updated 11:25 AM CET, Feb 23, 2020

Dutch Parliament to meet 'accidental Americans' next week, as banks continue freezing accounts

Dutch Parliamentarians are scheduled to meet with Netherlands-resident so-called 'accidental Americans' next Wednesday, to discuss the continuing problem of banks in the Netherlands that have been freezing the bank accounts of some such 'accidentals'. 

News of the meeting comes as reports have been emerging – thus far officially unconfirmed – that some accidental Americans resident in Germany have begun having their bank accounts frozen as well, and as U.S. officials have continued to remain silent on the matter.

As reported here last week, the Dutch banks have been freezing these Americans' accounts because, they say, these clients have failed to provided them with their U.S. Tax Information Numbers (TINs, usually a person's Social Security number) that a U.S. tax evasion-prevention law known as FATCA, which – the banks maintain – has required them to have for all their American account-holders, as of the end of last month.

However, towards the end of last year, a number of European lawmakers and even a new answer on an Internal Revenue Service "frequently-asked questions" page stressed that the banks don't need to worry about the U.S. taking action against them for now.

In a statement today, the Dutch Banking Association (the Nederlandse Vereniging van Banken) noted that Dutch banks had been urging their American clients to get their Social Security numbers "for years now", that "a large majority of [their clients]" have complied, and that it was now "up to individual banks to make their own risk assessment and decide what policy they have regarding the small group of US clients still without an SSN."

The banking association added: "We believe that the clarifications given by the IRS on their FATCA FAQ page are consistent with the provisions of the Intergovermental Agreement" – a reference to the treaty between the Netherlands and the U.S. which sets out how FATCA is enforced.

"The Dutch banks have furthermore agreed a procedure with the U.S. Consulate in Amsterdam, under which clients that apply for the new Loss of Nationality procedure can continue using their bank accounts, pending the completion of that procedure, which may take several months, even when they do not have a SSN."

The IRS unveiled the new "Relief Procedures for Certain Former Citizens" in September, apparently to enable mostly accidental Americans who have relinquished their U.S. citizenships, or who are hoping to, the chance to easily and cheaply enter into U.S. tax compliance. 

'Around 10 new cases a day'

Daan Durlacher croppedDaan Durlacher, the Netherlands-born, U.S.-citizen founder of Americans Overseas, a campaign group that will attend next week's Parliamentary meeting in the Hague, said his organization is receiving complaints, "and the stories of people who have been struggling to keep their banks from freezing their accounts," on a daily basis, running at a rate of around 10 fresh cases a day.

"The other day someone told us that his bank had assured him it wouldn't freeze his account, as [they understood that] he was waiting to receive his CLN [Certificate of Loss of Nationality], but then the bank went ahead and blocked his account last Friday anyway."

Among the Dutch banks that have reportedly been freezing American accounts have been ABN AMRO and Rabobank.

Durlacher and some other American-expat advocates close to the situation say they don't understand why the U.S. authorities don't issue a statement saying that they will extend, for another year or two, a moritorium on a requirement that non-U.S. financial institutions provide them with the TINsSSNs of all their American-citizen clients, including dual citizens who might not consider themselves to be Americans, as they've lived most or all their lives outside the U.S.

The moritorium expired on Dec. 31.

The U.S. Treasury, IRS and the U.S. Consular Office in Washington thus far have all declined to reply to requests for comment.

One organization that has been engaged with the FATCA enforcement deadline issue for months has been the European Banking Federation, which represents some 3,500 banks across Europe.

In a statement this week, it reiterated a message it has sought to make for much of 2019, which is that it believes the U.S. needs to fully address the problem European banks are having in their desire to comply with FATCA, while still keeping so-called 'accidental Americans' who lack Social Security numbers as clients.

A spokesperson for the EBF told the American Expat Financial News Journal that the situation with respect to the banks, particularly in the Netherlands, "continues to be...very diffuse and unclear". 

"Against that backdrop, banks are making their own decisions," the spokesperson added.

"The negative impact of FATCA clearly remains a concern for bank clients and banks alike. The U.S. government needs to clarify and address this properly – both in the interest of Europeans who happen to be born in the U.S. as well as in the interest of banks, [which] have to consider the possible legal consequences.

"So far, this has not been the case." 

EBF chief executive Wim Mijs has repeatedly sought to engage U.S. officials with respect to the matter in a series of letters to U.S. Treasury Secretary Steven Mnuchin, the most recent of which was dated Nov. 8. 

In that letter, Mijs noted that a survey of the EBF's membership revealed that there could be as many as 135,000 bank customers across the EU who were considered to be Americans but who lacked the necessary TINs.

"It is with sincere gratitude that we welcome the updated version of the FATCA FAQ website, which under Q3 of 'Reporting' section partially addressed our request to provide for a solution to the issue of the "U.S. Reportable Accounts without U.S. TINs," Mijs told Mnuchin, in his Nov. 8 letter.

"However, a significant concern persists with regards to the legally-binding nature of the FAQ, and the ability of our members to rely on this form of non-binding guidance. Therefore, we would like to request that the Internal Revenue Service issues a formal notice incorporating the language of the Q3 of "Reporting" section of the FATCA FAQ website, which would guarantee legal certainty and enforcement."

Mijs then goes on to clarify what he suggests is an error in the IRS's FAQ response in question, saying, "we would like to clarify that a reporting Model 1 FFI has never been required to withhold on accounts that do not contain a TIN, and under the existing Model 1 IGA it cannot be required to do so.

"Therefore, we request that the Q3 of 'Reporting' section of the FATCA FAQ website as well as the formal notice which would incorporate this language are amended to remove the reference to a withholding and therefore reads as follows: '...a reporting Model 1 FFI is not required to immediately close on accounts that do not contain a TIN'." 

Dutch AAA

Rob Gerretsen is a spokesperson for the Dutch Accidental Americans Association, which, like Americans Overseas, represents Americans living in the Netherlands who have Dutch nationality and consider themselves to be Dutch, but who have been informed that the U.S. government considers them to also be American citizens. 

"Since the implementation of FATCA [in 2015], some 46,000 Dutch accidental Americans have [been] blackmailed by the banks, robbed by the U.S., and ignored by the Dutch government and Europe," he said in a statement.

He said his group could prove that the way such accidentals are being treated by the Dutch government and European Union, including under the General Data Protection Regulation [GDPR] legislation, "is not allowed", and that among the group's demands is for a cheaper way to give up their U.S. citizenship, which currently costs a basic fee of US$2,350 ("eleven times the cost of a U.S. passport") and which would also not involve their having to pay taxes to the U.S. as well, "a country with which we have no ties". 

ABN AMRO: 'Temporary measure'

As the American International Financial News Journal reported last week, an ABN AMRO spokesperson confirmed that the bank had temporarily made it "not possible to do transfers to, or from" the bank accounts of a "small group" of its clients.

Echoing the Dutch Banking Association's comments today, this spokesperson stressed that the "temporary measure" had only been put into place after numerous letters to clients – including five letters 2019 – had not resulted in any action, and that the goal of the temporary measure was simply to "get in touch" with these clients and collect "the relevant information...which the bank is obligated to do under FATCA".

"This legislation has been in place for years already," the spokesperson noted. "A large group of clients have reacted by now."

The requirement to provide the information about those of its clients with American reporting obligations, the spokesperson said, was "based on this treaty [FATCA] between the Dutch and American government[s]".

One of the Dutch media organizations that has covered the story of the frozen bank accounts has been the Nederlandse Omroep Stichting (NOS) television network. A report on its website last week quoted an accidental American named Ronald Ariës as saying that he had filed a lawsuit against his bank over the matter, and that he believed that the Dutch Ministry of Finance should tell the Americans that they should leave him alone.

Click here to sign up to receive the American Expat Financial News Journal's free weekly news bulletin, and occasional breaking news bulletins.