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Friday, February 7, 2014

Axa Banque - U.S. Person Account Closures in France

It's official, Axa Banque sent letters out recently to their U.S. Person clients informing them that they are no longer welcome chez eux and giving them very little time to find alternatives.

This has hit the French news.  Le Figaro had this article by Anne de Guigné: Axa Banque ferme les comptes de ses clients américains.  Unfortunately, it's only available to subscribers so let's turn instead to another one that was published yesterday in Le Point:  Axa Banque ferme les comptes de ses clients américains en France !

In both articles the ejected clients of Axa Banque who are cited are, in fact, French citizens.  They are what we call "Accidental Americans" - they were born in the United States but have always considered themselves to be 100% French. To their surprise (and dismay) they are now learning through a private bank that they are also U.S. Citizens. (And is there not something deeply wrong with that? A private entity determining an individual's citizenship status?)

Here is Daniel's case as described in the Le Point article.  Daniel, a French citizen with a U.S. place of birth, has had an account with AXA for nearly 10 years:
"Peu importe que Daniel ait été élevé en France, qu'il n'utilise que son passeport français (il n'a jamais renouvelé le passeport américain). Il est né aux États-Unis pendant que son père (un Français) effectuait une partie de ses études. En vertu du droit du sol, il est donc légalement citoyen américain. Désarçonné, le Franco-Américain, qui n'a aucune attache outre-Atlantique, envisage alors de renoncer à cette pesante nationalité. Mais renseignement pris auprès de l'ambassade américaine, le délai est bien trop long (plusieurs mois)."
("No matter that Daniel was raised in France, that he only uses a French passport (he has never renewed his U.S. passport). He was born in the U.S. when his father (a Frenchman) studied there. Because of jus soli citizenship law [citizenship granted through place of birth] he is legally an American citizen. Flabbergasted, this Franco-American, who has no attachments on the other side of the Atlantic, thought to renounce this unwanted nationality. But after inquiring at the American embassy, the delay [to renounce] was too long (several months).")
Daniel's situation is actually even worse than Le Point describes.  Daniel is an American citizen which means that (according to American law) he should  have been filing U.S. tax returns and reporting his foreign" banks accounts to the American government (and by that I mean all his accounts in France).  Reading the article, I really doubt he is compliant with these requirements and that makes him, in the eyes of the United States of America, a "tax evader"  (fraudeur fiscal). 

His problems are just beginning:   he's been "outed" as a U.S. citizen, he is not compliant with U.S. tax law, and, in principle, if he wishes to renounce his U.S. citizenship, he is supposed  to file those back tax returns and bank account reports. 

This Frenchman does not only need a new bank, he needs a very good lawyer.

This is the direct collateral damage that FATCA causes.  However, the underlying issue, the real problem, is citizenship-based taxation.  There are serious consequences to being a "U.S. Person."  All FATCA does is reveal cases like this and demonstrates the complete idiocy of taxing individuals according to their nationality and not according to their place of residence (and the U.S. is the only country other than Eritrea that does this).  

In my humble opinion the U.S. consulate in Paris should give him his renunciation interview right now and waive the fee (yes, there is a fee to renounce U.S. citizenship).  And he should get his Certificate of Loss of Nationality within a few days after that.  As for the back tax returns, he should be absolved of having to file anything at all with the U.S. IRS or Treasury.  

After reading the Le Point article, I was inspired to write a comment in response as an American abroad living in France.  Here it is with my translation:
Il ne s'agit pas de "rapatrier" l'argent 
Je suis américaine et je vis en France depuis presque 20 ans. Mariée a un français, nous avons deux enfants Franco-Américains. Apres avoir quitté mon pays natal, j'ai gagné ma vie entièrement en France. Pas un centime de notre patrimoine familial vient des Etats-Unis et nous payons nos impôts ici EN FRANCE.  
Mais selon la loi américaine (l’imposition des particuliers basée sur la nationalité) je dois également déclarer cet argent au fisc américain. Dans certain cas il m'arrive de payer aussi les impôts américains sur mes investissements en France - l'argent que j'ai placé avec ce que j'ai gagné EN FRANCE.  
Résultats de cet exercice ? Nous avons moins d'argent pour réinvestir en France.  
J'ai du mal à voir comment tout ça est dans l'intérêt de la France. Et très honnêtement, j'ai honte face à ma famille française. C'est notre argent qui s'envole dans un pays étranger et nous recevons aucun bénéfice des Etats-Unis en retour.  
Donc, je pense à renoncer - pour ma famille et pour ce pays - la France - pour lequel j'ai beaucoup de reconnaissance et d'amour. 
(I'm an American and I've been living in France for nearly 20 years.  Married to a Frenchman we have two Franco-American children.  After having left my birth country, I earned my living entirely in France.  Not one cent of our family savings comes from the United States and we pay our taxes here IN FRANCE. 
But according to American law (taxation of individuals according to their nationality) I must also declare this money to the American IRS.  In some cases I have had to pay American taxes as well on my French investments - money that I invested with what I earned IN FRANCE. 
What is the result of this?  We have less money to reinvest in France. 
I have a hard time seeing how any of this is in the interests of France.  And honestly, I am ashamed to face my French family.  It's our money that is flying off to a foreign country and we receive no benefits from the United States in return. 
So, I am thinking about renouncing - for my family and for this country - France - for which I have a lot of gratitude and love.)


P. Moore said...

It is a terrible thing that banks in France, Switzerland and elsewhere are tossing their so called "US Person" clients (As defined by the US Treasury). It is certainly most unfair to these victims. I do however, understand why those financial institutions are doing it. They simply find it too expensive and perhaps too risky to service those clients.

These FIs exist solely for the purpose of making a profit and 'US Persons' are counterproductive in that regard.

Even though CBT is counterproductive for the US government and the US economy, it is clear that does not matter. Politics and re-election are far more important to the drunken fools in power.

Clearly there is a big difference in the ways that businesses profit and the ways that politicians profit.

Those who try to simply provide for themselves and family get caught in the cross-fire. Many more will renounce and the games are just beginning, I think.

Christophe said...

Your response brought me to tears.
I am ashamed that how my host country, the US, is treating their expats, and countries around the world. And I am infuriated to see that my home country is discriminating against a class of their own citizens.
Shame, shame, shame. I feel a sense of disgust for both countries. The extortion methods the US used to get what they want is bad, but to my mind, the discrimination by other countries against "US Persons", which might be their citizens is WORSE.

Blaze said...

Outrageous. I am sick at what is happening to US Treasury's "myths" throughout the world.

Just Me said...

and one of my little twitter followers, says of Daniel...

"No sympathy for this 'Daniel'. Aware he's American (had passport) but ignoring associated tax obligations!"

You have to be reminded now an then, that there are those even amongst the American Abroad community that think this way. Go figure.

Michael Putman said...

Well then it's really underway now, with all the foreign blowback and reaction.

Good luck on French nationality soon. Obviously for Americans who didn't grow up alienated in the first place, the idea of relinquishing USC is often pretty emotionally disturbing. So it's not for everyone. But you have my support for it if you decide to do it, even though you will for sure get hate mail denouncing you as a traitor from your more indoctrinated (ex)countrymen.

DL NELSON said...

I use my favourite example. You are born in MA. You move to NH and never set foot in MA again. You earn no money in MA However, every cent you earn until you die 1t 85 is taxed in both MA and NH. NH ok, you live there. In MA you don't.

Also you are no longer allowed to have a bank account in NH because you were born in MA and you aren't allowed to have a bank account in NH because you were born in MA. That's the situation. It is not tax avoidance.
The US is the only country that taxes on nationality not residence.
I believe that taxes are my dues to live in a civilized country. I don't want to pay them where I don't live because of an accident of birth.

DL NELSON said...

Can you contact me at to discuss constructive action.

Anonymous said...

We are very likely to be offered a green card in the next few months as a result of being selected as 'winners' in the current DV Lottery! We live in Europe. We have bank accounts and savings here. We also lived elsewhere and have bank accounts and assets there. We are generally happy to be paying taxes wherever we live. We are expats, we consider ourselves global citizens - something that should be celebrated by world leaders who advocate free trade agreements and global trade.

The CBT along with FBAR and FACTA laws disgust us!

This barbaric system of NSA dragnet style surveillance in conjunction with extortion of foreign Governments and their financial institutions in order to get detailed information of their so called 'US persons' are required to submit anyhow (via FBAR), reminds me of the Stasi methods of my native birthplace!

We have been following the developments closely over the last 6 months, especially in order to understand if there are any signs that the fascist CBT system and the method of enslaving US expats has any chance of being abolished!

The way this FACTA law is being presented inside of the USA by mainstream media and the actual comments by some readers clearly show that the propaganda seems to work: It is labeled as a 'anti-tax dodger' law and the public believes it just targets 'fat cats' living in the US who are storing mountains of cash in hidden offshore accounts. Otherwise, they completely lack an understanding of the issue.

So at the moment, the "Green Cards" feel like a "Carrot and Stick" scenario to us - we'd probably be able to make a good life in the USA (if we accept the fact that our then 'offshore' assets, which can be simple things like future pension benefits among others, might suffer under selfish IRS rules).

However, realizing that having already lived in a bunch of countries, doing so again at some stage in the future would (for the first time) put us in the category of 'US persons' who need to file taxes and FBARs even while living in a foreign jurisdiction ... truly doesn't fit with our world views - it simply doesn't "feel right" and in fact, it is a reflection of what the USA might have lost: Freedom and democracy!

Anonymous said...

I can't believe the cruelty of all this ! For some accidental or still Americans, renunciation might be a double-edged sword. If they inherit or have assets in the U.S., they may have to repatriate them to France - since American banks require a US mailing address under Bush's Patriot Act. And France would then probably take over half of it in taxes. Even if the person decides to renounce - I wouldn't blame him or her at all - there must be another solution - one in which it FATCA cannot be considered grounds for closing an account in France, and most of all, one which which gets rid of the beast altogether. i'm sorry the French and other governments involed don't just say MERDE (excuse me) to the U.S. - which needs foreigns investments and would also lose inthe process.

Jayne said...

Daniel should transfer his money to BNP, HSBC, Crédit Agricole, Socété Générale, LCL, Crédit du Nord, or Caisse d'Epargne - banks that have no problem handling US customers.

Anonymous said...

"Jayne said...
Daniel should transfer his money to BNP, HSBC, Crédit Agricole, Socété Générale, LCL, Crédit du Nord, or Caisse d'Epargne - banks that have no problem handling US customers.
February 8, 2014 at 8:20 PM"

--> Who guarantees that not all of those financial institutions are in fact going to follow all the other banks that are slowly reacting to the US threat and also terminate all accounts by now unwelcome 'US persons'?

--> But even if Daniel (representing all RBT victims) does find a bank willing to "take him" ... it doesn't change the fact that the IRS is soon getting every single bit of financial information about him, and that includes every single transaction. That is TRULY Stasi style!

Anonymous said...


I meant: "--> But even if Daniel (representing all CBT victims) does find ..."

(as in: CBT not RBT)

Victoria FERAUGE said...

I was so annoyed (and depressed) after I wrote this post that I took a break and tried to spend the better part of the past few days in the garden.

Thank you all for your comments.

I am of the very strong opinion that since FATCA is a reality in this country that The French and American government should come to some agreement about these "Accidentals" who are the collateral damage here. They should be allowed to renounce ASAP with no fees and no backfiling. I think that is a very reasonable and doable solution for people like Daniel and I am watching the French government reaction to this very closely.

Because, hey, what would be the point of becoming a French citizen if one is nonetheless going to be treated as the national of another country with the blessing of said government?

@anonymous, I've heard other cases of individual declining their Green Card. My husband had one at one point which was taken away from him on a trip back to the US. He is today a very happy and relieved man. :-)

@Jayne, Have to agree with anonymous. Daniel is screwed. Yes, he can find another bank but he will be tagged as a US Person the minute he tries to open an account and they will start sending his information to the US IRS. So, he has been caught and if he wishes to live a normal life in France, he's going to have to do something about the situation. Though your point is a good one: for the moment BNP and other French banks seem to be just fine with having US Persons.

AARO, by the way, is tracking this (there was a report in the latest AARO News & Views). If anyone is interested in knowing more or submitting stories send me a mail and I can put you in touch with the right person.

This is VERY important by the way since AARO is Washington-bound in March for Overseas Americans Week.(and, yes, I'm going. These stories are desperately needed as we try to convince US lawmakers that the impact of FATCA is NOT a "myth."

Yanknomore said...

I can't believe that these governments entering IGAs are not negotiating a streamlined process to allow their citizens to renounce and get out from under the FATCA bus without reprisal.

Betty said...

Franz-Olivier Giesbert, Director of Le Point, which published the Axa story, was born in Delaware. I wonder what he's doing about the US nationality problem...

Cliff said...

Just a thought . Does Daniel have an American social security number ? If not I do believe the United States has jurisdiction over him . If he has never done any business or derived any benefit from the U.S. there is no contract . No contract , no claim . Might be worth checking out.

Cliff said...

Sorry the last post should hare read I do not believe the U.S. has jurisdiction over him . Besides if they do call , Have them legally verify the claim . There's a good start . You might want to research this .

Tim said...

Are Democrats Abroad taking part in Overseas Americans Week in March? They seem to be implying they are. Or are they planning a separate visit?

Victoria FERAUGE said...

@Tim, that's a very good question. Where did you see that Democrats abroad will be there?

The best information I have right now is that it will be AARO and FAWCO and that's it.

Does anyone have other information?

Tim said...

Democrats Abroad is claiming to be organizing a big trip to DC in March to "discuss" FATCA. However, from what you are saying it appears to be separate from AARO and FAWCO trip.

Tim said...

Anonymous said...

Discrimination based on nationality is illegal in France...

The Penal Code states:
« La discrimination définie aux articles 225-1 et 225-1-1*, commise à l'égard d'une personne physique ou morale, est punie de trois ans d'emprisonnement et de 45 000 Euros d'amende lorsqu'elle consiste :
1° A refuser la fourniture d'un bien ou d'un service ; […] »

*NB : « Constitue une discrimination toute distinction opérée entre les personnes physiques à raison de leur origine […] »

I wonder why the legality of AXA Banque's decision hasn't been mentioned in the media?

Anonymous said...

> since American banks require a US mailing address under Bush's Patriot Act.

They don't, and the State Department has issued a letter to this effect that people can show the banks. The banks have to show due diligence. You may find that many will not allow a person abroad to open an account on line, but will do so in person.

> And France would then probably take over half of it in taxes.

Well, that seems to be wanting the cake and eating it, too. The US inheritance tax is on estates, the French tax is on the recipient.

echoing said...

you need to check this out for a peek on how FATCA is going to be implemented in France

Victoria FERAUGE said...

@Echoing, That is an OUTSTANDING link. Thank you and I will do a post on it with translations. Lot of interesting stuff there. Thank you so much.

Anonymous said...

While I vehemently disagree with FATCA it should rarely cause double taxation because France has higher taxes than the US and income is not double-taxed unless one is extremely well paid. You need to file US taxes but it is extremely unlikely you will be required to pay anything, though the paperwork is still a hassle.

Some things like inheritance may theoretically cause a tax event but about the first $5 million is exempt in the US (plus, honestly, anybody who dies and leaves that much money can afford to pay some tax on it).

More to the point FATCA is ridiculous because it will not affect genuine tax evaders: they will simply continue to evade their taxes. No tax evader would ever try to shelter their money in France! If anything they would move their French money to the US, which has both lower taxes and many loopholes.

American's routinely make fun of France's high taxes. Nobody in the US seriously believes that anybody will run to France, of all places, to avoid taxes.

lucieaubrac said...

This blog along with Isaacbrocksociety are gold mines. Thank-you. I will be using the info from anonymous post February 17, 2014.
Here is the text of the letter I will be sending to my elected and appointed representatives.

That the French government and banks break French laws to apply laws made in USA is not acceptable.

Mme. le sénateur et M. le Député,
Comment se fait-il que le gouvernement français applique les lois américaines sur le sol français? Le gouvernement français oblige les banques français à leur donner des informations personnelles et confidentielles d’une “certaine catégorie des personnes françaises ou vivant en France légalement”.

Ensuite le gouvernement français donne ces informations au gouvernement américaine.

Axa Banque ferme les comptes de ses clients américains en France ! - Le Point

Cette activité est contre des lois françaises!
Il est incompréhensible et intolérable que le gouvernement français réagisse ainsi.

Ou est ce que nous sommes retourné au practiques de la Deuxième Guerre Mondiale quand le gouvernement français appliquait les lois d’un gouvernement étranger sur le sol français?
Et qu’une certaine catégorie des personnes françaises ou vivant en France était considérés moins bien, moins importante et donc n’avaient pas exactement les même droits et les même protections que la majorité des citoyens.

Je répète qu’il est incompréhensible et intolérable que le gouvernement français réagisse ainsi.

J’ai honte de ce que notre gouvernement est en train de faire. Si vous plaît utilisez le pouvoir investi en vous pour que ces pratiques illégales cessent.

Anonymous said...

Don't know where to post this, but thought you might be too busy to have seen this story about a man injured in the terror attacks in Paris, who couldn't cash his compensation funds because of FATCA:

Chris Dalton, victim of Nov. 13 terrorist attack was denied a bank account in France due to FATCA;
‘Chris Dalton, victime du 13 novembre : « Je passe mes journées à régler des tracasseries administratives’
LE MONDE | 25.02.2016 à 08h48 • Mis à jour le 26.02.2016 à 15h54 | Par Patricia Jolly

Google translate version:
..”……At the hospital, Chris left in mid-December with crutches and where he had to redo his bandages every other day, the reception staff, overwhelmed, suddenly became less friendly. “One weekend, I was even denied care, and the social worker who handles my file had to intervene. “He had an apartment in Paris: 1700 Euros for a studio in the neighborhood of the Gare du Nord.

The provision of the compensation fund for victims of terrorism, supposed to cover such costs, did not arrive until later. “We had a RIB says Chris, and French bank branches would not open an account for me because of the Foreign Account Tax Compliance Act [Act to control offshore accounts], which complicates their life. “He eventually found an arrangement with a US bank. He must be content for now a temporary passport because the police officer who took his deposition to the hospital lost his.”…..

Victoria FERAUGE said...

@Anonymous, Oh yes, I did see it and am planning a post. Quite the story, wasn't it? I was amazed that his story didn't make the papers sooner....

Unknown said...
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