A post on Jack Townsend’s blog addresses the question of where Treasury gets it’s so-called “authority” to enter into FATCA IGAs.
The above tweet references an post by Professor Allison Christians which concludes:
… all IGA promises to alter the law in the future should be seen as what they are, unenforceable promises that are beyond Treasury’s control and so won’t be delivered.
Therefore honesty is still the best policy for Treasury. Instead of citing non-existent statutory authority that is easily refuted by simple reading, Treasury should own what it is doing outright. These are sole executive agreements, they lack statutory approval, they undertake very little on the part of the United States, but they are an effective way of pretending to be cooperative so that other countries can save face as they submit to the threat of economic sanctions that is FATCA. There isn’t really any reason why Treasury shouldn’t acknowledge this reality, since it is, strictly speaking, of Congress’ own making.
The FATCA IGAs are analogous to:
1. Agreeing to buy a piece of art that is represented to be “an original”, which turns out to be a forgery; and
2. Finding out that the seller of the forgery didn’t own it anyway – hard to legally sell what you don’t own.
Such is the moral compass of America today.