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Wednesday, November 13, 2013

CBC The Current Exposes How FATCA will Affect Canadians

Brilliant interviews by Anna Maria Tremonti:  Allison Christians of McGill School of Law, Ruth Freeborn, a former US/Canadian dual citizen who has renounced her American citizenship, and Marion Wrobel of the Canadian Banking Association.

The show is called FATCA under fire from tax experts & Canadian citizens and it explains very clearly how detrimental this American law is going to be.  Ms. Tremonti focuses on Canadians but everything said on the show applies to every other country in the world.  This is what FATCA means for ordinary people.

And for the French citizens reading the Flophouse today, let me say that we all have a lot to worry about here, because your nation (my host country) will be signing up (or to put it another way, bowing to the realities of American power) for something that about everyone in the world outside the United States thinks is a misguided, poorly-crafted, extra-territorial piece of legislation tomorrow.


P. Moore said...

Thanks for posting this. I listened and found it quite interesting. The bankers see it as a 'risk management' and cost issue, while the others see it as a matter of their rights. I suppose that is expected. In any event, it will be interesting to watch this unfold in Canada. Canada could possibly turn out to be the most interesting FATCA battlefield on earth.

Victoria FERAUGE said...

Oh yeah, the play of interests around this is fascinating. All the more because states have gone to some trouble to keep citizens out of the loop.

OAP said...

We 'US Persons' in the UK offer our commiserations to you in France on the signing of the French/US IGA. Welcome to the steamrolled.

The Brockers and Sandboxers in Canada will never know how envious we are of their ability to at least be heard by their local media and government. They can not know how strongly we are cheering them on from the side lines.

Christophe said...

For those interested, here is the full text of the agreement:

Don't have much time to go through it now and highlight points. Sorry.

Have a good weekend.

Christophe said...

Here are the points that caught my attention. But I am sure you'll write something about it soon, and provide a much better analysis than mine.

- Under information to be obtained and exchanged
“the total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the Reporting French Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder;”

They want to know if you sold your house and how much you sold it for.
Note that from the US to France, France is only interested about interests and dividends.

“Suspension of Rules Relating to Recalcitrant Accounts. The United States shall not require a Reporting French Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to close such account, if the U.S. Competent Authority receives the information set forth in subparagraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of this Agreement, with respect to such account.”

I don’t quite understand this one. Recalcitrant accounts are accounts where the holder does not authorize the transfer. In that case, the bank will not withdraw the 30%, but the bank will not close the account if the info is transferred. But it will not if the account is recalcitrant. Meaning that if the US does not receive the info, then the account will be closed?

“the United States shall not be obligated to begin exchanging information prior to the date by which France is required to begin exchanging information.”
“Reciprocity. The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with France. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with France by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.”

They’re basically agreeing that the US does not have to reciprocate. The French are NUTS!!!!

Non Compliance.
“If, in the case of a Reporting French Financial Institution, such enforcement actions do not resolve the non-compliance within a period of 18 months after notification of significant non-compliance is first provided, the United States shall treat the Reporting French Financial Institution as a Nonparticipating Financial Institution.”

Then there is a whole section on how they determine US indicia and which accounts to report.
Note that there is NOTHING about how the data will be secured. Nothing about the transfer of data being applicable to residents or non-residents.