New Flophouse Address:

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

Monday, February 18, 2013

Flophouse Citizenship and International Migration Reading List Updated

Time for another update of the Flophouse citizenship/migration reading list.  Out of all the books I've read in the past few years, these are the ones that made the cut.  New stuff is in green.  I highly recommend all the titles below - read them and you will never look at citizenship or migration the same way again.  All the underlined titles take you directly to the book on Amazon.  I would really appreciate suggestions for other titles that might be of interest.  I promise to read and add them to the list if I think they are good.

This is a very well-written, well-argued book.  The author is ambitious and confronts some of the most difficult topics around migration:  Why is International Migration Such a Contentious Issue?  Are Goods and Capital More Important than People?  Don't Always 'Blame' the North, and so on.

The Sovereign Citizen:  Denaturalization and the Origins of the American Republic (2013) by Patrick Weil  Really superb book.  Excellent research into the un-making of American citizens in the 20th century.  

Citizenship and Those Who Leave:  The Politics of Emigration and Expatriation by Nancy L. Green and Francois Weil (2007)  I contend that you cannot talk about immigration without also discussing emigration.  A fine work - excellent chapters on how states (UK, Holland, U.S., France and others) have tried to manage emigration.

International Migration and the Globalization of Domestic Politics edited by Rey Koslowski.  Some very good insights into how international migration and diaspora politics affect politics back in the home country.

Rights and Duties of Dual Nationals:  Evolution and Prospects edited by David A. Martin and Kay Hailbronner (2003)  Fine set of articles on dual citizenship and such things as military service, extradition, political rights (Peter Spiro), denationalization and many others.  Pricey but worth every penny.

International Migration and Citizenship Today by Niklaus Steiner (2009).  A very fine book on the political, economic and cultural impact of immigration.  He frames the discussion around two essential questions:  What Criteria to Admit Migrants?  and What Criteria to Grant Citizenship?

Citizenship Today: Global Perspectives and Practices edited by T. Alexander Aleinikoff and Douglas Klusmeyer (2001).  This was one of the best books I read on the topic of citizenship with essays by Patrick Weil, Karen Knop and Richard T. Ford, among many others.   I particularly enjoyed Ford's contribution called "City-States and Citizenship" which was, for me, a real revelation.

States without Nations:  Citizenship for Mortals by Jacqueline Stevens (2009) A strong critique of birthright citizenship in all forms and a call for citizenship based on residency.  

The Perils of Belonging: Authochthony, Citizenship, and Exclusion in Africa and Europe by Peter Geschier (2009).  Outstanding read.  States make citizens and states can also "unmake" them.  Nativism and the never-ending debate over who really "belongs."

The Politics of Citizenship in Europe by Marc Morje Howard (2009).  A really fine study of the citizenship policies of the oldest member-states of the EU.  Read this book to grasp how citizenship laws have changed over time and the reasons why.

The Future Governance of Citizenship by Dora Kostakopoulou ((2008).  Good overview of the current citizenship models and a proposal for an "anational" citizenship framework.

Beyond Citizenship:  American Identity After Globalization by Peter Spiro (2008).  Excellent book that examines how globalization has changed the value of citizenship overall and American citizenship in particular.  Very thoughtful.  Very well-written.

Qu'est-ce qu'un Français? by Patrick Weil (2002).  Mr. Weil spent over 8 years in the archives researching this book and it is fascinating.  France has been something of a test lab for just about every combination of jus soli and jus sanguinis citizenship possible.  Everything has been tried and tried again.  I read the book in French but it is also available in the usual places in English.

Gender and International Migration in Europe by Eleonore Kofman, Annie Phizacklea, Parvati Raghuram and Rosemary Sales (2000).  If you are looking for some empirical evidence (as I was) for how migration, immigration policy and citizenship rights have different outcomes and impacts for women, this is a good place to start.

The Birthright Lottery:  Citizenship and Global Inequality by Ayelet Shacher (2009) An attack on both jus soli and jus sanguinis methods of transmitting citizenship.  Fascinating argument.

Aliens in Medieval Law:  the Origins of Modern Citizenship by Keechang Kim ((2000).  I've been meaning to write a post about this book since it has a very original take on the historical roots of modern citizenship.  I recommend it highly. 

Human Rights or Citizenship? by Paulina Tambakaki (2010)  Interesting ideas about how traditional models of citizenship and  human rights legislation are in conflict.

International Migration, Remittances and the Brain Drain edited by Caglar Ozden and Maurice Schiff  for the World Bank (2006)  This book contains a number of very interesting essays about the economic impact of remittances and brain drain/gain.  The editors point out that the potential for economic benefit for all parties (individuals and sending and receiving countries)  is substantial but policy decisions need to be made carefully (we are talking about people after all).

Let Them In:  the Case for Open Borders by Jason L. Riley (2008)  The author makes a very radical argument for simply opening the doors and letting people move where they wish.

Sunday, February 17, 2013

Ellen Goes to Washington

Ellen Lebelle was part of the AARO (Association of American Residents Overseas) delegation that was in Washington, D.C. last week for Overseas American Week.  ACA (American Citizens Abroad) and FAWCO (Federation of American Women's Clubs Overseas) were there as well.

Ellen has written a very nice blog post about what the delegates were up to, what they were trying accomplish, and how it went.  She gives you an idea of the context in which proposals were being presented.

Really helpful and I thank Ellen for sharing her impressions.  Opens up something that can feel like a "black box" to some of us and it makes one feel more a part of the overall effort.

A modest suggestion for next year:  Tweets, updates on Facebook, and more blog posts so we can follow the action in real time.

Saturday, February 16, 2013

Public Briefing on FATCA

On February 12, 2013 the OECD held a Public Briefing on FATCA at their Conference Center in the 16th district of Paris. After initially being refused entry because "priority was given to government and business," the organizers informed me Monday afternoon that they did indeed have space due to unexpected cancellations and they were looking forward to seeing me there.

It was a fascinating look at the nuts and bolts of FATCA negotiations and implementation. In addition to discussions about data exchange and the finer points of the final regulations, there were some important messages being passed between the US and the government and industry representatives in the room. I heard the words "burden relief" and "alignment" and "working with industry" many times over the course of the meeting. There seemed to be a need to assure industry that they have a say in the negotiation of the IGAs in each country and in the implementation process.

The OECD by simply hosting the event gave public support to the U.S. effort and they are clearly seeking to align their own initiatives with FATCA. For example, the OECD's position is that FATCA and TRACE are complimentary and they are looking for an alignment of the data models and data exchange formats that will be developed for both systems. That said, TRACE and FATCA have two different objectives: The first addresses source country taxation. The latter is about a "Common reporting standard for residence countries (building on FATCA IGAs; cf art 6.3 of the FATCA Model 1 IGA)" . Nonetheless, the goal is to have aligned systems.

As for the message to other governments, that was was the object of the very first U.S. presentation by Danielle Rolfes, International Tax Counsel, U.S. Treasury:

Ms. Rolfes started with a progress report on the IGAs. "Much was promised last time," she said. Since the last meeting four IGAs have been signed and they have initialed agreements with Spain, Norway and Italy. They have also initialed a Model 2 agreement with Switzerland

In answer to the question: Why is it taking so long to get these agreements signed? She had several explanations. Some of it had to do with the writing of the final regulations. Hundreds of comments on FATCA had to be taken into account and Treasury had to allocate resources to that task. In addition, the model agreements evolved as countries signed up and those evolutions had an impact as well in the writing of the final regs.

As for the IGAs, she said, most of the time needed to work out the IGAs has to do with Annexe 2 and the list of specific products exempted. It took time for Treasury to understand what those products were and to come to an agreement. She assured the attendees that this process should speed up now that the final regulations are out. Treasury tried in turn , she said, to write the final regulations to fit the vast majority of cases around the world.

As for the assertion that the delays in signing the IGA's are due to a lack of enthusiasm, well, she met that one head on. The problem is not at all about other governments being reticent about FATCA, she said, it's just a very time-consuming process. The implication was, of course, that there are other countries lined up to sign once the details are worked out. Perhaps this is true but they did not give any more information about where Treasury is in the process with those other countries who were never named.

The final regulations are out. Now what? Can they meet the deadlines? Ms. Rolfes said that she was reasonably optimistic, "if we can get your help." On the U.S. side Treasury has added more staff and is now able to allocate more resources to the IGAs.

The next speaker was Mike Danilack, Deputy Commissioner International at the IRS. He began his talk with a joke: Policy makers have great ideas, he said. We have to implement them. In addition, an IGA is not the end of the work for a country. Here are some of the things that still need to be done:

Universal schema: The electronic format for FATCA information has benefitted from the TRACE project. IRS is close to having a schema that all countries are happy with. That is for the capture of data under the Model 2 agreements. In the government to government model (Model 1) it is possible to use the same schema but governments still have to work out how they will gather information from their domestic financial institutions.

Bulk Data transmission: These transmission needs to happen on a schedule and the exchange must be both secure and efficient. Right now no system exists for governments to exchange this kind of information in bulk and on a schedule. The question of what standard/system will be used is still outstanding.

Registration: The FATCA model says an FI will make itself known to the IRS. How? Using an online web portal. IRS must also develop a unique numbering system for financial entities all around the world. the question is: Is this just for the US or do they develop a system that can be used worldwide?

All of the above will require Competent Authority government to govenrment discussions.

The floor was then given to the country representatives. These were all countries that have either already signed IGAs or are in the process of signing them:   UK, Italy, The Netherlands and Germany. The U.S. chose well - all were enthusiastic especially the UK and The Netherlands.

UK: The representative opened with a surprising comment. She said that the final regulations had a better deal than the IGA the UK signed. This, she said, needs to be reconciled.

Germany: No agreement so far. This is not due to a problem with negotiations, they had a heavy workload as well. FATCA is something new and all government departments need to have a look and there are issues that come up have to be dealt with first. But they are now in the final stages to have the agreement initialed. When? Soon. He stressed however that implementation will take time. Not sure about the timeline and and can't promise to meet the U.S. government's goals.

Italy: They are somewhere between the German and UK positions but they are now ready to initial the IGA. They had to translate the agreement into Italian. The translated text will then have to be validated with the US and their version compared to the UK one. After that they will sign and ratify. He stressed the need to work with local business community concerning implementation.

Netherlands: Very close to initialing an IGA in the coming weeks. However, they will need approval from parliament. "Looking forward to the champagne," she said when the work is done and the agreement is signed. She also mentioned that they are working closely with industry on implementation.

The last presentation was by Jesse Eggert, Associate International Tax Counsel, U.S. Treasury. He described the experience with FATCA as "An interesting ride so far,"

The statute was enacted in 2010 and in less than 3 years, he said, we've taken one of the more complicated ideas of the U.S. congress and transformed it into a set of comprehensive regulations. There are still questions. He described the goal now as getting, "The right amount of information about the right people."

Most common comments they received were about the burden of identifying customers and on the conflicts with domestic law. These have been solved, he said, in the IGAs. The U.S. can't change other country's laws but bi-lateral agreements can be used to resolve conflicts.

He then discussed some of the particulars of the final regulations and the IGAs. For our purposes, the two I thought most interesting were:

Local Bank Category: The final regs say that an institution does not have to report on residents even if they are US persons if they fall into a "local bank category" (98% of their business is local). This is designed to prevent discrimination against local account holders.

Ability to find US Accounts: There was concern in industry that there would be audits and that perfection would be required when it came to detecting US accounts. That, he said, is not the US' intention - all they expect are good procedures and processes. Errors will happen. It's OK that not all US accounts will always turn up. What they don't want to see are major systemic failures.

The final fifteen minutes were devoted to questions gathered during morning meetings and others submitted in advance by attendees. Here are two I thought were noteworthy:

The final regs seem to provide for more burden relief than the IGAs. Why?

Definitions are sometimes more generous in the final regulations. For example, new accounts treated as existing accounts in some cases.

Treasury takes the pont of view that if there is a more favorable definition in the final regulations then in the IGA, countries can choose to use the more favorable terms in the regs. Overall the final regs are a good interpretation of the IGA provisions and Ms. Rolfes said that they aren't really any conflicts. Nonetheless, between the regulations and the IGAs countries can "cherry pick" definitions provided they are not contrary to the intent of FATCA.

Question about the relationship between the IGAs and the existing tax treaties. the IGAs are built on the existing system of information exchange and double tax treaties. Can a country without these things still enter into an IGA?

Jesse Eggert said "yes.". Treasury prefers that they enter into an agreement first but if they can't, the IGA is a stand-alone agreement. Not possible to have reciprocity under such an agreement but local FI's will still be able to benefit.

So there you have it. One last comment. Only once in the entire 2.5 hours was any mention made of the impact on people (those pesky "US Persons"). Other than that, discrimination, access to basic banking services, privacy issues and so on were not discussed. Though it was a public meeting attendance was tightly controlled. When I asked the OECD contact if any other NGO's were going to be there, she replied, "Not to my knowledge." From what I could see, the overwhelming majority of the participants were industry and government representatives though I did see at least one journalist.

And that is a shame unless, of course, we limit the definition of "public" to mean bankers, tax policy makers, consulting companies and government bureaucrats. It is my own bias speaking here but I do think the discussion would have been greatly enhanced by the presence of more citizen advocacy groups. I would be very interested in knowing if any did apply and were turned away. If not, then all I can say is that they missed a great opportunity.

This blog has more notes from the conference and is worth a look.  Notes from the OECD Meeting - TRACE and FATCA.  Many thanks to Just Me for the link.

Wednesday, February 13, 2013

Ash Wednesday

Some of you may have heard that I got to spend some time yesterday in Elevated Company.  With the backing of American Citizens Abroad, the gentle urging of Professor Christians, and the help of a very nice person at the OECD I was able to attend a FATCA Briefing for government officials and business at the OECD Conference Center yesterday.  It went very well and was a fascinating look at the nuts and bolts of this legislation, the progress being made in implementation, and the relationships among the stakeholders who were present.  Interestingly enough when I arrived they told me I was exempt from the entry fee of 100 Euros because they deemed me to be a "journalist."  I was rather surprised by that but, hey, I wasn't about to argue with them.  Rest assured, I took lots of notes.  I am working on cleaning them up and when I'm done I will publish them.

But First Things First.  Today is Ash Wednesday, the beginning of Lent.  I went in to Paris to attend Mass with my mother-in-law at Sainte Odile in the 17th.  This is the church where I was married and where my Frenchlings were baptized.   The priest who blessed the ashes and presided over today's Mass was the same priest who officiated at my wedding back in 1990 - 23 years ago.

I'm back home in Versailles now with the ashes on my forehead falling into my eyes.  Tonight I will go to the Soeurs de Cenacle Center for an event called "Le Carême pour les Nuls" (Lent for Idiots).

Last year was a tough one but when I reflect on the sum of my life thus far I have a sense of wonder and gratitude.  I've had more fun and opportunities then I probably deserved and I'm at a loss to explain why.  I'm also painfully aware of the areas where I've come up short - "in what I have done and in what I have failed to do."  Lent is the time to pay special attention to these things.  It's not about cowering in fear and saying over and over what terrible terrible people we are - it is about appreciating all that we have been given, acknowledging that we are imperfect creatures in need of some help, and seeing clearly all the ways we could do better.

Coming face to face with one's own mortality just makes the exercise even more poignant this year.  Some days there is such urgency inside me to get on the right trajectory and stay there.  For as it was said today: "Remember that thou art dust, and to dust thou shalt return."

Monday, February 11, 2013

The Crab Canon on a Mobius Strip

Oh this is so cool that I just had to share.

Bach's Crab Canon on a Möbius Strip by Jos Leys.  Here is Open Culture's explanation of what you're seeing:
You can follow the score, note for note, and then watch as the piece reverses itself, running back across the staff in the other direction. So far, so easy, but another layer appears: Bach wrote the piece to then be played simultaneously backwards as well as forwards. But prepare yourself for the mind-blowing coup de grâce when Leys shows us at a stroke just what the impossible shape of the Möbius strip has to do with the form of this “crab canon,” meaning a canon made of two complementary, reversed musical lines. Hofstadter had a great deal of fun with that term in Gödel, Escher, Bach, but then, he has one of those brains — you’ll notice many Bach enthusiasts do — that explodes with connections, transpositions, and permutations, even in its unaltered state. Alternatively, if you consider yourself a consciousness-bending psychonaut, feel free get into your preferred frame of mind, watch Bach’s crab canon visualized, and call me in the morning.

Overseas Americans Week

As I type this three American citizen advocacy groups, ACA, AARO and FAWCO are in Washington, D.C., USA  for the annual Overseas American Week.

They will be meeting with members of Congress and U.S. agencies and departments to call attention to the concerns of the more than 6 million American citizens living outside the U.S.

Clearly tax issues will be a big part of their efforts: "OAW delegates will meet in particular with House Ways and Means Committee staffers that specifically deal with tax and banking problems for Americans living abroad."  Other issues are on the table as well:  Social Security, Medicare and citizenship.

I wish them well in the belly of the beast.

As I perused their websites, however, something began to bother me.  They are going to Washington to fight the good fight but what about the rest of us?  You know, the other 5.9999 million U.S. citizens abroad whose interests are being represented?  Not that we all want to go, mind you, (I personally hate that city with a passion), and Homeland Security would probably have a fit if millions of Americans abroad descended on Washington, but the whole thing kind of leaves the rest of us hanging.  Where is our role in all this?    Or are we supposed to sit on the sidelines, recite the chapelet of the Divine Mercy, and let others do the heavy lifting?

Only FAWCO has an answer.  A limited one.  They ask their members to "contact their legislators to ask them to co-sponsor HR 597 early in this new Congress."  This is the Commission on Americans Living Abroad Act.

I know and love all of these organizations so what I am about to say is meant to be constructive:  Sometimes you look a lot more like gatekeepers than leaders and mobilizers.  Is this really ideal?  We pay the dues and you do the work makes for a pretty passive membership.  There are people spending hours each day working on the issues you care about and need support for, but many are doing these things outside your organizations because they feel a desperate need to do more than write a check, read the newsletter, and send the occasional email to U.S. lawmakers.  A lot of energy out there and a lot of anger.  If people can't find a channel for those feelings with you, then they will look elsewhere.

This is a defining moment for the American diaspora.  We have burning issues that are bringing us together wherever we live and it's just too good an opportunity to squander.

So, what can we do together to make things happen?

Sunday, February 10, 2013

Snowing Again in Versailles

Global warming?


The snow started falling this morning as I walked to church and it was coming down hard when I left.  The ladies at church loaned me an umbrella and insisted that I take the bus home.

It wasn't sticking so I didn't worry and then about an hour ago the temperature dropped and I saw the white stuff piling up in the garden.  Here's a picture I took before the sun went completely down.

If you are in Paris area and were considering going out and out, I'd rethink that.  Stay home and stay safe.  On a day like today I cook comfort food.  Something from The Garlic Lover's Cookbook (1980 edition) from Gilroy, the Capital Garlic of the World sounds about right.

Saturday, February 9, 2013

The Diaspora Tax War of 2012-2013 - Flophouse Articles and Links

Did some tidying up today around the Flophouse.  Fixed a few broken links, checked the sofa for loose change,  shook out the rugs, and swept under the bed.

I also took the time to update the page The Diaspora Tax War of 2012-2013.  This page contains most of the posts I've written about FATCA/Citizenship-based Taxation over the past year or so here and at Isaac Brock.  Have a look - there just might be an post there that might help you get oriented if you are just joining the conversation.

At the very end it also has a list of sites I recommend if you want to follow the action a little more closely.  I updated it to include some new sites that I really like:  Maple Sandbox  Tax, Society and Culture, and Repeal FATCA.

Enjoy and have a great weekend, everyone.

Friday, February 8, 2013

Other Ways of Looking at Integration

In all the countries I've lived in there is an on-going discussion about the migrants and their integration into the host country.  It's a hard discussion to have because "integration" is a very broad term and a moving target.  When a native argues that the migrants must conform (or at least give lip service to) to his values that begs the question of which ones?  All of them or just the ones that particular native at that point in time thinks are important?  People change their minds (and their values) all the time.   Societies are not static.

Saying that migrants should act like natives, talk like natives, and share their values is a nice general principle but often breaks down in practice.  When a society is at war with itself over certain issues, migrants are left not knowing which foot to dance on.  

Take something like the "Mariage pour tous" in France (know as Gay Marriage in the U.S.)  So what do the natives think about this?  Well, some are saying that this is going to literally change French civilization for the worse and that nothing less than the French Family, the composition of which is a strong part of traditional French culture, is at stake here.  Talk to others and they'll tell you that this about equality, fairness and the separation of Church and State and that it is against the values of the French Republic to not allow gays full marriage rights.

However a particular migrant comes down on this issue, when talking about it with the natives one must summon all one's powers of diplomacy so as not to offend.  Why?  Well, if the native in front of you disagrees with you he's very likely to tell you, "Well you're American/Algerian/Brit/German and we don't care what you think, you immigrant.  And if you don't like our values, you should go home."  Of course, there is a completely different reaction if you agree.   Then they congratulate you on how well you've integrated because you clearly understand "true" French values.  It makes for an interesting conversational dance.

So when natives talk about values, all I can say is that the day you all agree on what French values you truly share, send me the memo.

As for behavior, may I gently suggest that people need to be very careful what they ask for because they just might get it.  There are circumstances where clearly the natives do not want immigrants to act like them.  In fact the whole reason that many got in the first place is because they offer something the host society wants and needs.

A good example of this would be a highly qualified migrant from a very entrepreneurial culture with a strong work ethic and a high level of educational achievement for himself and high expectations for his children.

Do they really want this person to act like a native?  Let's say he decides to not start a business and be a taxi driver or a public intellectual instead.  Or he decides to go on unemployment or disability because he sees that an awful lot of the natives are on it.  If he qualifies, why shouldn't he?  He may have a STEM diploma (Science, Technology, Engineering, and Mathematics) but since the natives don't get those degrees in high numbers, he might as well go with the flow and encourage his kids to do something else.

Hard to see how anyone could complain about this since the migrant is simply conforming to the behavior he sees on the part of the natives.  He's not doing anything different.  In fact he's made a decision to be just like them.  Can we say then in that case that he is "well integrated?"  Or would everyone be much happier if he held onto the values and behavior that he brought from his native land?

Migrants can't fix what ails a society.  If a society cannot produce a sufficient number of people who know how to do X and are willing to do it, then that's not a problem with immigration, it's an internal problem.  Where natives use social welfare networks, can't balance their national budgets, and then refuse to have enough children to keep it going, that's solely within the power of the native population to change.  It's a bit cheeky to say to the recent arrivals, "Integrate or else" but "Do as we say, not as we do."  And it's a really unfair to ask immigrants to take sides in the "culture wars" and then get angry with them when they give an answer the natives don't like.

What migrants can do is to add their human talent to the pool and offer a different perspective that might further the debate.  I'd even argue that everyone has an interest in considering some of the values migrants bring from their homelands like, for example,  a strong sense of family or deep respect for elderly people.  The French might be really surprised to know that these two things are deeply held values that some North Africans and Japanese find a bit lacking here in France compared to where they came from.  Might be worth having a conversation with them to know why they feel that way and why they don't want to integrate a French interpretation of those values into their worldview.

Just a few things to think about from where I sit.

Time for coffee.  Have a good day, everyone.

Thursday, February 7, 2013

The True Cost of Healthcare in the U.S.

Ask a simple question and sometimes the universe smiles at you and hands you a really good answer.

In a previous post I talked about a trip my younger Frenchling and I made to the Emergency room here in Versailles.  I compared it to a trip to Emergency I made in Seattle when I was on vacation.  The latter was 10 times the price of the former and so I said:

"I have a very hard time understanding how two private hospitals in two developed countries could have such radically different pricing models."

Shadow Raider shot back with a great link that answers my indirect question. The site is called The True Cost of Healthcare and the blog author is David Belk, an American doctor.  He looked into it and what he found just blew my mind.  The system is completely distorted - the bills bear no relation to reality and that's on purpose.

I really recommend the site.  His full report is here but you can also go to the main page and watch his short videos on such things as the true cost of prescription medication, malpractice insurance, hospital stays, office visits and diagnostic tests.  Here's one to whet your appetite.  Watch it and weep for Americans who have to live with this system. 

Wednesday, February 6, 2013

Exile the American Way

Definition of exile:
Noun-The state of being barred from one’s native country, typically for political or punitive reasons.  A person who lives away from their native country, either from choice or compulsion
Verb- Expel and bar (someone) from their native country, typically for political or punitive reasons
Origin - Middle English: the noun partly from Old French exil 'banishment' and partly from Old French exile 'banished person'; the verb from Old French exiler; all based on Latin exilium 'banishment', from exul 'banished person'

Oxford On-line English Dictionary
In the debate over citizenship-based taxation there are two benefits or services that are often cited by homeland Americans as justification for imposing taxes on the American diaspora:  Protection and the right to return.  They argue that a U.S. citizen wherever he or she lives benefits from the protection of the American government and has the right to return to the U.S. to live and work anytime he or she wishes.  Surely, they say, a contribution to the national treasury is due from those who stand to benefit from these things even if they aren't using them right this very minute.

That's a very powerful argument but it's worth a closer look to see if it corresponds to reality. Is it really true that Americans circulating outside the U.S. are under the full protection of the U.S. government?  Do Americans who go abroad always have the right to return to the U.S. provided they have not renounced or relinquished their citizenship?

Most Americans would say "yes" and that these are two of the most important benefits of American citizenship:  the protection of a powerful state with a Leviathan military force (over 1 million people serving) and a presence (bases and embassies) all over the world; and the right to come home, something enshrined in international law that says a person always has the right to return to a state of which he or she is a citizen.

However between the theory (and how Americans in the homeland think it works) and the reality on the ground that Americans abroad live every day, the picture is much more complex.

Protection is a very vague term.  What does it really mean?  It can mean "consular protection."  There is an international convention that the U.S. and most other countries have signed called the Vienna Convention on Consular Relations.   Like citizens of other countries living in the U.S., Americans have the right to contact the local U.S. Embassy if they get into trouble outside the U.S.  If the American is in jail, embassy personnel can come visit and make sure that person is being treated properly.

That's about it.  An American passport does not give an American a "Get out of jail free card."  If an American is accused of a crime in another country (even unjustly) there isn't a lot the U.S. can do about it and for the most part they don't.  The case has to go through local law enforcement and local courts.  The U.S. Embassy can help with English-speaking lawyers and moral support but in most cases their power is pretty limited.  That is not anyone's fault, it's just the way it works.  Yes, in some extreme circumstances like the hikers who were jailed in Iran, the U.S. can pressure the country through diplomatic channels.  Please note that it still took quite a while for those hikers to be released - they languished in jail for many months before they were finally freed.

The situation is even more bleak for a dual citizen.  If that American citizen is in another state of nationality then the U.S. doesn't really have the right to intervene - the situation is strictly between that citizen and that state.   But remember that citizenship status is not up to the individual, it is something decided by each state.  It is entirely conceivable that a U.S. citizen traveling to another country may be pronounced a citizen of that country against his will and treated as such.  That person can protest all he likes but again there is not much the U.S. can do about it.

Another form of protection is evacuation services in the event there is a natural disaster or a political problem in a country outside the U.S.  This is something the U.S. will indeed do but many Americans are very surprised to learn that it's not free.  It's a service the evacuees must pay for - it's not included in the U.S. citizenship "package."  Here is how the U.S. State Department views this service:
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. 
What about other services that might fall under "protection" or perhaps we could call it "general assistance"?  I spoke to a friend of mine from Morocco and he said that his embassy has a wide variety of services for Moroccans in France which included help living in France (navigating the French social security and legal systems, for example).  I could not verify this information but I was struck by what I did find on their embassy website:
Dans le cadre de la Politique de Proximité voulue par Sa Majesté le Roi, et de l'attention particulière portée par le Maroc à ses ressortissants établis à l'étranger, les Consulats marocains veillent à répondre aux besoins et aspirations des 3 millions de MRE de par le monde.
(In the framework of the Proximity Policy desired by His Majesty the King, and of the particular attention Morocco has for its citizens abroad, the Moroccan Consulates are there to respond to the needs and the aspirations of the 3 million MRE in the world.)
I don't know how that works in practice (though my friend seemed very pleased by what he has experienced as a Moroccan citizen here) but this goes above and beyond consular protection or other basic services.  It is a statement that Morocco is keenly interested in the well-being of its citizen living in other countries and will invest time and energy into making sure their current needs, wishes and aspirations are being met in the host country.  

No such commitment is forthcoming (to my knowledge and please feel free to correct me if I'm wrong) from the American government or the American embassies to Americans living outside the U.S.  There are what are called "Citizen Services" and they are pretty basic: passports, emergency services, travel information, reporting the birth of an American citizen abroad, some limited help with taxes and so on.  Most of these are not free - there are fees for these services and they are not cheap.  The Paris Embassy website also has PDF's that can be downloaded answering some basic question about life in France.  

To be fair, is that really the whole story?  Is that really all they will do for you if you need something non-standard?  Not necessarily.  I had an email exchange with a former State Department employee about this and he told me that assistance and protection to Americans abroad really depends on the country that U.S. citizen lives in and who he or she talks to when consulting the local embassy.  The defined services may be basic but embassy personnel can and do go beyond their strict duty to help Americans abroad.  I can also attest to the fact that embassy personnel in Paris and Tokyo are really nice people and I've never had a bad experience in either place.  But it all depends on who you talk to and where you are, said my informant.  There is no explicit commitment anywhere that says that U.S. government is concerned about its citizens abroad and is watching over us and our interests and aspirations in our host countries.

On the contrary many American abroad right now have the sense that the U.S. government is actively working against the interests of her citizens abroad.  There are the unintended consequences of FATCA which is turning us into banking pariahs all over the world.  There is the enforcement of citizenship-based taxation, the application of old reporting rules and the IRS amnesty programs where even those who have lived and worked outside the U.S. for years and were unknowingly non-compliant and who want to make it right are treated in the same manner as those who willfully slipped their money out of the U.S. and parked it in Switzerland to evade taxation.  

And for the cerise sur le gâteau (cherry on the cake) there is the Obama administration's relentless insistence on its right to execute Americans abroad without due process if they decide that an American is a threat to the US.   To be really clear about this, it means that the American president gets to decide whether I or any other American abroad can be killed at will.  The counter-argument, of course, is that this only applies to terrorists who are an imminent threat to the U.S.  I'm 99% sure that this is true but there is 1% of me that says, "Well, how does the decision-making process work here?" and "What if they make a mistake?"  Fundamentally the life of an American abroad hinges on the American government getting it right.  Mistakes will be made.  These people aren't God - they are fallible human beings who are going to screw up. And that's really frightening.

All this is leading to something that feels a lot like exile to many of us - a sense that we are being hunted down, forced to make terrible choices (between family and citizenship, for example) and that our own country sees us as nothing more than a source of tax revenue (best case) or suspected criminals and terrorists to be fined, jailed or annihilated (worst case).

That is what American "protection" looks like to those of us who live outside the United States.  It is vitally important for homeland Americans to understand this perspective because when they say that we should pay for the protection of the United States of America, they are asking us to pay for something we can't see and don't feel.

As for the right of return, that has become more qualified in a post-911 era.  In Article 13 of the Universal Declaration of Human Rights (UDHR) it says,  "Everyone has the right to leave any country, including his own, and to return to his country. "  When is that not true for American citizens?  When that American citizen is put on one of those infamous No-Fly lists.  Al-Jazeera has an article about this with a rather provocative title:   Exile the Obama Way.  (Hat tip to Jordan who passed along the link.)  The article has this shocker:  "over the past decade there have been countless documented cases of individuals who have suddenly found themselves permanently stranded abroad after being banned from the United States despite holding legal residency and/or citizenship in the country."

They go on to say that last year alone the number of people on the No-Fly list has doubled to around 10,000 of whom 500 have been clearly identified as U.S. citizens.  The main target is mostly people from Moslem countries or those whose parent or grand-parents came from these countries.  That alone is really disturbing.  It is not however confined to that population and anyone could conceivably end up on one of these lists.  Al Jazeera cites the case of Steve Washburn, U.S. military veteran born and raised in New Mexico who was stranded in Dublin.   Some others who were banned from returning  home to the U.S. and are being represented by the ACLU (American Civil Liberties Union):   Ayman Latif, a U.S. citizen, former Marine and disabled veteran who was stuck in Egypt;  and Raymond Earl Knaeble, a U.S. citizen  and veteran of the U.S. Army who was stuck in Colombia.  What an outstanding way to say, "Thank you for your service" to the nation.  

The ACLU lawsuit is still winding its way through the U.S. courts (update here).  In some cases the U.S. government said "Oops!" and let them come home.  In others, people are still stranded.  

How did these people get put on these lists?  No one really knows because how it works is a secret. "The names of those on these lists are not disclosed and neither is the reasoning or evidence as to why any particular individual may be flagged." A U.S. citizen abroad will only find out that he or she is on such a list when he shows up at the airport and is told that he can't fly and has been barred from entry into the U.S.  Bad enough if these happens to a citizen on U.S. soil, just imagine trying to fight this  from abroad.   

In addition to the No-Fly lists there have been other avenues the U.S. government has explored to negate that right to return -  tying the issuance of a U.S. passport (required for re-entry into the U.S.) to payment of taxes, for example.  This site says that an American citizen can also be denied a passport anytime anywhere for the following reasons: "owing more than $2,500 in back child support, for being under investigation, for having been found to be a drug trafficker, or considered a threat to national security."  

So the U.S. government can and does make decisions about whether or not a citizen abroad has the right to return to the U.S.   Granted they don't deny it often or to large numbers of people but the possibility is there.  It happens.  That means that for all those citizens abroad who are holding on to their U.S. passports just in case they would like to go home one day, the reality is that maybe they can and maybe they can't.  And I just have to ask:  If a citizen is effectively exiled (prevented from returning to the U.S.)  does he still have to file a 1040 and report his foreign bank accounts?

So the argument that Americans abroad should pay taxes in order to maintain their right to return to the U.S. gets weak when faced with these facts.  An American citizen abroad could faithfully file and pay her taxes for years and still not get to come home.  It's no guarantee.  It is worth repeating:  the U.S. citizenship "package" does not include an unconditional right to return to the U.S. to live and work.   It is contingent on "good behaviour" (whatever the hell that means and there is a very broad spectrum of activities that will get you in trouble) and, sadly enough, pure dumb blind luck.

That's my answer to those who use the "benefits" argument and say that American citizens should pay taxes above and beyond what they already pay in their countries of residence outside the U.S.  

It is why we who are considering renouncing smile sadly at the homelanders when we hear the words "protection" and "right of return."

Tuesday, February 5, 2013

FATCA Comes Home

The FATCA cat is truly out of the bag now.

For those just joining the conversation FATCA (Foreign Account Taxation Compliance Act) is a law that was voted in 2010 by the U.S. Congress as part of the HIRE Act. It requires 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.  The legislation is "extra-territorial" which means that the U.S. is imposing American law on the people of other countries.  If one give it a moment's thought, it might occur to a few that this is probably not a good idea and it begs the question:  If Americans can extend the reach of their laws beyond its borders, what's to prevent other countries from doing the same thing?  How would Americans feels if they had to comply on U.S. soil with a law voted in the French National Assembly?

In addition to the blatant affront to national sovereignty, this law is spawning all kinds of unintended consequences.  U.S. Persons (citizens and Green Card holders) outside the U.S. and anyone with a U.S. connection (a child at a U.S. university for example) are starting to find it very difficult to do basic banking in their countries of residence.  Banks are businesses and when they see a customer who is going to cost them money, their reaction is to "fire the customer."  Entrepreneurs are finding it harder to form ventures in other countries since the foreign partners see no reason to subject themselves to the bureaucracy of the U.S. tax authority just because they have included U.S. citizens as partners.

These are serious consequences but they are not getting much attention in the U.S.  The media has done a terrible job of reporting on this and most articles in the American mainstream media are riddled with factual errors.  The "frame" around the law is that this is a necessary evil to catch tax evaders and most folks don't look beyond that, nor do they particularly care about the sorrows and hard times of expatriates (emigrants) and immigrants.  It's not their ox being gored, so to speak, and migrants, wherever they are from, are not the most popular group around.

So what would it take to get Americans to sit up and pay attention to FATCA?

Well, here's a brilliant idea coming from the rest of the world in response to the U.S.:  Reciprocity.

What other countries are saying is simply this:  If the U.S. wants us to report on U.S. customers in our countries then we want U.S. banks to report to us about account holders from our country.  The UK, Mexico, France, Germany and others want something for their trouble - information about their citizens in the U.S. in exchange.  When you consider that the U.S. is a country of immigration this has all sorts of interesting implications.  It is estimated that there are around 1 million Americans in Mexico. Pew says there are nearly 13 million Mexicans in the US.  That means that under a full reciprocity agreement there will potentially be a lot more information flowing south as opposed to north.

The volume is unbalanced but the underlying principle seems fair to me.  However, when the possibility of this sort of mutual information exchange was raised back in July of 2012 it raised a perfect storm of protest in the United States.  The same politicians who voted for FATCA suddenly find that they didn't like the idea one bit if it meant an impact on U.S. banks.

Here we are in February of 2013 and reciprocity is baaaaccccck.  Check out this excellent Reuters' article (link passed along by Just Me),   Exclusive: Foreigners' accounts in U.S. banks eyed in tax crackdown.

Seems that some countries are hard negotiators (France and Germany are cited in the article) and they want the full meal deal before they sign an inter-governmental agreement with the U.S. (called an IGA) to implement FATCA.    The problem is that there is nothing in U.S. domestic law that would require U.S. banks to give out any information to a foreign government beyond interest payments.

Nothing that can't be fixed, right?    According to the article that is exactly what the Obama administration plans to do:  introduce domestic legislation that would require  U.S. banks to do what it already promised in some of the country agreements "to pursue equivalent levels of reciprocal automatic exchange in the future. "  Sounds like the future is right here, right now.

What does this mean?  It means that Americans will no longer be able to ignore FATCA as something that's happening "out there" in the world and is of little concern to the average American.  The Obama administration will have to publicly introduce legislation for full information reciprocity with foreign governments, fight for it in Congress, and make a case to the American people for why this is a good idea.  Oh, what a difference it makes when it's no longer OPM (other people's money).  Last time I looked average Americans have bank accounts and of course the costs of implementing these information exchanges with other countries will be borne by the U.S. consumer.  It's fantasy land to think otherwise.

Hard to see though how the Obama administration could possibly do anything else unless they give up on FATCA entirely.  Without the cooperation of other countries, FATCA is a toothless law.  I agree with James Jatras that this is "the worst law most Americans have never heard of" but if it's going to happen then it is right and just that the pain be shared by all parties, Americans and non-Americans alike.

Time to put your money where your mouth is, homeland Americans.  You want information about overseas accounts to chase down your "evil tax evaders" then you need to understand that there is a price tag associated with that and that regular people are going to have to pay it for FATCA to be a success.  If you think that money out of your pocket is an unreasonable request in this grand scheme to fight tax evasion but you still consider FATCA a splendid idea for the citizens and banks of other countries then you are the worst sort of hypocrite.

Monday, February 4, 2013

Voting Rights for Foreigners in France

Over the weekend I was asked to sign a petition against some "projet de loi" that the Socialists have cooking.  I did not sign it.  Why?  As I explained to the nice Frenchman before me, the petition called on all citizens to fight this project.  I am not a citizen, I said, and so I don't feel comfortable putting my name down.  That's alright, he replied, if you are a resident it should be fine.  I can't vote here, I answered, and the petition is addressed to the representatives of those who can.  And don't the French take a dim view of non-citizen foreigners meddling in their internal politics?  He wasn't very happy with me and I wasn't too pleased by the exchange either.

When it comes to political action in one's host country the lines are not clear.  It's not just petitions, it's also rallies (manifestations), letters to elected officials and contributions for various causes.  The citizen seeking support for his cause will suspend his general belief that foreigners should mind their own business (or become citizens) in order to get another name down.  The non-citizen on the other hand has to think about the ramifications of doing that sort of thing:  Is this going to provoke the natives?  Will it offend someone?  Someone with the power to make one's life a little more difficult especially when renewing one's residency permit?

Is this paranoia or prudence?  A little of both.  The Socialists have another project that would give foreigners the right to vote in France.   This has elicited some very strong reactions the most extreme coming from Christian Estrosi, a UMP representative and the mayor of Nice.

"Et c'est ce qui me révolte le plus. Pourquoi ? Parce que donner le droit de vote à des personnes qui haïssent la France, qui détestent la laïcité, qui refusent nos lois...
(And that's what disgusts me the most.  Why?  Because giving the right to vote to the people who hate France, who hate the separation of church and state, who refuse our laws...)

He later clarified on Twitter: "Donner systématiquement le droit de vote aux étrangers et même à ceux qui peuvent haïr la France, c'est une véritable folie." Si un étranger "veut voter dans notre pays, il lui suffit de demander la nationalité française." (To systematically give the right to vote to foreigners and even to those who might hate France, that's pure folly.  If a foreigner wants to vote in our country, he needs to ask for French nationality.)

Needless to say as someone who has lived for many years in France and who has probably more love and loyalty to her than to my country of origin at this point, his words were a shot to the heart.  It wasn't what he said.  In fact I have a certain sympathy for his position - there is real merit to the argument that voting is and should remain a privilege of citizens.  The tone, however, was very discouraging.  All the more so since (and this may surprise Mr. Etrosi) a quick read of his website reveals that where he sits on the political spectrum in this country is probably where I would end up and vote if I had the right to do so. For those who think that giving foreigners the vote means that we will always vote for the Socialists, I think you gravely underestimate how diverse we are.

I would also like to point out that it's not that easy to become a French citizen these days even if one has been married for 23 years to a French citizen.  Last time I tried I was stymied because after months of gathering the necessary paperasse, I wasn't able to get one piece of paper translated in time.  Shortly after that I was diagnosed with cancer and that was the end of that until I finished my treatment.  Now I understand that the rules and procedures may change once again which means another trip to the Prefecture, perhaps other papers to acquire, and then a wait and maybe an interview or a test.  It's a bit daunting.  And from the conversations I've had with my friends, folks from church and family members, most are genuinely surprised that it's not easier.  We all seem to be in agreement - I want to be French and they want me to be French.  Surely it can't be that hard, they say.  Well, it is what it is and it is not within my power to change.

In the meantime, terribly conscious of my non-citizen status, doubtful of my moral right to participate, and fearful of the reactions of the natives, I prefer to bow out of the internal political arena.  And I would argue that this is not good for anyone.  Integration is not just obeying the laws or speaking the language - it's also about having a stake in the society in which one lives and being a full participant on all levels:  political, economic, cultural and social.  I find it terribly ironic that I can participate in the political life of my home country more easily than I can in the place where I live, work, own a house, and have raised a family.

That is not an argument by the way for giving me or any other foreigner the right to vote.  If the French decide to do so it would be a gracious and generous gesture but I wouldn't blame them nor would it hurt my feelings if the collective conscience of this country said "no."

What I am saying is that if you create a world where full participation in society (full integration) is contingent upon acquiring citizenship and then you make laws and procedures and create an atmosphere where such naturalizations are subtly discouraged, then you drive us to despair.  And at that point the only place we have to fall back to is where we came from.  Think about it.

Saturday, February 2, 2013

Chez les Franciscaines

In Versailles when your doctor says he is sending you "chez les Franciscaines" he isn't talking about your spiritual well-being.  He means that you are sick enough to warrant a trip to Emergency (Urgences) and the nearest one in my part of town is the local private (not public) hospital and its official name is  L’Hôpital Privé de Versailles (The Private Hospital of Versailles).  However, I have never ever heard anyone refer to it as anything other than "les Franciscaines.

The Franciscans are a Catholic religious order founded in the 13th century that follow the teachings of St. Francis of Assisi.  Under the name there are actually several sub-orders and I've never been able to get them straight (Friars Minor, Poor Clares and so on).   Sean Connery played a Franciscan monk, friar William of Baskerville, in the film based on the book by Umberto Eco, The Name of the Rose.

This private hospital had its origins in the 19th century.  It was founded by Franciscan Sisters in 1882 and was simply called "La clinique des Franciscaines."    Today it is owned by an Australian healthcare company called Ramsay Healthcare (Ramsay Santé). The Sisters (Notre Charisme de Franciscaines Missionnaires de Notre-Dame) still maintain a presence at the hospital though the Church no longer runs it.

We ended up "chez les Franciscaines" late Friday morning.  My younger Frenchling had stomach pains that look an awful lot like appendicitis to our family doctor.  So he scribbled off a note that began with "Chers amis" (Dear Friends), called us a taxi, and sent us off to the Emergency.  And if that's not enough to make you think he's a prince among men, would you believe he makes house calls too?

We arrived around 11 AM and before we know it we had a room, my daughter had a drip in and we were off to get a scan (echographie).  That and the blood test revealed nothing wrong and we were let go with a prescription for various medications that will relieve her symptoms.  The medical team was incredibly efficient - the only inefficiency we encountered was entirely my fault.  When we walked in I was so stressed that I didn't see the little bell I was supposed to ring to let them know we were there.  Happily a nurse saw us sitting there and came over to ask.

We've been very lucky in that our family has not had much need of local emergency services in our five years here in Versailles.  Last time I was in Emergency was in the U.S.  I was on vacation and had severe back pain and I ended up at Swedish in Ballard in Seattle.  Great service there too and it had the same happy ending - they let me go after a scan.

The biggest difference between the two experiences?  The price tag.  As I recall my little adventure at Swedish cost a little under 1000 USD.  Let's compare that to L’Hôpital Privé:

70.00 Euros for the scan
27.09 Euros for Emergency
23.00 euros for the doctor

That is a little over 100 Euros and when we checked out I was asked to pay a grand total of....

10.02 Euros.

The rest of the bill was entirely covered under French social security and we will even be getting back our ten Euros when we make a claim to our private insurance (mutuelle).

We can argue the pros and cons of how healthcare is paid for in the U.S. versus France (and frankly I think the latter's system is far superior and Obamacare isn't going to come even close to being this good) but I have a very hard time understanding how two private hospitals in two developed countries could have such radically different pricing models.  To be very clear, the level of care was great in both places, the equipment was state-of-the-art in both places, the teams were professional and efficient in both places.

But for some reason it cost 10 times as much to deliver essentially the same care, the same private sector service, in the U.S.

I just have to ask the obvious question:  Where is the much touted American efficiency, business sense and superiority of the private sector over the public in this picture?  

 Bill Maher annoyed people in the U.S. when he said "France has a better healthcare system than we do and we should steal it."  I'm not entirely sure that is true if all you are comparing is quality of care.  What is at issue here is quality care delivered at a reasonable price with the least amount of wasteful bureaucracy.  In that respect  I think the Americans have a thing or two to learn from those "damn French Socialists."