Victoria Ferauge, who writes extensively about FATCA and its impact on US expatriates, provides an update on the lawsuit against the Government of Canada’s implementation of FATCA by the Alliance for the Defense of Canadian Sovereignty (ADCS):
The Foreign Account Tax Compliance Act is, in its own weird way, a kind of census. Among other things, it tells the American government where those it considers to be taxable under US law live and work and raise families.
Having tried and failed miserably at conducting an accurate census of Americans abroad, the American government looked for other ways to find those “US Persons” (a term that includes US residents and Green Card holders, as well as US citizens). Their method was delegation – an admission of failure in a sense – because FATCA requires foreign financial institutions (FFIs) to do what the US government couldn’t manage to accomplish on its own: to seek out all US persons in the world: their names, addresses, and account balances.
Those of you who have already been FATCAed, know all too well what that means. Those of you who have not yet signed a W-9 or had your accounts closed, please don’t feel left out, your time will come.
Americans abroad organizations like AARO, ACA, Democrats abroad and Republicans Overseas are fighting FATCA and you can read about their efforts here.
But I would be remiss if I did not mention other efforts which are equally important. The one I have been following (and cheering on) is the other lawsuit filed in Canada by the Alliance for the Defense of Canadian Sovereignty (ADCS).
This is a grassroots initiative that pushes back against FATCA in Canada. ADCS argues that the Canadian legislation that implements the FATCA intergovernmental agreement with the United States “violates the Canadian Constitution, Canada’s Charter of Rights and Freedoms, the principles of Canadian sovereignty and democracy, and the fundamental rights of all Canadians.”
By signing an agreement to turn over the private information of Canadian citizens to a foreign government (the United States) the Canadian government is violating, they say, the rights of those whom the US is unilaterally claiming as taxable US Persons, but who consider themselves to be Canadians first and foremost. They reject utterly the idea that another country can simply demand that Canada provide the private information of individuals who have some connection to the United States, however nebulous it may be.
The plaintiffs in the case are two Canadian women “who have never held a U.S. passport or developed any meaningful relationship with the U.S.” but who are, nonetheless, considered to be US citizens by virtue of being born in the US.” They never consented to that citizenship and see no reason why it should be foisted on them now just because the US says so.
There are citizens in just about every country in the world right now who are in exactly the same position as the two plaintiffs: people who thought they were “just French” living in France or “just Thai ” living in Thailand. Many are finding out that they are indeed US Persons when they receive a note from their local banks informing them that they appear to be US citizens under US law.
I could not think of a worse way (or a worse source) for someone to learn that he or she might be a US citizen. I find this not just shameful on the part of the US, but an extreme and worrisome delegation of sovereign power. Foreign financial institutions should not be in any way arbiters of US citizenship or status, or be tasked with implementing a US extraterritorial national census of any sort for any purpose whatsoever.
Among the different fronts against FATCA, this is a very worthy effort because it asks a nation-state like Canada to take a stand: Are these people claimed by the US really Canadian citizens with all the right enumerated in the Charter? Or has the Canadian government downgraded them to semi-citizenship status based on the claims of a foreign power?
Funded entirely by small donors, ADCS has miraculously raised enough money so far to hire very competent legal counsel, and on August 14, 2014 they filed their suit in Canadian Federal Court. I back them 100% and have contributed even though I am not an “Accidental American” or even a dual.