Is Resistance to ‘FATCA’ Starting to Build?

Posted on November 21, 2012 at the Isaac Brock Society

Of particular significance is the following excerpt:

Trouble in ‘the True North Strong and Free’

 

One of the priority countries identified by Treasury as a must-have signatory on an IGA is Canada.  It would be a sharp setback for FATCA if Canada were to refuse to agree to an IGA or to allow extraterritorial enforcement of FATCA against Canadian institutions.  At the same time, given the high degree of overlap between the U.S. and Canadian economies (including the financial systems of the two countries) and the large number of U.S. citizens resident in Canada (many of them dual nationals), FATCA’s enforcement against Canada – whether with an IGA or without one – promises to be particularly expensive and invasive.

 

While Canadian Finance Minister Jim Flaherty has been blunt in expressing his negative opinion of FATCA, his Department of Finance recently asked for public comments on a possible IGA amid reports from both Ottawa and Washington that a deal would be finalized soon.   This news prompted circulation of an Appeal against FATCA and a U.S.-Canada IGA by The Isaac Brock Society (IBS), in cooperation with Repeal FATCA.  (The full text of the IBS Appeal follows this commentary, below).

 

As is clear from the comments on one site posting the IBS appeal, Canadians who support FATCA or an IGA are few and far between.  When the silence about FATCA is broken, and people can assess what is being imposed on them, FATCA comes up short.

 

The question is, will enough Canadian patriots get the facts before it’s too late – and will the Canadian media stop ignoring this assault on their country’s sovereignty and prosperity?

Trouble in Canada, Latest Commentaries in the U.S. and Abroad

James George Jatras
The following went out by email distribution list tonight, and thought I would post it here for all to see and link to for your own posts or tweets.

 

The major political asset FATCA (the “Foreign Account Tax Compliance Act”) has always had going for it is silence.   Enacted in the dark of night in 2010, the vast majority of those who would be negatively impacted by its implementation – which is just about everyone – have no idea FATCA even exists nor the costs this ill-considered law would inflict on them.  Continued silence about how destructive FATCA’s implementation would be has particular consequences for the U.S. Treasury Department’s efforts to cajole foreign governments into IGAs (“intergovernmental agreements”) requiring them to enforce FATCA on (or more properly, against) their own institutions, effectively as deputies of the IRS.

 

At this juncture, the initiative remains with Treasury, which on November 15 signed an IGA with Denmark.  (The only other IGA signed thus far is with the UK.)   Treasury is doing everything possible to sign as many IGAs as possible, as quickly as possible.  A snowballing sense of inevitability, they calculate, will itself impel additional countries to sign IGAs, thus avoiding the train wreck attempts of unilateral FATCA enforcement would trigger.

 

Trouble in ‘the True North Strong and Free’

 

One of the priority countries identified by Treasury as a must-have signatory on an IGA is Canada.  It would be a sharp setback for FATCA if Canada were to refuse to agree to an IGA or to allow extraterritorial enforcement of FATCA against Canadian institutions.  At the same time, given the high degree of overlap between the U.S. and Canadian economies (including the financial systems of the two countries) and the large number of U.S. citizens resident in Canada (many of them dual nationals), FATCA’s enforcement against Canada – whether with an IGA or without one – promises to be particularly expensive and invasive.

 

While Canadian Finance Minister Jim Flaherty has been blunt in expressing his negative opinion of FATCA, his Department of Finance recently asked for public comments on a possible IGA amid reports from both Ottawa and Washington that a deal would be finalized soon.   This news prompted circulation of an Appeal against FATCA and a U.S.-Canada IGA by The Isaac Brock Society (IBS), in cooperation with Repeal FATCA.  (The full text of the IBS Appeal follows this commentary, below).

 

As is clear from the comments on one site posting the IBS appeal, Canadians who support FATCA or an IGA are few and far between.  When the silence about FATCA is broken, and people can assess what is being imposed on them, FATCA comes up short.

 

The question is, will enough Canadian patriots get the facts before it’s too late – and will the Canadian media stop ignoring this assault on their country’s sovereignty and prosperity?

 

New Commentaries Breaking the Silence on FATCA

 

A spate of recent opinion pieces from diverse quarters also suggests that the silence that protects and sustains FATCA is breaking down, opening prospects for resisting its implementation and achieving its repeal.  (The following are excerpts, with full texts available at the sourcelinks, emphasis added in bold):

by [Andrew F. Quinlan, co-founder and president of the Center for Freedom and Prosperity, “Coerced Foreign Tax Compliance Is Killing American Jobs,” Forbes, Nov. 20]

 

“Without authorization from Congress, Treasury has embarked in setting a new course for international tax policy and relations. They are selling promises to deliver for foreign governments the same information FATCA demands from foreign institutions – meaning Treasury wants American banks to comply one day with the same onerous rules that Congress placed on FFIs, only instead of monitoring and reporting on citizens from one country our institutions would have to do so for all. . . . [G]overnments are doing themselves and their financial industries a disservice by contemplating entering into FATCA agreements with the U.S. Backlash against the law is growing, and Treasury is in a race against time to lock it into place before a repeal effort can gain steam.  

 

As Treasury continues to set new policy behind the backs of Congress, and further drag domestic banks into the FATCA crosshairs, opposition to the law will hopefully grow. But it is necessary for financial institutions, both foreign and domestic, to stand up against the law, and for Congress to step in, rein in the Treasury Department, and undo a mess that they are ultimately responsible for creating.  The worse thing industry can do is meekly accept FATCA’s dictates as so many consultants and compliance industry experts are advising. They are interested in feathering their nests, as one compliance company’s representative revealed when stating that, ‘Everyone’s trying to make money on FATCA.’ FFI’s and their governments should ignore self-serving advice and instead resist this arrogant U.S. foray into fiscal imperialism by demanding respect for their sovereign rights. U.S. lawmakers in turn should immediately repeal FATCA and replace it with a pro-growth agenda to simplify the tax code and lower rates. In so doing they can achieve the original FATCA goals of increasing both tax compliance and revenues, but in this way will do so by growing the economy instead of smothering it.”

 

Br [Nigel Green, CEO at the deVere Group, “US Treasury should be called to account on ‘economy-damaging’ FATCA,” http://www.nigel-green.com, Nov. 16]

 

The U.S government owes it to Americans to explain why it remains committed to implementing the highly controversial and potentially damaging Foreign Account Tax Compliance Act (FATCA).  . . . FATCA will dramatically reduce foreign investment in the US– at a time when the economy is teetering on a knife edge – due to the threat of the IRS withholding 30 per cent of their funds.  Investors will simply take their money overseas.  Indeed, David Schwartz, the executive director of the International Bankers’ Association of Florida recently observed that “several hundred million dollars have left Florida for foreign jurisdictions” between April 19th, when FATCA regulations were passed, and the end of July.

 

The potential revenues that FATCA could generate will be outweighed by huge foreign investment losses. In addition, FATCA will adversely affect US businesses operating in global markets because they have to have foreign bank accounts to facilitate payments from foreign clients and to pay local charges.  However, many foreign financial institutions are rejecting American firms as clients – even if they have worked with them for years – because becoming ‘FATCA compliant’ is too burdensome and far too expensive.FATCA does very little to actively target tax evaders and it has a potentially devastating effect on the American economy.  The U.S government owes it to Americans to give public, in-depth justifications on why it remains committed to this highly controversial piece of legislation.”

 

By [Simon Culhane, Chartered FCSI and CEO of the Chartered Institute for Securities & Investment (CISI), “US ‘a bully’ because of FATCA,” SPEAR’S, Nov. 20, 2012]

 

“The Americans have slipped in an extra territorial requirement that will impose significant costs on all asset and investment managers and banks. This US requirement is resulting in a double whammy. It is completely extra-territorial and seeks global compliance while imposing significant additional costs of compliance on virtually every financial organisation globally. It has resulted in many financial organisations, including private client and wealth managers, turning away clients simply because they have a link with the US. That strategy alone will not get a financial institution out of the net.  . . . No one is advocating tax evasion, but putting the costs on the UK is unfair and our Government should have the courage to say so.”

 

The above comments speak for themselves.  FATCA’s a bad deal for the United States, and it’s a bad deal for other countries as well.   As silence about FATCA continues to break, two things are essential: (1) foreign governments being enticed and pressured by Treasury need to say No! to signing an IGA; and (2) American and non-U.S. industry need to stop acting as enablers and support an active effort to spread the word about this damaging law and help get it repealed.

 

Jim Jatras

 

+1.202.375.1007

www.repealfatca.com

@RepealFATCA

RepealFATCA@gmail.com

 

The above is on-the-record and may be posted or published with attribution; inquiries welcome.

 

Full contacts at the end of this message.

 

The Isaac Brock Society Appeal text follows:

 

Call or email Stephen HarperJim Flaherty, and Your MP Today!

 

 

STOP an Impending Massive Handover of Canadian Sovereignty to the United States!

 

Tell the Government: Canada Must Say NO

to the United States on ‘FATCA’

Recently the Department of Finance invited comments on what was characterized as “an agreement to improve cross-border tax compliance through . . . the provisions enacted by the United States commonly known as the Foreign Account Tax Compliance Act (FATCA).”  This eleventh-hour invitation came as sources in both Ottawa and Washington announced that they were close to finalizing an intergovernmental agreement (IGA) that would, in effect, deputize the Canadian government to enforce this American law in Canada.

 

The Department’s invitation is to “persons whose interests are affected by the provisions of FATCA” but does not spell out that each and every Canadian citizen would suffer from FATCA and from an IGA to implement it:

 

Canadian citizens have an interest in preserving Canada’s sovereignty against US encroachment.  However it is disguised, FATCA is a unilateral U.S. initiative. The U.S. didn’t negotiate a global tax scheme with Canada and other countries but instead enacted an unprecedented extraterritorial law and demands that Canada comply and bear the costs.An IGA simply puts a Canadian glove on the hand enforcing American law.

 

Canadian taxpayers have an interest in a tax policy that benefits Canada’s needs, not America’s. Sold under the guise of “reciprocity” and “partnership,” an IGA in reality would be a costly one-way street imposed by the U.S.  Given the differences between the two countries’ tax systems, FATCA would accelerate a zero-sum game that siphons wealth from Canada and robs the Canadian treasury.

 

 

Canadian consumers have an interest in avoiding foreign schemes that impose costly non-economic regulations on Canadian firms (banks, insurance companies, pension funds, stock and investment companies) – who will then pass those costs on to consumers.  With or without an IGA, FATCA’s costs will be in the billions of dollars (for example, one major bank alone would pay an estimated $100 million in FATCA compliance!) These costs would be non-productive as regards the Canadian economy and a waste of human and material resources. Imposing these costs on Canadians supposedly is justified by the unproven hope that FATCA may trip up American “tax cheats,” even though FATCA does little specifically to catch such people.

 

 

Canadians as human beings have an interest in ensuring their rights are protected under sovereign Canadian law.  FATCA demands extraordinary disclosure of private information from Canadian residents deemed U.S. taxpayers by the IRS.  Such disclosure would violate Canadian laws such as the Personal Information Protection and Electronic Documents Act, whose application Canada would be forced to alter under an IGA.  Many of the people whose rights would be abrogated are Canadian dual citizens who would be denied protection of Canada’s laws to appease the U.S.  Once it’s established a foreign government can demand abridgment of such rights, even of Canadian citizens, where’s the limit?


 

So why is the Government considering an IGA with the United States? Because of the very real fear that Washington otherwise would unilaterally impose FATCA on Canada at ruinous cost, especially a 30% withholding penalty on Canadian firms’ U.S.-derived revenue.   Simply put, this is a threat of U.S. economic sanctions against Canada.


 

Finance Minister Flaherty and industry leaders publicly have talked a good fight on FATCA while in private negotiating Canada’s capitulation under an IGA.  


Canadians must not let that happen!  Instead:

 

 

Contact Prime Minister Harper and tell him No on FATCA, and No on an IGA with Washington!

 

Contact Minister Flaherty and tell him No on FATCA, and No on an IGA with Washington!

Contact your Senators and MPs and tell them No on FATCA, and No on an IGA with Washington!

 

 

Get the FATCA facts at the Isaac Brock Society and Repeal FATCA!

 

 

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 

 

James George Jatras, Esq.

 

Email:          james.jatras@squiresanders.com

Office:         +1 202 626 6248

Mobile:        +1 202 375 1007

Reception:   +1 202 626 6600

 

Profile: http://sspa.squiresanders.com/professionals/professionals_detail.aspx?attorney=6014

 

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2 thoughts on “Is Resistance to ‘FATCA’ Starting to Build?

  1. rmc

    I am wondering why we, the people, cannot start a world wide petition against FATCA. It is very clear that this is a very well crafted plan, created in secrecy, which when executed in the final hour will have a destructive impact on mankind and on the world. I only just heard about this and the more I am reading the more I am feeling that this is definitely one of the greatest crimes against humanity that has occurred in my lifetime. This is bordering on terrorism and is definitely attacking the rights of every human being on the planet. I have never done an on-line petition but I am sure it is doable and would fly around the world in a matter of a few days. If nothing else, the silence would be broken in a powerful way and could potentially empower individuals like me to have a voice. I don’t know who you are but if you think a petition would be a lead to a solution to this problem, please let me know. Many thanks

    Reply
    1. renounceuscitizenship Post author

      FATCA is an attempt to enforce the immorality of citizenship-based taxation, which as applied by the US is a crime against humanity. It is a vicious, unprincipled, unprovoked and unjustifiable attack on the rest of the world. The US is in its final days. The goal is to ensure that it does not sink the rest of the world as it sinks itself.

      Yes, by all means do an online petition. Every effort to raise awareness of this is important.

      Also, the rest of the world should just say NO.

      Reply

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