New Flophouse Address:

You will find all the posts, comments, and reading lists (old and some new ones I just published) here:

Saturday, March 31, 2012

Flophouse Favorite: Ask the Pilot

Arun over at Arun with a View slipped this link into one of his posts the other day.

Ask the Pilot is a featured column on Salon written by Patrick Smith, an airline pilot.  It's everything you ever wanted to know about air travel, airports and airlines.  Here are some of his classic posts:
  • When I tried to seduce a girl and almost had a mid-air collision
  • The world’s worst airport (No, it's not Charles de Gaulle :-)
  • Smoke in the cockpit: A true story of danger and hilarity, part 1
  • Smoke in the cockpit: A true story of danger and hilarity, part 2
  • Everything you were afraid to know about wake turbulence
  • How to travel in the world's most "dangerous" place to fly
Really fine writing.  Funny too.  If you travel a lot, this is a must read.

Friday, March 30, 2012

Immigration Enforcement and Human Rights in the U.S.

Amnesty International has published a scathing report concerning efforts to control immigration to the U.S.

It's called Hostile Terrain:  Human Rights Violations in Immigration Enforcement in the American Southwest and it documents some of the worst horrors of a post-911 America.

While we can and should have debates about immigration policy (a debate that is going on all over the world in many countries) the actions of governments must be conducted within international laws that protect human rights.   The right to protect one's territory must be balanced by a respect for human dignity.  Overstaying a visa or entering a country illegally can never be used as a justification for abusing people or depriving them of their lives, though the immigration rhetoric in some countries comes very close to saying just that.  In 2011 the Kansas state representative Virgil Peck declared:   "Looks like to me, if shooting those immigrant feral hogs works, maybe we have found a [solution] to our illegal immigration problem."

That, kind sir, would be a violation of several international conventions concerning migrants that the U.S. has, in fact, signed and sworn to uphold.  Amesty International points out that:
The USA has ratified, and therefore has an obligation to adhere to, many of the key human rights treaties that guarantee these fundamental rights, including the International Covenant on Civil and Political Rights (ICCPR);  the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD); and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment.

The USA has signed the International Covenant on Economic, Social and Cultural Rights; the Convention on the Rights of the Child; and the Convention on the Elimination of All Forms of Discrimination Against Women. As a signatory to these treaties, it has an obligation to refrain from actions that would defeat their object and purpose.  International law also obliges the USA to protect and fulfill human rights and to safeguard individuals from infringement of these rights by third parties, the principle of “due diligence.”This includes an obligation to prevent human rights violations, investigate and punish them when they occur, and provide compensation and support services for victims.
Failure to respect these conventions puts the United States government firmly in the camp of the "law breakers."  If only a mere fraction of what Amnesty International is reporting is true, it makes a mockery of the idea that the U.S. is a bastion of freedom and a country respectful of laws.

For those who would prefer to ignore this or who think they are safe because they aren't of Mexican origin or "illegal,"  I'd like to respectfully point out that all efforts against immigrants sooner or later trap citizens and documented immigrants as well.  It can be as simple as encountering major inconvenience trying to go about their daily lives (having to prove citizenship, produce papers, being hassled because of an accent by law enforcement) or it can be as bad as being detained and abused on the suspicion that one might just be in an "irregular situation."  Amnesty cites 82 cases where U.S. citizens were incarcerated until they could clear up their status.  

Read the report.  It's illuminating.

And, if you're interested in U.S. immigration matters, I highly recommend the site which has a daily round-up of excellent articles and links and a very good blog.  Also see this blog post by Michael Kolken for a very strong opinion about U.S. immigration policy and the upcoming U.S. election.

Thursday, March 29, 2012

Letting Go of the Language Wars

I had an interesting encounter today.  I met an American woman who is here with her husband on a short-term assignment and she told a very typical story with an atypical ending.  She lives outside of Paris in a rural area and when she arrived here she was very enthusiastic about learning the language and integrating  into French culture.   She took lessons for a few months but family matters and other things made it hard to keep up.  Very recently she made a decision that I think was very brave - she decided to stop the lessons and just get by on what she is able to pick from the people she meets.  Why do I think this was a good and brave decision?  Because, in spite of a good enthusiastic start, the lessons had turned into a source of stress and guilt.  Instead of just enjoying being in France, she was starting to beat herself up for not making faster progress.  It takes time to learn a language and not only did she not have that time but, given the short period she and her husband will be here, it's not realistic to think that she will achieve enough fluency to feel successful before they are off to another country and another assignment. So she lowered her expectations and will try to learn as much as she can in the time that she has here.  Wow.  Takes a lot of maturity, self-knowledge and lack of ego to come to that kind of conclusion.

Learning another language isn't easy but, all too often, we are unreasonably harsh with ourselves.  Almost all of my French friends have said to me, at one time or another, "Je suis nul en anglais."  A common topic around the table when I meet up with expats from all over the world is the shame and the frustration they feel at not being able to communicate fluently in the local language.  Some give up.  Some soldier on.  And the few that truly have become fluent are genuinely admired as people who have suffered and earned the moral high ground .

What I find striking, however, is how much moral judgement we place on ourselves and others when it comes to learning (or not learning) a language.  This activity seems to be loaded with all kinds of moral baggage and I think that's a shame.  I don't think it has ever helped anyone be successful and I strongly suspect it fuels failure. Furthermore, I don't sense a lot of love for language itself in this war that goes on inside people's heads.  Do my French friends who have struggled with English classes in high school and university love English?  Not necessarily, for some it's more like penance and many are ecstatic when they pass their Bac and never have to crack open another book or be forced to formulate a grammatically correct phrase under the critical eye of the prof.   Do my expats friends here love French?  Same answer only they are adults so the agony is usually self inflicted.

I think we need to put this topic in perspective.  It takes hard work but learning a language should never  be an exercise in suffering and self-loathing.  There are very good reasons to learn another language but "because other people think I should," isn't one of them.  Just for fun, here are a few ideas that might help us all relax:

Fluency is Relative:  What exactly does "fluent" mean?  Does it mean, "able to hold a conversation in that language" or does it mean "read, writes, and speaks like a native speaker?"   Think about all the grey space between those two extremes.  It's entirely possible that some foreigners can speak French quite well and have a hard time writing.  Others might be able to read and write very well but can't order a baguette in a bakery.  Some people can read, write and speak but (like me) retain their accents.  Henry Kissinger was a great example of this.  Even the Frenchlings who are bi-lingual have strengths and weaknesses in the other language (English).

Even Native Speakers Make Mistakes:  So how high do we set the standard for fluency?  If we set it too high, I know a lot of native French or English speakers who would fail it.  I had a French engineer at one company who was a brilliant IT guy from a good French engineering school who used to send me emails and reports that were filled with French spelling and grammatical errors.  At first I assumed he was lazy (not one of my better moments as a manager) but I finally figured out that he really didn't have a very high level in French despite being born and raised here.  Check any Internet site (English or French) and read the comments section and you will find varying degrees of mastery of the language.  Walk the streets and listen to people in casual conversation.  It's not an either/or, fluent/not fluent,  situation - it's a continuum.  Very very rarely are people perfect.  Yes, even people who have spent their formative years studying the language make mistakes.  No reason for you to think that you have to meet some unattainable standard of perfection before you write something or open your mouth.

It's Not a Test of Intelligence:  I know a lot of really brilliant people who are mono-lingual.  My French mother-in-law, for example, is one the sharpest women I know and she's managed just fine with just French for 80 years.  To my knowledge there is no evidence that says that bi-lingual people are smarter (or get fewer cavities) just because they have a second language.  If you find it rough going  in the beginning or still speak with an accent after 20 years that doesn't say anything about your IQ.  Some people learn to play violin or ride a bike faster then others too but we seldom question the native intelligence of the others who take a little longer to master these things.   Struggling is not a sign that you are stupid, so stop beating yourself up.

It May Not Even Be Necessary:  Now isn't that a radical thought?  Wherever you go it might be perfectly OK to muddle along in a language you already know or just learn enough to get by (like the American women I mentioned above).  Only you can make that decision but be honest about it.  If you really want to work for a French company, for example, it's probably required.  But you don't have to work for a French company if you don't want to.  It will be harder to find a job in English or Japanese, for example, but it's not impossible.  It is entirely possible to live in another country (and live quite well) without ever becoming fluent in that language.  My favorite example is a Frenchwoman I knew in my youth who lived over 30 years in the U.S. whose English was nearly incomprehensible.  Was this a problem?  Not at all.  She worked as a French teacher at a local private school and had enough English to get by.  I had a Norwegian cousin in Seattle and he too after over 30 years in the U.S. had very halting English (he worked on a fishing boat with other Norwegians).  Similar story with a French executive I knew in Tokyo who lived 10 years in Japan and his Japanese was nearly nonexistent.

I am not giving those above examples as models to follow.  All I'm saying is that these people got by just fine.  They learned enough to be able to do the things they wanted to do.  They led good lives and were sincerely missed when they passed on or went home.   A missed opportunity?  Perhaps.  But, if you are going to make a moral argument that they should have done differently then I would ask that you explain why. What social contract do you think they violated and what harm do you think they caused?

Good Reasons to Learn Another Language;  Personally, I think the only good reason is "because you want to."  It's a way of opening up to the world.  You'll be able to communicate with all the other speakers of that language who may number in the millions.  If you want to work internationally, you'll have more opportunities.  You'll be able to watch movies, see plays or read great literature in the original language and not have to suffer through sub-titles and bad translations.  If you are an admirer of another culture, you'll have access to all the cultural goodies that may not be translated at all.

But the very best reason, in my view, to learn another language is sheer love of the language itself.  Because it's beautiful.  It's a lot like learning to play the violin - you may screech for the first couple of years but, one day, you will draw the bow across a string and the resulting note will be pure magic.

Wednesday, March 28, 2012

Some Random Wednesday Thoughts

The sun has been shining bright here in Versailles and in between looking for a job, doing research and writing I often go out and sit on my patio with my coffee and just let my thoughts wander.  Based on some things I've been reading lately I came up with some ideas that I've been toying with and trying on for size.  I'm sure that they are not original but I thought it would be fun to post them:

Everyone is just fine the way they are:  As I read, once again, the comments on various Internet sites or peruse my mail, the message I hear is that, "Hell is other people." It's pretty consistent and is applied to both personal and political problems. It is the source of most complaints I've heard against immigrants and it's the number one angst of migrants in their host countries.  "If those people would simply behave better, we would treat them better."  Or "If those people would stop treating us like second-class citizens, perhaps we might consider integrating."  Or "If they weren't so snobbish and cold, we might learn English/French/German/Chinese faster."  Or even, "France would be perfect if it weren't for the French."

It's an endless cycle of resentment which is doomed to go absolutely nowhere because it starts from the presumption that there is something wrong with "those people" that needs to be fixed in order for others to be happy.  Think about that for a moment - resolution of a problem is predicated on one side realizing that they are deficient and humbly submitting to the medicine prescribed by someone else.

So why don't we turn this thing on its head and stop perceiving people as problems to be solved, projects for improvement, or things to be made over in our image?  What if we just started from the premise that everyone is just fine the way they are?  That there is nothing to be fixed or changed in the person standing before us.  What if we just said instead:  No one is too fat/too thin, too rich/too poor, too educated or uneducated, too polite or too rude, too American/Algerian/English/French.  Nobody needs to lose weight, take care of the pimple on the nose, change his hair color, change his politics, get into therapy, divorce his wife, stop/start talking to his parents, learn a third language, go back to school or any one of a million prescriptions that each and every one of us write for someone in our lives every day, every hour. every minute.  What if we just relaxed and gave each other a break?  After all, my friends, the sun is shining and surely we have better things to do.

Control is impossible:  The most important lesson I ever learned as a manager was this:   In spite of my job title, the pretty badge that said "Executive," the first class seat on the Air France flight and the club they handed me to decide peoples' salaries and career paths,  I ultimately had no power to make my staff do what I wanted.  I had the illusion of power:  I could cajole, threaten, manipulate and reward but, at the end of the day, the only way they were going to do what I said was if they decided to do it. That sure took all the air out of my balloon.   I was even more deflated when I realized that this was not only true at work, it was and remains true of all the people in my life:  spouse. children, mother-in-law, the fonctionnaire at the social security office, the bus driver and my temporary housekeeper.  No, I do not possess the universal remote which allows me to press a button and turn a disagreeable, uncooperative human being into a pleasant helpful person who gives me exactly what I want when I want it.  The realization that nobody has to do what I say or give me what I want was something I initially found horrifying but I am convinced that it is fundamentally true.

Furthermore this is not only true for me, it is universally true.  Governments can pass laws, societies can establish norms, religions and ethicists can propose rules and commandments but the reality is that no one has to obey any of it. Of course there are consequences, but they don't ever stop a very determined individual.   For all sorts of reasons people submit to discomfort, penalties, jail, or even risk death as they exercise their free will.  Migrants do it all the time - it is deadly dangerous to cross a border illegally or overstay a visa in many places but they still do it.  Or, for an example close to home, every person I've ever seen at the Invalides RER station brazenly smoking under the No Smoking signs while ignoring the shrill announcements (in multiple languages no less) that smoking is absolutely forbidden on the platform.

The above is not an argument for anarchy - it is an argument for humility.  We spend an enormous amount of time and money, and we generate incredible stress for ourselves, trying to control other people and what they do.  It is so frustrating to watch people do (from our point of view) terrible things to themselves or to us and our reaction tends to be to pursue ever more draconian methods of bending them to our will.  It very rarely works.  Whether we rage at a disobedient adolescent or shake our fists at those people "taking our jobs" at the end of the day we are not the boss of them.

Try not to get too comfortable:  I also call this, "Choosing to go over the cliff."   Basically, we are cowards.  We all have our comfort zones and we will do darn near anything to stay in them.  We very rarely put ourselves in situations that frighten or de-stabilize us.  That's what makes migrants so interesting since casting yourself upon a distant shore is probably the most radical way to pull the rug out from under yourself.   Everything changes.  It challenges your assumptions in life-changing ways. The first few years are wild - terror and wonder all wrapped up in one glorious ride.  But even migrants eventually settle in and become residents.  They find their center and stay in it.  That is what happened to me.  What was new and strange twenty years ago is now my "normal." Metro, boulot, dodo. Point.

I was very proud of this accomplishment.  I integrated and believed that this made me a very good girl indeed.  These days I'm not so sure.  Did I really integrate or did I learn enough to get along and arrange my life in such a way that I would rarely encounter any sharp edges?  More of the latter then the former I must admit after taking a cold hard look at it.  These days, in spite of all my efforts, the sharp edges are coming fast and furious which are pushing me to re-evaluate.  Perhaps there is a better way and it just might look something like this:

What if, instead of staying in the safe zone where all is comforting and familiar, we moved toward the boundaries of our experience to a place that is not comfortable.  Frontiers are, after all, where the interesting stuff happens.  Move toward the unknown.  Take the risk once again of having assumptions challenged and life turned upside down.  Another migration is not necessary to start this process - there are plenty of opportunities right here, right now.  It could be as simple as seeking out someone whose political beliefs you abhor and asking him to explain why he holds this belief while keeping your mouth firmly shut.  Another might be finding a practitioner of a religion that you have a strong bias against and going to their services to find out what they really are all about.  Or here's one I like:  try doing a familiar or habitual thing as if it were the very first time.  Drop all your assumptions that this or that will happen based on previous experience.  Let go of the, "Last time they were rude and asked for a mountain of pay slips so this time I need to bring my pay slips and steel myself against the inevitable rudeness."  Instead, put yourself in a position to be surprised. Accept that anything might happen.  

The above things take courage because we are risking something we hold very dear, our pride.  We could be insulted, embarrassed, or treated like a 5-year old.  We might find that certain political or social views literally make our stomachs hurt.  Or, we just might find out that people are better then we think, that our political enemies actually have a few good ideas, that there is a lot more to a religion then we ever dreamed.  Sometimes I think we are more fearful of a positive outcome when we take these kinds of risks.  It can be devastating to realize that when we ran the film in our heads, we heavily edited the story line to keep ourselves safe.  Perhaps, one day, we might even be able to move beyond our investment in right and wrong, in for and against and in friend and foe.  As a friend of mine told me recently, "Do you want to be right or do you want to be happy?"  

Still sunny and warm here in Versailles.  Have a great day, everyone.

Tuesday, March 27, 2012

The Diaspora Tax War of 2012: Stakeholder Analysis Part II

Yesterday we looked at a few of the people/entities that stand to gain from citizenship-based taxation/FATCA laws.  Today let's talk about the people who stand to lose and how they are reacting to increased worldwide taxation enforcement efforts by the IRS/FATCA laws.

U.S. Immigrants:  Most immigrants who came to the U.S. came to follow the "American Dream."  These days the dream is not so much about "Freedom" (there are a lot of countries in the world where arguably you can be just as free, if not freer then in the U.S.)  These days it's mostly about opportunity.  The U.S. has a huge internal market and up until recently did a good job of generating jobs for natives and immigrants alike.  Contrary to what most Americans think, the U.S. has a relatively low naturalization rate (37%) which means that well over half the immigrants to the U.S. never become U.S. citizens.  They come, make their money, and they go home with their U.S. born children.

With that in mind, citizenship-based taxation is absolutely contrary to their interests.  It is not so much immigrants who come from poor countries who have few or no assets prior to coming to the U.S. or the young who are just starting their careers.  It's mostly about that much sought after Highly-Qualified immigrant population who have existing assets at home and who have high income potential.  From what I have read, Indians seem to be a particular target as are Europeans and Chinese.

When these immigrants came to the U.S. most had the assumption that the only taxes they had to pay were on U.S. income (money earned in the U.S.)  Why did they assume this?  Well, because the vast majority of countries in the world don't tax their citizens abroad and certainly do not tax immigrants in that manner.  France doesn't.  Canada doesn't.  Singapore doesn't.  Singapore even advertises this fact in their marketing literature for highly-qualified immigrants by highlighting the fact that their tax system is purely territorial.  In fact, I can't think of a single choice destination in the world that has this kind of taxation system.

The other reason they assumed the U.S. had a territorial tax system is the fact that when these people were given their U.S. Visas or Green Cards no one informed them that the U.S. does it differently.  Many had bank accounts or property in their home countries prior to coming to the U.S. or they inherited money while living in the U.S. and it just never occurred to them that once they became "U.S. persons" that they would be required to report these things to the IRS.

That, in a nutshell, is what happened but today they are paying dearly for their ignorance.  Just to remind everyone, the penalty for not filing an FBAR on those non-US accounts is 10,000 USD per year and I think the IRS can go back 5 or 6 years which means, at minimum, a 50,000 USD fine if they are caught.  This story was recently posted on Phil Hodgen's blog and it is quite a tale.  Another story is here at Isaac Brock.

Public reaction by U.S. immigrants has been nonexistent.  Some are still in a state of disbelief.  Others are simply too scared to say anything publicly lest they come to the attention of the IRS - you see a lot of anonymous posts from these people on various sites.  Their position is really an awful one.  Since they are not citizens, they can't vote or call up their Congressman to ask for help.   I personally think that the anti-immigrant rhetoric in the U.S. is also a factor.  Just how safe would you feel if you were an immigrant in the U.S. and you just found out that according to the IRS, you are "non-compliant" with U.S. tax and reporting requirements - in other words, you broke the law.  Coming forward can actually mean that these immigrants can be wiped of their entire life savings - every dime they made pursuing the "American Dream."  Some are quietly leaving the U.S.  Some are waiting to see if relief will be offered.   Some are desperately trying to get compliant.  And some are passing the word to friends and family in the home countries.  It will be interesting to see what the impact will be on U.S. immigration.  There are reports (unconfirmed) that some potential immigrants have started turning down Green Cards.

Americans/Green Card Holders Abroad:  A very diverse group.  This includes Americans citizens married to foreign nationals, "Accidental Americans" (people who acquired U.S. citizenship by jus soli or jus sanguinis but who don't reside there), businessmen and women,  dual nationals (people with U.S. and some other citizenship), retirees and so on. The U.S. emigrants were about as ignorant as the U.S. immigrants.  Even today I am encountering Americans in Paris who have no clue about citizenship-based taxation or FATCA.  Unlike U.S. immigrants or Green Card holders, these citizens can vote but their vote/voice is ineffective for two reasons:  they are required to vote in their last U.S. state of residence and most U.S. politicians fear supporting them lest they be accused of "coddling tax evaders."

It has come as a terrible surprise to Americans abroad that people in the homeland have about as much contempt for them they do for immigrants.  Homeland Americans do not love their "Domestic Abroad" and routinely characterize them as "traitorous Benedict Arnold's."  Now these citizens abroad are in a complete panic now that they are aware of the U.S. tax and reporting requirements.  They are facing the same compliance issues as U.S. immigrants and they are now encountering discrimination in their host countries (loss of local banking services, for example, or limited retirement investment opportunities or even being cut out of business deal by non-US partners) as a result of FATCA.

Many of them cannot easily return to the U.S. - if they did they would have to close their businesses or leave their jobs, get divorces from their foreign spouses and, in some cases, leave their minor children behind in the host country.  Contrary to popular belief in the homeland, the vast majority of these people are not millionaires and run a real risk of arriving back home in the U.S. with limited assets, if not in a state of outright penury. On the other hand, they can no longer continue to reside in their host countries as U.S. citizens where they risk paying double taxes (U.S. taxes in addition to host country taxes) and must pay the increasing cost of compliance (international tax specialists to file the 1040 and a whole host of other forms demanded of overseas citizens who have built lives abroad and are permanent residents of their host countries).  Even Nina Olsen, the IRS Taxpayer Advocate in the U.S., said in her 2011 report:
The complexity of international tax law, combined with the administrative burden placed
on these taxpayers, creates an environment where taxpayers who are trying their best to
comply simply cannot. For some, this means paying more U.S. tax than is legally required,
while others may be subject to steep civil and criminal penalties. For some U.S taxpayers
abroad, the tax requirements are so confusing and the compliance burden so great that they give up their U.S. citizenship.
And that sums up quite nicely what is, in fact, happening.  Those who are in the know and can afford it are mostly "complaining and complying" while those who cannot are renouncing U.S. citizenship. 2011 was a banner year for renunciations of U.S. citizenship.  2012 will be worse (see this and this excellent analysis over at Overseas Exile.)

Foreign Financial Entities/U.S. Banks:  Foreign banks and financial institutions are going to groan under the weight of compliance.  There are IT systems and bank procedures that will have to change radically.  Some banks will simply decide that the costs of compliance are too high and will shed customers with a U.S. connection.  Others will disinvest from the U.S. entirely.  This is already happening in Germany and Switzerland and probably other countries I don't know about.

As for the U.S. banks they are also in the fight.  The U.S. Treasury Department has proposed new regulations that would force U.S. banks to report the interest income of their foreign depositors to foreign governments.  This would place U.S. banks in a similar situation to that of the FFI's under FATCA.  They would have to know (or inquire about) the citizenship of their depositors and track account information in order to report it to foreign entities.  Some U.S. Senators are fighting this tooth and nail but I think they will lose.  Banks are about as unloved as U.S. immigrants/emigrants and I doubt anyone is going to cry for them. Not to mention that passing a law to stop this new regulation is a kind of admission (at least in my view) that the U.S. is quite happy to welcome other country's tax evaders as long as they are citizens of other countries.  Yes, in the world of tax havens, the U.S. is the tallest midget in the room.  And finally there is too much at stake here. If the Treasury Department cannot make this rule stick, then there will be no reciprocity (information exchange) and foreign governments will be much less willing to cooperate on FATCA since there will be nothing in it for them.

Foreign Governments:  If there is real reciprocity, I think most foreign governments will go along with FATCA and I think that is how they will sell this to their citizens who are, at the moment, blissfully unaware of the debate.  However, they are running a real political risk.  Their banks are already up in arms but the real moment of truth will come when a sufficient number of non-US citizens are caught in the citizenship-based taxation/FATCA trap and it explodes in the media.  Countries will have a very hard time explaining to their constituents that they were willing to compromise their sovereignty and allow the U.S. (of all places) to tax or penalize their citizens.  The worst possible case would be one concerning an "Accidental American" (someone born in the U.S. who didn't know he had U.S. citizenship and is subsequently caught by the U.S. IRS and fined or forced to file U.S. tax returns in order to renounce.)  I believe that this would be a "scandale" of epic proportions in a country like France and the French government would have to make a very hard choice:  protect her citizens and risk the wrath of the U.S. or comply with U.S. tax law/treaties and turn an innocent French citizen over to the tender mercies of the American justice system/Internal Revenue Service.

United States:  While there are some real benefits of citizenship-based taxation/FATCA for the U.S. government, there are also some significant downsides.  For one thing Senator Rubio is absolutely correct that requiring U.S. banks to be "agents for foreign tax collectors" will cause a massive exodus of foreign money from U.S. banks.  That is a no-brainer.  FATCA itself will do the same but to a lesser degree.  Renunciation/relinquishments of U.S. citizenship will continue to rise and will start to get media attention.  I also predict a spike in compliance with U.S. tax laws and reporting requirements as people prepare to renounce (potential renunciants must have filed 5 years of U.S. tax returns before they can exit).  There will probably be a sharp drop in naturalizations - fewer people taking on U.S. citizenship.  Immigrants with high income potential and assets in their home countries will think twice about the U.S. - Canada will probably be the beneficiary here.    These are the tangible consequences of the current situation.  I have regretfully come to the conclusion that none of this will make any difference.  The terrible thirst for revenue, the complete inability of the American political system to manage the debt and the political risk involved in raising taxes on citizens in the homeland add up to a situation where it makes sense for the U.S. government to go after people with little or no political power in homeland politics.  U.S. immigrants/emigrants are the "low-hanging fruit."

The intangible consequences are harder to measure but real.  For years there has been a kind of halo around U.S. citizenship. In all the years I have been abroad, I have never met (until very recently) an American citizen who wanted to give it up.  On the contrary, it was almost universally acknowledged that this was something precious, something to pass on the children along with stories about the Founding Fathers and the Constitution and all those quintessentially American things.  People were proud to be Americans wherever they were in the world.  There was something shameful about renouncing and the few who did it did so very quietly.

All that has changed.  Renunciation of U.S. citizenship has become THE topic and is now discussed openly by the American diaspora.  I do not know how to convey properly to Americans in the homeland just how angry and bitter Americans abroad are becoming as they realize just how little regard Americans in the homeland have for them.  Some of these people have decided not to leave quietly and they are venting their frustration and discontent in public forums.  From cheerful goodwill ambassadors, proud to affirm their connections to the U.S., they are now frightened of their own government, lurking on Internet forums because they are too afraid to go public, going public and writing endless letters to U.S. politicians who won't give them the time of day, or angrily venting after having lost all hope and resigning themselves to renouncing.

I will end this post by giving you my unvarnished take on it.  This is one of the saddest things I've ever seen in 20 years abroad and I believe that the American nation is diminished as a result.  Should Americans in the homeland be concerned?  I think they should.  Every renunciation or relinquishment, every immigrant who decides not to become a citizen, just takes American citizenship one step further toward toppling completely from its pedestal and that devalues everyone's U.S. citizenship whether they live in the U.S. or abroad.  It's a lessening of "soft power" and is a bucket of cold water cast over every American who thinks the U.S. is the "greatest nation on Earth" and "everyone wants to come to the U.S. and become a citizen."  As much as people in the homeland like to vilify the renunciants, the reality is that U.S. citizenship for citizens abroad is becoming a terrible burden. Asking Americans abroad to risk their businesses and their families, to submit to discrimination in their host countries, to reduce themselves to poverty so that the U.S. can catch "tax evaders" is beyond unreasonable.  You cannot ask someone to make a choice between U.S. citizenship and a 20+ year marriage and the custody of minor children.  That "choice" is so horrific as to call into question the basic goodness of the people who have forced that kind of decision on its own citizens.

As a result I see us moving toward a world where renunciation will become more and more common and American citizenship will be nothing particularly special - it will be "right-sized" to be no more or less then the citizenship of any number of other very nice countries except for that one peculiar institution which sets it apart:  citizenship-based taxation and a willingness to hunt down and harm its own citizens.  And I think that day the U.S. will lose something very precious that it will never ever get back.

Monday, March 26, 2012

The Diaspora Tax War of 2012: Stakeholder Analysis

I was a teenager during the Reagan years in the U.S. and I remember a conversation I had with my parents once day as I was spouting anti-regulation free market rhetoric at the dinner table.  My father said something to me I've never forgotten in reply to my rather uninformed ramblings.  He said, "Just remember that government regulation is what made it possible for us to send you to college."  What did he mean?  Well, my father owns a consulting company and one of their services is to help other companies build and run their facilities in compliance with U.S. government regulations.  The more complex the laws and regulations, the more lucrative the services.

Remembering that lesson got me thinking about  the FATCA/citizenship-based taxation situation as it stands today.  For those of you just joining the conversation, the Diaspora Tax War of 2012 is about the taxation and reporting requirements for U.S. persons (U.S. Citizens and Green Card Holders).  U.S. persons are required to report their income regardless of where it is earned or where they live.  A new law called FATCA would require foreign banks to report the account information of all U.S. persons (U.S. citizens and Green Card holders) to the American IRS and imposes draconian fines on foreign entities for non-compliance.

Clearly, these laws and regulation (old and new) are going to be detrimental to some people and an opportunity for others.  When these things are made it is often not obvious just who the stakeholders are and who will win and who will lose.  It's a rare ill wind, however, that does not blow somebody, somewhere, some good.   I thought it would be instructive to look at the different actors and try to get a better picture of who stands to gain and who stands to lose in this affair.  Today let's talk about some of the possible winners and tomorrow we'll look at the losers (alas, I'm one of them).  As always, feel free to disagree with my analysis or add your point of view in the comments section.

International Tax Lawyers/Tax Preparers:  Just run a search on "FATCA and international tax lawyers" and see how many hits you get.  A lot.  Before FATCA it was already necessary for many of us American citizens and Green Card holders abroad to call on these people in order to properly file our U.S. taxes.  The U.S. tax code has 72,000 pages and the rules concerning U.S. persons who live abroad are very complex.  There are treaties to be consulted and Foreign Tax credits to be found - not a simple matter even for people in relatively simple situations.  Now that FATCA is coming on-line and there is some media attention about U.S. citizenship-based taxation, people are coming out of the shadows and realizing that they are not compliant.   For these people, consulting a good tax lawyer is not optional - it's a necessity.  You'll also notice that a lot of these firms are specifically offering FBAR and U.S. tax compliance services.  One I found is even targeting its offering to those "Accidental Americans" who need help getting compliant so they can renounce their U.S. citizenship.  There is a market here filled with fearful confused people and it is growing.  As a result, these firms are going to make money.

Management and IT Consulting Companies:  As non-US banks become aware of FATCA, all of the big management consulting companies are getting into the game.  Deloitte has an entire site devoted to FATCA - all the key dates, resources and latest news.  They even have A Practical Guide for Analyzing and Implementing the Newly Proposed Foreign Account Tax Compliance Act (FATCA).    On the IT side, these banks are looking at major changes to their systems and will need IT people to plan and implement the changes.  This site is already offering tips and advice on such topics as "Data Quality - the Core Enabler for FATCA Compliance."  Based on my experience with SOX, I predict that FATCA compliance projects will be big revenue generators for these firms.

FATCA Experts:  There is a new niche profession that has been spawned by FATCA called "FATCA Analyst."  According to this site, someone with this expertise can command a very high salary in the U.S.  This just might be a great opportunity for those of you looking for an international job.  Here is a position in Geneva, one in the UK,  and one in New Zealand.  For now a lot of them seem to be contract jobs but I think that once the path to FATCA is clear, these will turn into either long-term contract or full-time positions.  Looking at the qualifications (international tax knowledge, language skills, experience with compliance projects) these people will command high salaries everywhere.

U.S. Government:  This is a mixed bag and I think there are ways in which the U.S. government will lose but let's just look at some of the advantages.  The U.S. government has limited information about Americans abroad (they are not part of the census) but they will have a great deal more information once they start filing tax returns and FBARS (if they are non-compliant).  A U.S. 1040 reveals a lot:  where that person worked and in what profession, how long he or she has lived abroad, if he/she owns property, has he or she taken on another nationality and so on.  From that they can probably make an educated guess as to whether or not the person will ever return to the U.S. Since the compliance burden is on the U.S. person abroad, the FFI (foreign financial entity) and perhaps the foreign government, this is a very cost-effective way of basically doing a partial census of this population.  The U.S. government will also gain revenue.  This site has a pretty good analysis (scroll down to the question "The number of citizens who have been non-compliant while overseas is staggering. Given the constant flow of people moving abroad and returning to the U.S., we'd guess that right now there could be well over 10 million citizens with non-compliant or non-filed returns for multiple years spent overseas.") In fact, I suggest that you read the entire FAQ - it's that good.  Now given that Americans abroad use no services in the U.S. and the majority earned their money in their host countries, this is a wealth-transfer from the host country to the U.S. that is pure profit for the American government (aside from the costs of processing the returns but, who knows, perhaps they will simply improve automation or outsource the task.)  Looking at it very coldly, this type of taxation is politically very popular at home, allows the U.S. government to capture the productive power of its citizens abroad and will net better information to refine future tax and reporting laws.  All this at a very low cost to the U.S. taxpayer.

Foreign Governments:  This is another mixed bag but it looks like the U.S. government is willing to consider reciprocity.  This means that they are willing to force U.S. banks to report to foreign governments.  Once those governments have that data and can analyze how much potential revenue there is, they can make their own laws to capture the productive power of their citizens abroad.  I doubt most countries would try to implement a full citizenship-based taxation system like the U.S. has but they could certainly try something a little more modest like a tax on capital gains earned abroad or interest income.   Interestingly enough, the French President, Sarkozy, is actually proposing something very similar to the U.S. system which would require French citizens abroad to declare their foreign income and taxes and pay the difference between what they already pay in their host countries and what they would pay if they lived in France.

So there you have it.  I'm sure that some of you can come up with other "winners."  Let me be very clear that this post is not about taking a position for or against citizenship-based taxation/FATCA (both of which I am firmly against).  Let's just call this a "Stakeholder Analysis."  Tomorrow we'll talk about the other stakeholders in this affair who are definitely going to lose and how they are refining strategies to manage the impact.

Saturday, March 24, 2012

European Blue Card - Update March 2012

Time for another Blue Card update.  Overall things are moving along quite well but there are still some hitches.  Back in November I reported in this post that the EU had chastised six countries (Germany, Italy, Malta, Poland, Portugal and Sweden) for their failure to meet the EU deadline for implementation.    According to this article, Luxembourg and Malta are off the hook since they have started the process of passing legislation to comply with the Blue Card Directive.  However, in the latest press release from Europa, the EU has warned three other countries (Greece, Austria and Cyprus) saying:
Three Member States are still making it too difficult for highly skilled people to come and work in the EU, prompting the Commission to act. Despite having been warned in July 2011, Austria, Cyprus and Greece have not yet transposed the rules of the Blue Card Directive, which should have been implemented before 19 June 2011. This is why the European Commission today issued reasoned opinions (Article 258 TFEU) requesting Austria, Cyprus and Greece to bring their laws into line with EU legislation.

The Commission goes on to say (and I found this very heartening):
If Europe is to secure economic prosperity, remain competitive and maintain its welfare systems, it needs immigrant workers. The current economic and financial crises makes this need all the more pressing, while highlighting the need for common rules and a comprehensive and balanced EU migration policy.
So whatever the rhetoric at the Member Country level, the EU is committed to bringing in immigrant workers and will invoke EU treaty provisions (Article 258 TFEU) to make them comply with the Blue Card Directive. I personally don't think it will end up in the European Court of Justice.  In the case of Greece, for example, they have some very good reasons for not having complied.  Honestly, does anyone think this is one of their top priorities right now? 

On to the country updates:

France:  Looks like the prefectures are finally getting their procedures together.  This document, "PIÈCES À FOURNIR pour une demande de titre de séjour « Carte bleue européenne" (Documents to provide for a request for a EU Blue Card) was put on-line early March by the Prefecture de la Vienne (western part of France).

Update:  Wullar provided this great link in the comments section:
All the French Blue Card info you could possibly want and it's in English.  Thanks so much, Wullar, for sharing that.

Luxembourg:  This government site "Portail  Citoyens" has published a page on the Blue Card and how to obtain one.  You'll notice that the minimum salary is 66,000 Euros except for those professions "belonging to groups one and two."  Follow this link to the ILO CITP they refer to and you will see that IT people are in group two which means that the minimum salary could drop to 53,000 Euros if the government decides that there is a real need in that sector.

Sweden:  This site, The Official Gateway to Sweden, has this very welcoming message on their main page:  
If you are thinking about moving to Sweden for work, you've come to the right place. is aimed mainly at non-EU/EEA citizens interested in working in Sweden for at least one year.
Above is a step-by-step guide to the Swedish migration process, which has become a lot easier for non-EU/EEA citizens* due to new rules in Sweden. The portal also describes some of the advantages of a work life in Sweden.
On the other hand the EU Immigration portal is reporting that "There is no specific scheme for highly-skilled workers in Sweden" and I could not find specific Blue Card information on the site.  However, I did find this link to the Swedish Migration Board which has an on-line application procedure for work permits and this page which explains the process for non-EU migrants.  So, it looks like Sweden is not yet ready for the Blue Card.
Romania:  This site, European Union Blue Card, (really good site by the way) is reporting that, yes, Blue Cards are being issued and someone actually has one.  Here are the details as of early March: "Move One Inc. is proud to be among the first recipients of the so called “blue card” work permits issued in Bucharest, obtained on behalf of a highly qualified third country national and his Romanian company. Move One Inc. is a logistics company with its headquarters in Dubai and a branch office in Romania."
That is excellent news.  :-)
I'll stop there and open up the discussion in the comment section.  As always, if you have your own news or links to share, please feel free to post them.

Friday, March 23, 2012

Going International is Not as Easy as It Looks

This New York Times article, U.S. Stores Learn How to Ship to Foreign Shoppers, is a very good read. We may be in the year 2012 but we have a long way to go, folks, before the "world is flat" and we can seamlessly sell each other our national goodies.

This article by Stephanie Clifford describes some of the difficulties U.S. companies face when they decide to do business with the rest of the world.  She focuses primarily on the problems of international shipping.  A company has a product and an overseas customer wants to buy it.   Sounds like an ideal situation, right?  Unfortunately, it can be a huge headache.  There are many areas where serving international customers can be a challenge.  For example, the ordering system.  A company that never envisioned international markets probably didn't set up its systems to manage different address and phone formats, salutations, honorifics and languages and diverse shipping options.  To give you an idea of how troublesome this can be,  here are three different address formats for three different countries:

The American Church in Paris
65 quai d'Orsay
75007 Paris
Tel: +33 (0)1 40 62 05 00

Lycée Franco-Japonais de Tokyo / 日仏学園
1-2-43 Fujimi Chiyoda-ku / 1-2-43 富士見 千代田区
102-0071 Tokyo / 東京 102-0071
Téléphone : +81 (0)3 3261 0137 / Télécopie : +81 (0)3 3262 6780

Smith Tower Management
506 Second Avenue, Suite 1021
Seattle, Washington 98104
Telephone (206) 622-4004
Facsimile (206) 622-9357

Now you might think that in a globalized world companies would have designed these systems to be global from the very beginning.  That presumes that the company had international in mind right from the start and had the foresight to see how it would grow and move into other markets.  Even today, there are a lot of small national companies with modest ambitions that don't think about this.  As Kennedy once said, "There is always some poor guy that doesn't get the memo."  As for older companies, some of their systems are ancient (in IT terms), very fragile and not easy to change.  I've been in places with systems that were built by people who long ago moved on to other things or retired and they left no documentation behind them.  Fine way to get revenge if you are at odds with your company because by the time they figure it out, you will be long gone and you can watch them suffer from a safe distance.

The only bone I have to pick with the article is that it gives the impression that this is a U.S. problem.  Nothing could be farther from the truth.  It' s a problem everywhere even in Europe.  Not too long ago I interviewed with a small French multi-national and these folks were tearing their hair out over this.  They didn't even have a common customer or product database for the X number of countries they were selling to in the Euro-zone.  Amazing but true.

And that, ladies and gentlemen, is why IT people are so important.  If you want systems that enable you to sell and ship anywhere, anytime, anyplace, then you have to talk to us. :-) 

Thursday, March 22, 2012

A Few Odd but Interesting Books about Citizenship

Last year my spouse gave me an Ipad as a gift and it was love at first swipe.  I use it to take notes and send them to my mailbox but the finest feature is, of course, having Kindle and being able to order books from Amazon.  Instant gratification.  I find a book I want and I can actually have it in under 3 minutes.  When it comes to books I'm a little like an addict in a crackhouse.  As I delve into the topic of citizenship, I found a few titles a bit off the beaten path that some of you might find interesting.  All of them are good and have rather interesting approaches to the problem of citizenship in a modern globalized world:

The Future Governance of Citizenship by Theodora Kostakopoulou (2008) :  Modern citizenship has a 200 year old pedigree that is, according to the author, a bit frayed around the edges.  She argues that there are four main assumptions underlying the modern model:  priority, exclusivity, supremacy and cohesion.  These are things that are being challenged by globalization, technology and mass migration.  The current citizenship model is rapidly becoming obsolete but most efforts in the citizenship realm are just fine-tuning the existing model.  Kostakopoulou also uses elements of the existing model but what is interesting is how she divorces them entirely from the idea of the nation (that bounded national community).  Her model is based instead on domicile.  "Domicile could reflect either the special connection that one has with a country in which (s)he has his/her permanent home or the connection one has with a country by virtue of his/her birth within its jurisdiction or of his/her association with a person on whom (s)he is dependent."  In short it is about connections and "bonds of association" and not about nations.  She envisions three types of domicile that could be the basis for acquisition of citizenship:  Domicile by birth (jus soli), domicile by choice (permanent residency in another country) and domicile of association (based on a strong link between dependent and independent persons).

The Ironies of Citizenship by Thomas Janoski (2010):  Great discussion on the politics of granting citizenship.  Naturalization rates in modern countries vary enormously from state to state:  Canada has a very high rate, Germany has a very low rate and the U.S. has a declining rate. In some states it's very easy to become a citizen and in others it is very difficult. Jonoski argues that the first step is to stop tying reasons for immigration to reasons for wanting or allowing naturalizations.  The two, he says, are not necessarily tightly linked.  States can very welcome to immigrants but very hostile to grant them citizenship status.  On the migrant side there may be very good reasons to immigrate but not to take on citizenship.  His analysis of nationality policy looks at four types of regimes to try to explain why certain countries are open and others are not to naturalization and integration:

Colonizing countries:  These countries first tried to control their "colonials" by integrating them into the military and the bureaucracy which leads to some form of colonial citizenship over time.  Colonizing nations tends to be open to granting citizenship when colonials adopt the colonizing countries values. This is a lengthy process that unfolds over generations and in the case of long-term colonizers like the French or the British, leads to reverse migration. Yes, the colonies come "home."

Non-colonizing and Occupying Countries:  These are states that did not have significant colonies abroad BUT many of them experienced high levels of emigration.  "When former citizens reject their homeland by emigrating and the state does not develop colonies for the praise and glory of the empire, remaining citizens try to rationalize the rejection..."  Fertile ground for extreme forms of nationalism.  These states are highly resistant to granting citizenship to foreigners.

Settler Countries:  These are the once-colonized states that are now independent.  The ease of gaining citizenship in these countries is tied to three things:  territorial expansion, destruction of native peoples and managing labor shortages.  These countries tend to be very open to immigration and have low barriers to the acquisition of citizenship. Examples:  Canada, Australia and the U.S.

Nordic countries:  These states were not colonizers or colonized but they have very high rates of naturalization (almost as high as the settler countries).   The countries have small indigenous populations (Saami and Inuit) but that isn't the reason for their liberal naturalization regimes.  Janoski argues that it has to do with a particular kind of social democratic politics.

Based on the above Janoski has four hypotheses:

  1. Colonizing countries will have moderate barriers to nationality established by nationality laws and a moderately high level of naturalization in proportion to their colonization throughout the world;
  2. Non-colonizing countries, especially former occupiers, will have the highest barriers to nationality and the lowest naturlaization rates;
  3. Settler countries will have the lowest barriers to nationality and the highest naturalization rates. Indigenous population decline in each settler country correlates positively with naturalization...;
  4. Nordic countries will have residual barriers to nationality but moderately high naturalization rates based on cumulative left party power.

The Birthright Lottery by Ayalet Shachar (2009):  This one is probably the most radical attack on jus sanguinis/jus soli (or birthright citizenship) that I've ever read.  He/she makes the case that this type of citizenship is a lot like aristocracy or inherited property and privilege.  By virtue of sheer chance, some people are born into a citizenship by which (through absolutely no merit of their own) they receive certain benefits.  This is intrinsically unfair, almost feudal, and downright undemocratic.  The author says, "citizenship may be thought of as the quintessential inherited entitlement of our time" and asks "what is citizenship worth?"  Some of the remedies are quite radical and the author proposes instead another model of citizenship acquisition called jus nexi: a  "genuine-connection principle of membership acquisition, establishing that citizenship must account for more than the mere automatic transmission of entitlement."  Basically citizenship should be based on links, connections and a genuine "social fact of membership" - not just blood or place of birth.

Wednesday, March 21, 2012

Global IT

When I was a child a "body shop" referred to a place where you went to get your car fixed.  For those of us who work in late 20th century/early 21st century IT, it has another meaning altogether. "Body shop" in our context refers to IT consultancy firms that hire IT workers and send them off on short to medium term assignments for various clients at home and abroad.  I've worked for this type of firm in France where they are called SSIIs (Société de services en ingénierie informatique.)  It's very common here for a young IT worker (engineer or technician) to start his/her career in one of these places and then move up to full-time stable employment in the IT department of a regular (non-IT) company.  At least that was my aspiration when I started my IT career and it seemed to be shared by my colleagues.  It was a stepping-stone toward something better.

To understand why these companies exist you have to understand two things:  recent history and the nature of IT work.  It goes back to the mid-1990's and the ramp-up to the year 2000.  Many businesses around the world had legacy information systems that had to be updated in order to enter the 21st century and still function properly (the infamous Y2K bug).  There was huge demand at that time for IT workers but it didn't make much sense to hire them permanently and so many companies outsourced the system upgrades to these body shops which could be local or in another country like India.  I worked for one SSII in France at that time on one of these projects at a French multi-national based in Paris.  Heady days because we had more work then we knew what to do with - my SSII was hiring people left and right and they were often people with little or no IT experience.  This boom continued in Europe because of the conversion to the Euro.

But these IT consultancy companies did not disappear once the Y2K and Euro conversion projects were over.  Running a complex information system is a little like being the Red Queen in Alice and Wonderland where, "It takes all the running you can do, to keep in the same place."  It's a constant struggle to keep the systems up-to-date: software updates, replacing worn-out or obsolete material or integrating new technology into the system for new business needs.  Often these project require expertise that is not available in-house but for which the company will have no need after the project is over.   Hence, it make a lot of sense to seek outside help for the duration of the project.  A lot of this project work can be done by a skilled IT worker from anywhere.  Take a company in France that wants to update its email system, for example.  If the company is using a standard software package from a major vendor, that work could be done locally or it could be outsourced to a company in North America or Asia.  There are a lot of factors that go into making that decision and I can assure you that cost has been a big (if not the biggest) one.  As a result there is no such thing as an American, French, German, Brazilian IT job.  A Unix sysadmin in France is not competing against other Unix sysadmins in France or in Europe, he/she is competing with all the other perfectly competent Unix sysadmins in the world.   True, proximity and language skills do give the local IT person some advantage but it is a very slim one.

Why?  Well, in a lot of cases the IT work can be done from another country. Where you can't bring the person to the work, then you can send the work to the person.  If you look at the reaction of Indian IT companies to the tightening of H1-B visas in the U.S., you will see that they simply switched models and had more of the work done in India thus bypassing the visa process altogether.  I've seen French companies do this by shifting work to North Africa.  Where proximity does matter, almost all modern countries today have highly-qualified worker programs to entice IT people to come to their countries.  In an election year there is often a lot of rhetoric about restricting immigration but once the spotlight is off, it goes back to business as usual.  So you have situations like Claude Gueant loudly assuring the French that the current administration will lower immigration while the French government quietly implements the European Blue Card scheme. Or you have the U.S. bill H.R. 3012, Fairness for High-Skilled Immigrants Act, which passed in the House of Representatives by a vote of 389 for and only 15 against.   I think it will pass after token resistance from various Congress members up for re-election who need to demonstrate that they are "protecting American jobs."

Sorry for the cynicism.  My issue is not at all with highly-qualified worker programs.  What amuses me are the slights of hand and other shenanigans by various countries and their politicians to "control" this.  What I find less amusing is the dishonesty.  There is still huge demand for these workers in many countries and highly-qualified IT workers have many options. However, countries like the U.S. or EU member-states are still publicly acting as though they had the upper hand and that they are doing these people a favor by generously granting them work visas.  Outside of the public eye, however, they do realize that this is a competition among states and migrant IT workers are rational actors who will look for a deal that is the best fit for their circumstances.  As the French would say, this situation is "malsain."

A more honest conversation would be politically incorrect but I think those of us who work in IT all over the world need to push for that conversation to happen.  Today, we don't really have a voice and the agenda is being set by states and companies who need us but want to set the terms so as not to upset their constituents or for their own profit.  Whether we work for SSIIs, "body shops," internal IT departments or as independents we have everything to gain by recognizing our common interest (whether we are migrants or local) and developing global organizations to make those interests known.

Yes, folks, I think we need a union. :-)

Tuesday, March 20, 2012

Good Resource for International Jobseekers

For those of you who might be interested in job offers outside your home countries, Overseas Exile has compiled a very nice list of international job sites.   Have a look and if you have some of your own that you would like to share, point them out in the comments section so they can be added to the list.

Monday, March 19, 2012

U.S. Citizenship: Discrimination and Accidental Americans

I received a lot of email and comments about last week's post, Citizenship 101 for Americans. I want to thank everyone for reading and taking the time to write.  Based on what I received, I thought I would post a follow-up here concerning two subjects that generated the most mail:  Discrimination in the transmission of U.S. citizenship to children of U.S. citizens abroad and "Accidental Americans."

Let's tackle the discrimination issue first.   In my previous post I wrote:

A child born in China of an American mother who lived in the U.S. at some point prior to the birth and a Chinese father is an American citizen by blood even if that child never sets foot on U.S. soil.

This is true but it's not the whole story. As one commenter and several emails pointed out, there are U.S. residency requirements for that American woman that must be fulfilled if she is to transmit her American citizenship to her child born in China. Oddly enough, these residency requirements are different depending on if she is married or not.

Married: If she is married to her Chinese man and her child is born after November 14, 1986 then to pass U.S. citizenship to her child "she must have been physically present in the United States for a period (or periods totaling) five years prior to the birth of the child, at least two years of which were after the U.S. citizen parent reached the age of fourteen years."

Unmarried:  However if she is not married to him and the child is born out of wedlock then "the U.S. citizen mother must have been physically present in the United States for a continuous period of at least one year before the child's birth. This period of presence may have been at any time before this child's birth."

Yes, you read that correctly. A child born in wedlock to a married couple where one is an American citizen and the other spouse is a foreign national is an American citizen if the U.S. citizen lived in the U.S. for at least five years (two after the age of 14).  However, if the child is born out of wedlock to an American mother abroad the residency requirement is a measly 1 year on U.S. soil.

If discrimination against the married were not enough, I invite you to read the requirements for Americans fathers who have children out of wedlock overseas here (see the section, "Children Born out of Wedlock - Born to a U.S. citizen father and an alien mother")  It seems downright insane but, as one commenter pointed out, these rules were recently upheld by the U.S. Supreme Court in this ruling, Flores-Villar.

So, let me get this straight (and correct me if I'm wrong):  The U.S. seems to favor transmission of U.S. citizenship to children of unmarried American women abroad who have the most tenuous connection possible (1 year residency) to the home country.  I would really appreciate someone explaining the logic behind all this because I, quite frankly, don't get it.

The second issue was that of "Accidental Americans" - those children inadvertently born on U.S. soil who acquire U.S. citizenship via jus soli and keep it (often unknowingly) all their lives unless they renounce.  Some of the people I talked to about this were not at all amused.  The most common reaction I've heard was "They can't do that.  I'm French (or another nationality) and to hell with the U.S. government.  I am not a U.S. citizen and I refuse to be considered one.  They can't enforce this."

I understand their anger completely. This is ridiculous and a democratic nation-state should not be in the business of forcing people to be citizens.  My take on it is that, whatever the circumstances around the acquisition of citizenship, an individual should be able to renounce or relinquish any time he or she wishes.  The U.S. does not make it easy or cheap to opt out and I think that is shameful. Is the U.S. really so desperate for citizens that it would hold people captive?  This makes no sense whatsoever  and is potentially going to cause major diplomatic incidents with other countries because, yes, it appears that the U.S. is trying to impose citizenship on these people.

How?  Well, the most obvious method to catch those "Accidentals" is attempted entry into the U.S. on a foreign passport that lists a U.S. place of birth.   The Isaac Brock Society is reporting that Canadians trying to enter the U.S. on Canadian passports with a U.S. birthplace are being hassled at the border and told to get U.S. passports or produce a certificate of loss of U.S. nationality (CLN). Phil Hodgen's blog is reporting that the Premier of New Brunswick, David Alward (Canadian citizen born in Massachusetts) is now having to comply with U.S. tax laws.  On the Europe side, the Lord Mayor of London, Boris Johnson, was caught in this trap and rather indignantly renounced his U.S. citizenship in 2006.  In France there is Anne Sinclair (DSK's wife) who appears to also be a U.S. citizen and who I assume has or will be required to file 1040's and FBAR's.  Finally, the brother of a personal friend of mine had a ghastly experience trying to go home to Seattle to see his mother.  He was traveling on a German passport (he had renounced U.S. citizenship years before) and was interrogated for over an hour at Sea-Tac before he was allowed entry into the U.S.   So they are paying attention at the U.S. border and anyone with a U.S. place of birth on their passport is likely to be questioned closely.

That was the simplest and most obvious method of flushing out those "Accidental Americans."  In the past, as long as they didn't travel to the U.S. they could live out their lives in blissful ignorance of their citizenship status and the U.S. had no way to detect them.  Enter FATCA.  Since these "Accidentals" have a U.S. place of birth, their local bank in Germany, France, the UK and other countries will know immediately that they are dealing with a potential "U.S. person" and will have to ask for further information to confirm that status.  If that "Accidental" cannot prove that he or she isn't an American citizen then the bank will be required to treat him/her as one and do the necessary reporting to the U.S. government.  I predict that once FATCA comes on-line and European banks start informing their clients of their status as U.S. citizens that there will be a mighty roar of anger directed at the United States.  A roar that may just be too little, too late.

So, my friends, I hate to break this to you but, yes, the U.S. government can indeed claim you as a citizen against your will and now has two methods to enforce it.  As for you Europeans accidentally born in the U.S. who are hoping that your countries will save you, it appears that at least five of them (UK, France, Germany...) seem to be delighted to cooperate with the U.S. government on this matter.  We'll see what happens at the EU level.

Real Men Don't Drink Wine?

This was passed along by my MBA Marketing Professor, Marco Protano, via Facebook.

This is a New Zealand advertisement that is anti-wine, pro-beer.  I thought it was quite funny and an interesting window into a part of NZ culture.

Sunday, March 18, 2012

Identity and Religion

My French friends, colleagues and family are often very surprised to discover that I am a Roman Catholic. In their minds, "American" is synonymous with "Protestant Christian."  Some even go so far as to imply that "French" and "Catholic" just naturally go together even in this secular Republic.  This seems to be true even of my friends who are supposedly atheists.  It has not escaped my notice that the vast majority of my friends here have had their children baptized in the Church.  "It's tradition," they tell me or, "It's part of French culture."

Well, mes amis, it's also a part of my culture of origin.  Just as the English language was brought over by European immigrants to the U.S., the Roman Catholic religion was carried to the New World by generations of German, French, Spanish, Italian and other immigrants where it took root and flourished.  Catholics are not a majority in the U.S. but they do constitute a very large minority.   In times past there was discrimination against them - you have only to look at the religious affiliation of American presidents to see it.  Out of over 40 U.S. presidents, only one Roman Catholic was ever elected to that office:  John F. Kennedy.

Growing up Catholic in the U.S. I was always aware of this.  It was never a problem per se, just a fact that, nevertheless, meant keeping a discreet silence when my Protestant friends enthusiastically talked about being "born again" or when Catholic positions on birth control and other controversial topics were dissected and found wanting over a dinner date.

So it was very odd to find myself in a country where Roman Catholics were firmly in the majority (around 65% in 2006) and Protestant Christians a very tiny minority (around 2%).  In some ways it has been liberating.  To know what Saint's Day is being celebrated, I have only to look at the weather report (for example today, March 18, is the day of Saint Cyrille).   When I walk down the streets of Versailles or Paris, there are churches everywhere if I want to light a candle or pray before going about my daily business.  If I want to go to Mass I have a multitude of options since most churches offer early morning, lunchtime and evening services every day.  Some of the Church's Holy Days of Obligation are also national holidays (something that seems rather unfair to other religions and contrary to the secular nature of the French Republic).

In other ways, however, it has been a little like walking through a minefield.  I have frequently been drawn into surreal conversations with French Catholics who were obviously having a moment of cognitive dissonance as they tried to square "American" and "Catholic" in their heads. Some have assumed I converted when I married a Frenchman (not at all  - I was baptized Catholic as an infant by my Catholic parents) and others have tried to explain to me that Catholicism in France is not at all like Catholicism in the U.S. or in other parts of the world.   One member of my French family even refused to believe that the sacraments (Baptism and Confirmation, for example) were the same in both countries or that the Mass is celebrated in the same way all over the world.

Another complication has been my status as an immigrant.  In theory, as a baptized, confirmed, practicing Catholic I am welcome in any church, anytime, anywhere.  In reality, I have learned to be very careful since some parishes (not the Church itself but the parishioners) seem to have an rather unhealthy connection with some of the more xenophobic anti-immigrant elements of French society.  If I so much as catch a whiff of the Front National, I back off immediately. In all fairness I cannot know how such people would react to me (in all likelihood they would consider me "not so foreign" and I would be very welcome) but I still find it painful to be around such people and the rhetoric hurts even when they carefully explain that they are not talking about me.  In fact, their words only make it worse because if I gratefully accept belonging on those terms then I am complicit in their hatred and ostracism of the Other.

With that in mind, and after much trial and error, I have found a few churches where I am comfortable and attend Mass on a regular basis.  The French churches that I attend (or have attended in the past) are Sainte Odile (the church where I was married and my children baptized) and Saint Ignace (the Jesuit church rue de sevres).  But the church where I feel the most comfortable and the most welcome is Saint Joseph's (the "mission anglophone") on Avenue Hoche near Etoile.  It is not so much that the Mass in in English (though it is nice to be able to sing hymns from my childhood) but the sheer diversity of the population.  In this context "English-speaking Catholic Church" means serving all the people in Paris who speak English as a first or second (or even third) language which means Chinese, Indians, Americans, Australians, Irish, Canadians, Sri Lankans, Africans and many other nationalities.  United by faith, national origin is irrelevant here.

Something that, in my view, ought to be the case everywhere.

Saturday, March 17, 2012

Ukulele Orchestra of Great Britain

About a year ago a friend from London showed me a clip from the Ukelele Orchestra and I was hooked from the first note.  I can't begin to properly describe their music - it's really something you have to see/hear for yourself.  This song, "Fly Me Off the Handel," is a particular favorite of mine.

There are many others on Youtube that are just as good.  If you liked this one, I also recommend "Killing Me Softly" and "Rawhide."

Enjoy and have a great weekend.

Friday, March 16, 2012

Citizenship 101 for Americans

This week I had the immense pleasure of going into town and having lunch with a very handsome and thoroughly charming American man near Saint Sulpice.  Like me he is married to a French national and has lived here in France for many years.  As you can imagine we had a lot to talk about but there was one topic in particular that had us both chortling over our meal:  how little Americans know about how American citizenship really works.  Over the years we have both heard some truly amazing statements and interrogations from people in the homeland about our status.  Americans don't seem to have a very good grip on what their citizenship really means:  how it is acquired, kept or lost, the duties and responsibilities attached to that citizenship and what it means in the world outside the U.S.

All joking aside, I find that a bit frightening.  Citizenship is an individual status - something that is between an individual (you) and a country and it will impact all aspects of your life.  Not understanding that relationship is downright dangerous and can get you into all kinds of trouble or, conversely, confer certain benefits that you may not be aware of.

Here are a few of the things I've heard or been asked about over the years about the status of American citizens abroad.  Some of these questions may seem very silly to some of you but I assure you the people who asked were genuinely interested (or genuinely hostile) and were very surprised by my answers.  I'll give the question/statement first and then my answer with links to sites where you can explore further.  As always, feel free to comment or challenge what I say:

Are all people born in the U.S. citizens of the United States?:  Yes, for the most part.  The Fourteenth Amendment to the Constitution says that anyone born on U.S. soil is a U.S. citizen.  This has been very broadly interpreted to mean everyone including babies whose mothers are tourists, businesswomen, students, undocumented workers and so on.  So, for example, a Frenchwoman on a business trip who goes into premature labor and has a baby in Boston has just given birth to a dual U.S./French citizen. This is irrespective of the wishes of the mother or father (even the other country's government has nothing to say about it).  Quite often the parents are completely unaware that the child is, in fact, an American citizen.  We call these children "Accidental" or "Involuntary" American citizens.

Nevertheless they are full U.S. citizens and have equal status with Americans in the homeland:  they have the right to return to the U.S. to live and work, they can vote in U.S. elections, they are required to have a U.S. passport to enter the U.S. and they are subject to all the tax and reporting requirements of the U.S. government.  Very often the only way these people find out they are U.S. citizens is when they grow up and travel to the U.S. on business or as tourists.   They are stopped at the border, questioned closely when the immigration officer notes their place of birth on their passport and then informed that they are, in fact, U.S. citizens.  This often comes as a huge (and often unpleasant) surprise to them.  The only people born in the U.S. who are not U.S. citizens are those who have renounced that citizenship formally at a U.S. consulate abroad and can present a CLN (Certificate of Loss of Nationality) if they are challenged.

You have to be born in the U.S. to be a U.S. citizen:  False.  American citizenship is transmitted though both jus soli (birth on U.S. soil) and jus sanguinis (blood).  A child born in China of an American mother who lived in the U.S. at some point prior to the birth and a Chinese father is an American citizen by blood even if that child never sets foot on U.S. soil.

People born in the U.S.who have never lived or worked there lose U.S. citizenship if they don't "activate" their American citizenship once they reach their majority:  False.  The U.S. has no automatic "opt out" mechanism for U.S. citizenship at the age of 18.  If a French child born in the U.S. but living in France does nothing once he/she reaches the age of majority then he/she is still an American citizen.   The only way to stop being one is to go down in person to the U.S. Embassy and renounce.  This process includes paperwork, interviews and in most cases a fee of 450 USD.  Failure to do this means that person is an American for life.

Americans who live outside the U.S. for X number of years lose U.S. citizenship:  False.  American citizenship does not come with an expiration date and is not tied to residency in the U.S.  An American citizen can leave the U.S. at any age, never come back to the U.S. to live and will still be an American citizen until he/she dies.

American citizens abroad can't vote:  False.  This is a situation so strange that it is practically a comedy.  All American citizens have the right to vote but it is tied to that U.S. state where he or she last resided or had a U.S. address. So, for example, a U.S. citizen born in California who last resided in the state of Washington and who then moved abroad and hasn't lived in the U.S. in 30 years will vote in Washington State elections.  Specifically that person is eligible to vote for Washington state representatives to the U.S. Congress (senators and representatives) and for President. In other states it appears that overseas Americans are also allowed to vote in the local elections as well as the federal ones.  There are even 18 states that allow people who have never lived or worked in the U.S. to register to vote where their parents were registered to vote.  

American citizens who marry foreign nationals and live in the foreign spouse's country lose American citizenship:  False and this one always makes me laugh because it is almost always thrown at American women who marry foreign men (rarely of American men who marry foreign women).  It used to be true in the early 20th century but those laws were challenged and dropped because, among other things, they were highly discriminatory toward women.    So, no, gentlemen, an American woman who marries a Frenchman (however mad that may make you) will still be an American for life unless she renounces.

American citizens who become citizens of another country automatically lose American citizenship:  False. An American who voluntarily naturalizes in another country is only committing a potentially expatriating act (one of 7 in fact).  However it is only an expatriating act (one that causes that person to lose citizenship) if it is committed with the intent of giving up U.S. citizenship. So, an American who becomes a citizen of Brazil, for example, will not lose American citizenship unless she intends to give up her American citizenship.  If that is not her intent, then she keeps her U.S. citizenship and becomes a dual.

American citizens abroad have to obey U.S. laws even if they are living in a foreign country:  True.  This is one that always amazes people because, after all, if someone is doing something legal in a foreign country that is illegal in the U.S. how in the world can the U.S. claim that U.S. law still applies?   Well, folks, in some cases it does though prosecutions are few.  Some U.S. laws are extra-territorial and American citizens, wherever they happen to be, are subject to them even if they are dual citizens.  Still don't believe me?  Here is a direct quotation from the U.S. State Department website:
However, dual nationals owe allegiance to both the United States and the foreign country. They are required to obey the laws of both countries. Either country has the right to enforce its laws, particularly if the person later travels there.

American citizens abroad receive special services and protection from the U.S. government:  This one is a heartbreaker because the answer is "no" for the most part.  There are no special services for long-term Americans abroad other than document services (passports and other official documents required by the host country) and some limited help when it comes to U.S. taxes.  Consular protection is limited to making sure that the family is notified if an American citizen ends up in jail or is in trouble.  They can also visit that citizen in jail and make sure that the conditions are correct.  That is about it and I want to emphasize that this is not at all the fault of the Embassy/Consulate personnel who are very nice, very efficient folks.  In my experience they always try to help but there just isn't a whole lot they can do for an American on foreign soil and they can do almost nothing for a dual.  A U.S. passport is not necessarily much help either - it doesn't buy special treatment or a "get out of jail free" card.  When a U.S. national is in another country and that country decides that person has done something wrong that person is in their jurisdiction and will suffer the consequences.  I know people who have been in that situation and, yes, those U.S. citizens went straight to a foreign jail.

As for those very particular circumstances where American citizens need evacuation from dangerous situations, the reality is that this is a service for which those citizens will be billed.  Yes, you heard me right, and you can find this information on the U.S. Department of State website where it clearly states:
Departure assistance is expensive. U.S. law 22 U.S.C. 2671(b) (2) (A) requires that any departure assistance be provided “on a reimbursable basis to the maximum extent practicable.” This means that evacuation costs are ultimately your responsibility; you will be asked to sign a form promising to repay the U.S. government. We charge you the equivalent of a full coach fare on commercial air at the time that commercial options cease to be a viable option. You will be taken to a nearby safe location, where the traveler will need to make his or her own onward travel arrangements. If you are destitute, and private resources are not available to cover the cost of onward travel, you may be eligible for emergency financial assistance.
I had a friend who was in a bad situation here in France.  She had medical problems, an abusive spouse and was completely destitute (her French spouse took all the assets). She went to the U.S. embassy here and they were very very sympathetic but the only thing they could do for her was provide her with a short-term loan for a plane ticket.  Since there was no one to help her once she got home (and she had visions of ending up sick on the streets of her home city in the U.S.) she thanked them and then threw herself on the mercy of the French who did care for her and helped her to sort out her situation.  She is now a French citizen and a very loyal and grateful one.

Another very long post.  I'll stop there.  Please feel free to comment or add your own questions and answers.  I deliberately did not touch on the U.S. tax/reporting situation but I'm sure some of you will be more than happy to talk about it. :-)