2015

 

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Optionally add an image (JPEG only)