updated 2:11 PM CET, Oct 31, 2023

UK's Guardian, Daily Mail and Belgian media report story of 'thousands' at risk of having bank accounts closed

The UK's Guardian newspaper and a couple of Belgian media organizations have published stories this weekend that follow up on concerns that thousands of Americans face the loss of their bank accounts at the end of this year, owing to these Americans' lack of the "Tax Identification Number" that their European banks require to comply with the U.S. tax evasion law known as FATCA.

On Monday, August 26, the Daily Mail's online edition picked up the Guardian's story, a measure of how rapidly awareness and interest in the issue is growing.

"Tens of thousands of British citizens born in the U.S. but who left when only a few months or years old risk having their bank accounts in Britain frozen because of intense pressure by U.S. tax authorities on UK banks," the Guardian article, published Sunday evening on the Guardian's website, begins.

"In one case, a 74-year-old living in Cambridge has been sent increasingly urgent letters from Barclays demanding her American tax identification number, even though she left the U.S. on the RMS Queen Elizabeth in 1947 when she was just 18 months old," the article continues.

"She had assumed that her US citizenship had lapsed." 

The Daily Mail article, which may be viewed by clicking here, cites the example of what is apparently the same 74-year-old woman from Cambridge who left the U.S. in 1947 at the age of 18 months. It also refers to the possibility of accounts being "frozen" rather than "closed," which one source familiar with the legislation said is not correct.

The Guardian article doesn't give any official estimate as to how many Americans resident in the UK are thought to be at risk, but notes that "the European Banking Federation estimates there are nearly 300,000 accidental Americans in the EU," and that the numbers of such TIN-lacking Americans in the UK "are thought to be similar to France, where 40,000 citizens are affected."

On Friday, the Belgian news website VRT.be, the news outlet of the Flemish/Belgian VRT public-service broadcasting organization, published an article on the same subject as the Guardian's, as it applies to dual American/Belgian citizens resident in Belgium, which was picked up a few hours later by the English language Belgian Bulletin.be.

The English-language Brussels Times also had a story on Friday, headlined "Thousands of Belgians could lose bank accounts under new U.S. banking law".

"Thousands of Belgians born in the United States are in danger of losing their Belgian bank accounts in 2020," the VRT.be report said, adding: "Belgian banks are required to pass on data from customers born in America to the US tax authorities. But not all those customers have the necessary information."

For this reason, the article went on, these clients risk having their accounts closed on Jan. 1, 2020, as Belgium's banks risk a 30% withholding tax on their U.S.derived income if they are found to fail to comply with the Foreign Account Tax Compliance Act, which will require them to provide TINs, normally Social Security numbers, for all their American account-holders after that date.

As the American Expat Financial News Journal has been reporting for months, Europe's banks have increasingly been sounding the alarm about the difficulties they have been having in providing bank accounts to tens of thousands of European citizens who happen to be considered to be Americans by the U.S. tax authorities, but who typically don't view themselves as Americans, and who lack a TIN.

Among those highlighting the problem has been the Paris-based Accidental Americans Association, headed by Fabien Lehagre. Lehagre has helped to bring the issue to the attention of France's lawmakers as well as French news organizations. 

As reported, the head of the Brussels-based European Banking Federation, which represents some 3,500 banks across Europe, warned U.S. Treasury officials in February about the problem, and said Europe's banks were increasingly having to choose between “[continuing] to provide financial services, including basic banking services” to these European citizens who are also U.S. citizens, but who lack a TIN – “or stop doing so."

One of the issues for Europe's banks is that they are required by law to provide bank accounts to those EU citizens who ask for one.

Since the EBF's formal warning in February, the approaching December 31 expiration of a "grace period" that has enabled banks to not have to report the TINs of their American clients has been focusing growing attention on the matter.

Last month, the head of the French Banking Federation formally warned France's finance minister that the country's banks could be forced to close as many as 40,000 bank accounts belonging to French citizens with perceived U.S. tax obligations who lack the requisite TINs.

As reported here earlier this month,  UK Finance, the trade organization which represents the UK's banking industry, was unable to estimate how many dual American/British citizens currently have U.K. bank accounts, but lack TINs, and therefore potentially fall into the category of "accidentals".

A spokesman for the organization told the American Expat Financial News Journal that the UK's banking industry "supports the European Banking Federation’s work with the European Commission and the US Treasury in this area, and we continue to liaise with our members, HM Revenue & Customs and the US Internal Revenue Service on this issue.” 

For Americans living outside the U.S., the problems began after President Obama signed the Foreign Account Tax Compliance Act into law – buried and thus effectively hidden inside a piece of domestic jobs legislation known as the HIRE Act.

FATCA required "foreign financial institutions", including non-U.S. banks, to report annually to the U.S. authorities on the accounts held by all of their American clients, or else face significant financial penalties. Almost as soon as the law was signed, banks began to ask Americans resident abroad to take their bank accounts elsewhere, even though FATCA didn't actually come into force until 2014.

The problem has been particularly difficult for hundreds of thousands of so-called "accidental Americans" who, like the 74-year-old Cambridge woman cited in the Guardian article, were often born in the U.S. to non-American parents who subsequently moved back to their home countries or elsewhere soon after, and brought up these children as citizens of other countries. Such individuals typically don't see why they should have to obtain Tax Identification Numbers and file U.S. tax returns, let alone pay taxes to the U.S., and also cannot understand why their local banks and governments don't stand up for them when the U.S. insists that they should.  

In May, as reported, two French Assembly members published a report which called on the French government to engage in further negotiations over FATCA, and if necessary abandon it altogether, if it proved unable to resolve the "extra-territorial tax" problems, such as the bank accounts issue.

This story was updated on Monday Aug. 26 to add the fact of the Daily Mail's article.