An impressive ally in the FATCA fight has appeared in Georges Ugeux
The former Group Vice-President of New York Stock Exchange and present CEO of Galileo Global Advisors is a Belgian-born dual US citizen.
In his Should Lex Americana Be Universal: FATCA Turns Foreign Banks Into Tax Informants article for Columbia Law Review, Mr. Ugeux writes:
In my first course on International Private Law at the Catholic University of Louvain, we were taught that tax laws could not extend beyond the borders of the taxation authorities.
Yet, he points out:
The US applies Universal tax Law
He writes about technicalities of FATCA, but also reports from a personal perspective.
FATCA raises fundamental questions of privacy, but also raises questions about how it can be properly executed. Why, as a Belgian-born, dual-citizen, grandfather, am I no longer allowed to use or send money from my Belgian account for my granddaughter in Paris by using Internet banking? Why is my account subject to all kinds of FATCA restrictions while I am not required to disclose the account because its amount is below the IRS thresholds? Why can I not view the balance of my account on line?
Effectively, those accounts become useless, and it is equivalent to inciting US tax persons to close those accounts, pushing them to less regulated and transparent jurisdictions if they need capital abroad, whether it is for their business or their household…
Not surprisingly, one by one, banks refuse to open accounts for US residents or nationals. A friend of mine was refused the opening of a bank account last week in Tokyo…
This will affect Americans working outside of the United States who are not going to be able to use local banking facilities. It’s a strange version of a self imposed Yankees go home.
He suggests a delay in FATCA to ensure equity between countries.
The United States has to ask itself the question of whether its actions are legitimate and question its objectives and the ways it goes about achieving them. This is especially pertinent at a time when the United States seems to reserve a right to eavesdrop upon foreign nationals.
He asks:
Is US foreign policy using all its weaponry, including the FCPA and FATCA to impose a Lex Americana (i.e., American law regime) upon the rest of the world? Shouldn’t the US first look more closely at its own taxation system and corruption? International tax law is in urgent need of modernization with a focus on equity and fairness rather than threat and blackmail
I found the item by George Ugeux to be among the best things I read about FATCA, He really nailed in with his emphasis on the extra-territoriality of FATCA.
I’ts a shame that commentary like this generally doesn’t make it into the MSM, where FATCA= combating tax evasion almost always seems to be the centrepiece.
However, the real audience should be government officials who should show some backbone in dealing with the US on this issue.
i will be sending the article to Kevin Shoom at Finance, as negotiations with the US are still ongoing and representations apparently are still being made by the financial industry.
One other point- although there have been discussions here and at IBS about a constitutional challenge to a Canada-US FATCA IGA, I’d bet anything that either the banks or the Finance or both have already consulted legal experts on how to get around the Charter problems.
We’ll have quite a fight on our hands, but I’m sure there will be a lot of willing participants on “our” side the battle.
My only concern with sending this information to Shoom is that he’s a Finance bureaucrat and pretty-much has to do whatever Flaherty tells him to do.
I’ve sent links to the article, along with some of my usual comments about how a Canada-US FATCA IGA would be a violation of Charter, privacy, and sovereignty rights of Canadians, to Flaherty, Mulcair, Trudeau, May and my MP. For whatever good any of this will do; don’t forget our “accountable and transparent” Harper government is also conducting trans-Pacific trade-deal negotiations behind a brick wall of secrecy greater than that of notable other participants in those negotiations, such as New Zealand (see here http://www.cbc.ca/news/world/story/2013/06/20/f-vp-petrovich-tpp-secrecy.html).
I no longer take much comfort in the absence of any public announcements about an IGA; after all the various scandals and other proliferating evidence of the lack of accountability and transparency (not to mention basic morality) by various members of the current government and the PMO, I don’t trust Harper and Flaherty any further than I can spit. I put my faith in the opposition parties and in the hopes of “Heave Steve in 2015,” if 2015 isn’t too late.
I agree Hazy this is one of the best articles I have read about FATCA.
There was an pay wall-protected article in Tax Notes recently quoting Canadian lawyers who disagree with Peter Hogg about Charter issues and FATCA. I personally disagree with those lawyers, but I’m not a lawyer, so my opinion is simply a lay one.
It took a couple of weeks, but I now have copyright approval to post the article here one time after June 24. I will post it on Monday.
The article refers to Maple Sandbox, Isaac Brock Society and “anti-FATCA crusaders” It also quotes one of my comments at Nigel Green’s blog.
Stay tuned.
I’m interested to see the arguments offered in the article you are about to post.
Two years ago, I recall seeing a item authored by one or 2 lawyers, who maintained that the privacy concerns of FATCA in Canada could be overcome. This was just after a few articles in the Globe and Mail about FATCA and privacy issues were published.
Unfortunately, I can’t find the item anymore. At any rate, it will be useful to see another view of FATCA and the Charter even if we don’t agree with it.
@Hazy: The article is now in Huffington Post. It’s not New York Times, but it’s a start.
This probably isn’t a surprise because I understand Georges Ugeux is a regular contributor to Huff.
http://www.huffingtonpost.com/georges-ugeux/should-lex-americana-be-u_b_3475185.html
Georges Ugeux’ article made its way over to Huffington Post as well, and with a some good comments from Brockers.
http://www.huffingtonpost.com/georges-ugeux/should-lex-americana-be-u_b_3475185.html
Another good article that just came up in the Financial Times:
“UK wealth managers turn Americans away”
http://www.ft.com/intl/cms/s/0/dc2f7438-d4e8-11e2-9302-00144feab7de.html
Thanks for posting those AbusedExpat.
It was a great article. I was reading the comments and came across one that said: “Well, just renounce, folks.”
Having just come out of the Confessional, I really didn’t want to say anything to interfere with the state of grace I was in so I took a deep breath and wrote a short reply explaining why it wasn’t so simple. This morning I was pleasantly surprised to see this reply from the guy who made the original comment:
“It looks like what we are told is a simple thing is very complicated. Your reply has helped me understand what you are going through, hopefully your reply to me has opened other’s eyes.”
🙂
Victoria, you are among the “excellent communicators” in this. Thank you.