Do You Have Ideas For Legal Opinion?

As you know, with the funds you contributed, Stephen Kish and Lynne Swanson have retained constitutional lawyer Joe Arvay to provide a legal opinion on the proposed legislation for FATCA and the Charter of Rights and Freedoms.
Mr. Arvay has been gathering information from many sources for several months.  We are confident in his abilities to give us a professional legal opinion.
There have been some suggestions made here and at Sandbox that Mr. Arvay may find helpful.  At Brock, George suggested we establish a thread for people to provide their ideas.

If you make your suggestions by March 11, Lynne will coordinate and synthesize them and forward them to Mr. Arvay.

12 thoughts on “Do You Have Ideas For Legal Opinion?

  1. I am not a lawyer, but I have had some legal training.
    To me, it seems pretty cut and dried. Compliance with FATCA necessarily means that those who follow it would be violating the Charter.

  2. I believe that FATCA can be challenged under NAFTA, chapter 14 financial services.
    FATCA imposes reporting obligations on Canadian and Mexican financial obligations which places them at a competitive disadvantage in competing for and providing cross-border financing in the NAFTA area, and constitute a non-tariff barrier to trade in financial services. The lack of reciprocity for similar reporting requirements, makes the US a tax haven to Canadian and Mexican authorities.
    A similar challenge should be possible at the WTO under Sector 7, finances.
    The US successfully challenged the Belgian income tax practices. The information below is easily accessible from the WTO website.
    8. The Belgium income tax system is based on the principle of world-wide taxation of residents and on the source principle as far as taxation of non-residents
    The US argued that Belgium tax practices, placed US institutions at a competitive disadvantage

  3. @ Patricia……
    Interesting stuff on the FTA. The Canadian government and/or banks should be pursuing that in US courts.
    Makes me think of all those “professional Canadian nationalists” who years ago opposed the free trade agreement. You could certainly argue that FATCA is a sort of tariff wall imposed by Americans to favour their own financial institutions, which is, of course, contrary to the idea of free trade.

  4. I remember reading a bit of background history on the punitive treatment of Canadian mutual funds by the US – (see sources like this USCitizenAbroad on the IBS site re PFICs, and the RenounceUSCitizenship blog and USCitizenshipSolutions in which I got the impression that the punitive treatment (punishment in terms of excessively complex calculations, method, requirements, time consuming/costly reporting as well as the high confiscatory US taxation rate) was done at least in part (mostly?) deliberately in response to US banks lobbying and complaining about competition from those offering Canadian mutual funds – and to provide advantage to US investment products. I have no real knowledge of this area, but that would seem to be a potential trade barrier issue (WTO, NAFTA?). The US government agreed with the US banks that disadvantaging investment in Canadian mutual funds was desirable, and the tax rate and reporting (and penalty) regimes combined to erect a barrier to investment in non-US funds. I had the impression that it was a deliberate disadvantaging, which may have been done originally to prevent US RESIDENTS from investing outside the US, but combined with the absurdity of extraterritorial CBT – results in preventing us from usefully investing locally – where we actually reside. Which means that in Canada, not only can those affected Canadian citizens/legal tax residents not benefit from our local registered and other savings like Canadian mutual funds, but Canadian financial institutions are prevented from benefiting from offering them to a substantial portion of the Canadian population. Effectively defeating any related Canadian federal social policy goals.
    Also – under FATCA, because it is so broad, even NON-financial accounts and institutions are also included (ex. some kind of insurance, private pension plans etc). And thus disadvantaged? I don’t know enough about this to comment. Has there been anything that quantifies the impact on Canadian NON-financial accounts and NFFIs – or is that so broad, and the FATCA details so complex, and the final regulations so lengthy and so recent that no-one can weigh in on this yet?
    You might remember that originally the grant awarded to Arthur Cockfield by the Privacy Commissioner re FATCA included not only issues of privacy, but also specifically noted NAFTA (why NAFTA in a Privacy Commissioner grant and not a grant coming from some other trade or finance related federal ministry?). See “Organization: Queen’s University, Faculty of Law
    Location: Ontario
    Funding Amount: $10,000
    Project Title: The Privacy Implications of the Foreign Account Tax Compliance Act (FATCA)
    Project Leader: Arthur Cockfield
    Project Description: The project will review the privacy implications of the U.S. Foreign Account Tax Compliance Act (FATCA) in light of Canada’s Personal Information Protection and Electronic Documents Act. Specifically, the project will review implications on Canadian privacy rights and interests of any new agreement negotiated between Canada and the United States to implement FATCA. The project will also examine the interplay of FATCA with other Canadian laws that protect taxpayer privacy such as the Income Tax Act, the Canada-United States Tax Convention Act and the North American Free Trade Agreement (NAFTA). Finally, the project will review how Canadian banks are trying to comply with all relevant laws, and whether these banks are adopting new information technology systems to help them identify, sort, and transfer financial information to U.S. tax authorities.”
    We need to obtain a copy of Prof. Cockfield’s subsequent report to the Privacy Commissioner. Perhaps those planning to attend his talk at the CCLA event coming up in Toronto
    can ask whether/ where it has been published, and how the public who paid for it with taxpayer dollars can obtain access. His talk is described here;
    Panel 4: Privacy and Financial Information
    Financial information is often highly personal and is perceived as requiring strong privacy protection, yet it is also information much in demand by private sector agencies seeking to market financial services to governments, citizens and other corporations. This panel presents OPC-funded research focusing on the current privacy issues in the financial arena.
    Alexandre Plourde, Option Consommateurs, “New services provided by credit agencies.”
    Avner Levin, Ryerson University. “Fraud and privacy violation risks in the financial aggregation industry.”
    Arthur Cockfield, Queens University, “The Privacy Implications of the Foreign Account Tax Compliance Act (FATCA).”
    Moderator: Ali Miri, Department of Computer Science, Ryerson University
    I urge anyone who can attend to do so – it is FREE to register for the conference and attend.

  5. @All.
    If you have what you think is an important and valid legal point (particularly pertaining to the Charter of Rights and Freedoms as it applies to the IGA), I’d like to suggest that rather than post your point on this thread or any other public forum, instead do as IRSCompliant has requested over at Brock (for those who don’t want to go public) and email your point to the following address, with a subject header indicating this is a point you’d like passed on to Joe Arvay, the lawyer
    At this point, given we’re getting a legal opinion and heading into possible litigation, I think it would be a bad idea to show any good cards to the opposition by posting them publicly (the opposition who, I suspect, probably are monitoring this and several other websites).
    Just a thought.
    I’ve passed two legal arguments re the Charter to that email address already. I’m not posting them here.

  6. I think that one of the fundamental myths to be debunked is, the myth that non-resident U.S. persons have any representation in the U.S.. Which they don’t. The votes of non-residents are diluted when they are tossed in with the votes of actual residents. If the worldwide U.S. expat population were in an actual geographic area of the U. S. it would be as large as Virginia and New Jersey. Its population would be larger than that of Maryland and D.C. Canada’s own estimated population of 1 million resident U.S. persons would make Canada the 43 largest state.
    Based on that picture we can see how important it is that people to the political process that a people with common interests be in shared geography and congressional district. Geography is the basis for articulating and giving voice to political concerns. If you are not in a Congressional district then you don’t exist under the framework of the U.S. Constitution. And the powers of the US.constitutiont only operate within U.S. geography. So for the Canadian government to tell it’s U.S. resident persons that they must go to the U.S. government is an abdication of its political authority over it’s lawful residents.

  7. @expat:  We’re not talking about a US constitutional challenge.
    We are in the process of getting a legal opinion for a possible constitutional challenge under the Canadian Charter of Rights and Freedoms.

  8. @Blaze- I understand that. I just think that we may have to make this point first because Fin. Minister Flaherty has stated that U.S. persons need to look to the U.S. government for redress. The Canadian courts may ask about this also. The Charter challenge may very well have to prove that the Canadian court system is the only proper venue for U.S. persons resident in Canada.
    I could be wrong. I was just tossing in my thoughts. Which were given in light of Flaherty’s statements after signing the IGA.

  9. We need a Charter Challenge to prove that US law does not supersede Canadian law????????
    A judge would have to be on the take to apply that kind of logic.

  10. Blaze,
    In addition to sections 8 & 15 of the Charter, I think that FATCA also violates section 7:
    “Everyone has the right to life, liberty and security of the person and the right not be deprived thereof except in accordance with the principles of fundamental justice”
    I’m sure that all of us who are affected by FATCA feel that our security of person has been violated. I don’t see how the Harper government could argue that FATCA is in accordance with the principles of fundamental justice. Quite the opposite!
    I’m confident that Mr. Arvay has already considered this but please confirm it with him. Thanks.

  11. Thanks Mr. A. Like you, I’m sure Mr. Arvay has considered Section 7, but I will try to make the information I submit to him as complete and thorough as possible.
    Thanks again everyone for your suggestions. Tomorrow, I hunker down and begin drafting something.

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