EU lawmakers approve resolution backing European ‘accidental Americans’

Meeting in Strasbourg, the European Parliament unanimously approved a resolution supporting their cause, by a resounding 470 votes to 43, with 26 abstentions.

Last Wednesday’s vote was brought before the European Parliament by Sweden’s Cecilia Wikstrôm, on behalf of the E.U. body’s petitions committee. Among other things the resolution calls on EU member states as well as the European Commission to re-open negotiations with the U.S. over its so-called Foreign Account Tax Compliance Act (FATCA).

The “accidental Americans” – as they insist on calling themselves, as opposed to “expatriate Americans” – argue that they should be permitted to let go of what the U.S. regards as their American citizenship without having to pay the current renunciation fee of $2,350 (recently raised from $450), along with various other, financially onerous, requirements.

They say that they should be allowed to be free of the burden of U.S. citizenship because they have lived most of their lives outside the U.S., typically don’t even speak English, haven’t returned to the country since they were born there, and otherwise are about as un-American as anyone could be.

The accidentals define themselves as “individuals who, by accident of birth, inherited U.S. citizenship but have subsequently maintained no ties to the country, having never lived, worked or studied there, and [consequently] do not hold U.S. Social Security numbers.”

FATCA was a 2010 piece of U.S. legislation that, the Europe-based accidental Americans and other U.S. expat groups say, has been a cause of significant hardship and expense for them over the past eight years, and which the Europe-based accidentals say violates “fundamental rights” that they, as E.U. citizens, are entitled to.

Conceived in the wake of a number of high-profile exposes of tax evasion by Americans who had been using overseas bank accounts and other financial structures to hide their wealth and income, it enables the U.S. to enforce its unique brand of “citizenship-based taxation”, as opposed to the residence-based tax regime used by most other countries.

It does this by obliging non-U.S. financial services companies to report to the IRS on the assets held by their American clients, under “intergovernmental agreements” (IGAs) agreed between the U.S. and governments around the world – including those in the E.U. that are currently in the crosshairs of the European Accidental Americans’ campaign.

‘Initiate negotiations now’

Wednesday’s vote in favour of the European Parliament resolution – which may be viewed and downloaded from the E.U.’s website here – comes at a time when the European Union is already standing up to the US over US President Donald Trump’s decision to levy stiff tariffs on some of its imports, in the form of retaliatory tariffs on certain US goods, including bourbon, orange juice and motorcycles.

The vote was enthusiastically welcomed by Fabien Lehagre, 33, an “accidental” who has been leading an increasingly visible, France-based campaign to rally French and EU support for others like him via an organization he founded in 2015, known as l’Association des Américains Accidentels (Accidental Americans Association, or AAA). The organization currently represents some 580 members.

Lehagre’s efforts have shone a spotlight on the accidentals’ plight, particularly in France, over the last 12 months.

“We are calling on the European Commission to immediately initiate negotiations with the United States on this matter,” Lehagre said on Thursday.

“Not only throughout France and Europe but across the world, people who’ve lived their entire lives in countries other than the U.S. are being targeted by the U.S., which claims they owe it money on the basis of their supposed American citizenship.”

Other organizations that have sprung up recently across Europe to fight the taxation by the U.S. of “accidental Americans”, in some cases apparently in the wake of the growing visibility of Lehagre’s organization, include the Italiano Accidental Americans; U.K. Accidental Americans; Collectif Belge Pour la Défense des Américains Accidentels; Irish Accidental Americans; and Deutsche in Amerikanischen Steuerschlamassel, which also calls itself What the FATCA.

Most seem to use Facebook as their base of operations as well as their main means of disseminating news and soliciting new members.

Unknown numbers of U.S. expats

Although even the U.S. government admits to not knowing exactly how many Americans live outside of the U.S., the latest estimates have been in the neighbourhood of 9 million – significantly more than previously believed, even as recently as three or four years ago.

Even less well known is how many of these are “accidentals”. Lehagre says there are believed to be as many as 120,000 across the E.U., based on European Parliament data.

He adds that a survey of his organization’s members some years ago found the average member had left the States before the age of 3, although he points out that this isn’t a representative sampling of the expat community, or even his own organization now, as it is some years out of date.

Born near San Francisco, Lehagre himself was brought to France at the age of 18 months by his French father, and never returned to the U.S.

Positive developments

Wednesday’s European Parliament vote was the latest in a series of developments that suggest Lehagre’s AAA and the other, mostly newer organizations across Europe like it are making progress in their efforts to get governmental backing for their cause.

In February, the AAA received potentially-significant from French president Emmanuel Macron’s La République en Marche party, in the form of a letter from the party’s leader to French prime minister Edouard Philippe.

The organization also was able to cite among its supporters Marc Le Fur, a French MP who is deputy speaker of France’s National Assembly.

In April, French Senator Jacky Deromedi tabled a motion inviting the country’s government “to take into account the situation affecting [France’s] accidental Americans.”

Also that month, Bloomberg News reported how a group of “Accidental Americans” in France was “[pressing French president Emmanuel] Macron for relief” from the U.S. IRS, adding that the “plight of [these] ‘Accidental Americans’ in France” could be a subject of discussion when French president Macron met with Donald Trump later that month.

It is understood that during Macron’s visit, the subject of the accidentals was discussed by U.S. treasury secretary Steven Mnuchin and his French counterpart, Bruno Le Maire, and that a French diplomatic mission subsequently travelled to Washington in May for further talks on the matter.

The Bloomberg article included input from Lehagre, and was topped by a photograph featuring him and others involved in his organization’s efforts.

Other publications that have covered Lehagre’s cru sade recently have included the Christian Science Monitor , Politico.eu, theLocal.fr, and such French media organ izations as La Dépêche, Le Figaro and Les Échos.

Hidden in a domestic jobs bill

When President Obama signed FATCA into law in March, 2010, it was hidden inside a domestic jobs bill known as the HIRE Act, and as a result, its critics say, there was little chance for those who would be affected by it to object or make changes to it.

These critics also say that the act’s authors failed to anticipate how it would affect those Americans living outside of the U.S., whose foreign bank accounts weren’t set up to hide their wealth but because they were living abroad and needed them for their daily banking needs.

FATCA also enabled the U.S. for the first time to enforce its citizenship-based tax regime, which is almost unique in the world. Eritrea is said to be the only other country to tax on the basis of citizenship rather than residence.

No one today disputes the fact that almost as soon as FATCA was signed into law, and the news of its existence began to spread, expatriate Americans around the world began receiving letters from their local banks and other non-U.S. financial institutions telling them that they would need to need to move their accounts elsewhere, as these institutions had decided it made more sense to get rid of their American clients than to attempt to comply with the new law.

By 2016, the lack of institutions willing provide banking services to American expatriates had become so desperate that the American Citizens Abroad, an expat advocacy organization, arranged with the State Department Federal Credit Union to begin providing such expats with a U.S.-citizen-friendly, U.S.-based banking facility, the way it has long done for American armed services personnel. This enables American expats to open – online even, if that’s their choice – and maintain a wide-range of U.S.-based banking services (accounts, lines of credit, etc.) without having to provide for a US residential address. (The product does not, however, give them a foreign or international bank account.)

The ACA has also campaigned for a change to a residence-based tax regime, and last November published the results of a survey which it said showed that such a change could be “revenue neutral” for the U.S..

“While we have thought for some time that this would be the case, we are very pleased to have this confirmed,” ACA executive director Marylouise Serrato said at the time.