updated 9:32 PM CEST, Jun 5, 2020

New problem for Dutch ‘accidentals’: Temporary closure of American consulate means no more TINs

New problem for Dutch ‘accidentals’: Temporary closure of American consulate means no more TINs https://www.nvb.nl/themas/bank-maatschappij/fatca/

Some so-called accidental Americans, who are citizens and residents of the Netherlands and who have been struggling to maintain their bank accounts there owing to their lack of a U.S. “tax information number,” have run into a new problem, a Dutch news organization has reported: The recent closure of the American consulate there, in response to the coronavirus crisis.

The report, published yesterday, was confirmed to the American Expat Financial News Journal today (Tuesday) by accidental American sources in the Netherlands.

In its report, the Amsterdam-based Financieele Dagblad  said that because accidental Americans resident in the Netherlands “cannot request certain essential data now that the American consulate is closed”, they are facing a potential “worst-case” scenario that could see them facing the freezing or loss of their Dutch bank accounts.

As reported by this publication over the last few months, this problem has emerged because America’s 2010 tax-evasion-prevention law, FATCA (Foreign Account Tax Compliance Act), had a Dec. 31, 2019 deadline for non-U.S. banks around the world to provide U.S. officials with the TINs of all their U.S. clients – after which the banks would, in theory, face significant potential financial sanctions for any American accounts they continued to maintain but which they had failed to provide such information about.

Normally an American’s TIN is their Social Security number, which those who left the U.S. as infants, or who never lived there, often have reached adulthood without having obtained, particularly if they also haven’t maintained their U.S. citizenship, which many accidentals haven’t.

The end-of-2019 deadline for providing non-U.S. banks with American account-holders' tax information numbers was seen as particularly problematic for accidental Americans, a term used to describe individuals whom the U.S. considers to be American citizens, even though they are bona fide citizens of other countries. There are estimated to be tens of thousands of such accidental Americans living in such countries as France and the UK, and an estimated 300,000 altogether throughout Europe.

The image, above, is from an animated, bi-lingual video posted last year on the website of the Dutch Banking Association (Nederlandse Vereniging van Banken, or NVB), in which it urged Americans with Dutch bank accounts of their urgent need to get their U.S. Social Security numbers if they didn't wish to risk losing their Dutch bank accounts.

Many accidentals have lived most if not all of their lives outside of the U.S., but typically were born in the States, often of non-American parents who were passing through.

In January, reports began to emerge of such so-called accidental American customers of some Dutch banks who said their bank accounts had, in fact, been frozen, and/or certain banking services had begun to be denied to them, because they had failed to provide the banks with their U.S. "tax information numbers" (TINs).

Although some sources, including the NVB, have said that to their knowledge no accidental Americans thus far have actually had their Dutch bank accounts frozen or suspended, Dutch media have repeatedly quoted individuals who have described how their access to their accounts was in fact cut off, and yesterday's Financieele Dagblad article quotes two, including a woman who was born  in the U.S. in 1940, after her father had been stationed there for work reasons, and who was only able to return home six years later owing to the outbreak of World War II. She told the FD that she had attempted to formally give up her citizenship but that such efforts apparently had been unsuccessful. 

Daan Durlacher, the founder of a Netherlands-based organization known as Americans Overseas, which is both an advocacy group and a business that helps Dutch accidentals to sort out their citizenship and financial issues, says he has also been made aware of instances of frozen accounts.

Among the banks that have been reported to have frozen accounts of accidental Americans resident in the Netherlands have been ABN AMRO, the major Dutch bank; Rabobank; and Nationale Nederlanden. 

In yesterday's Financieele Dagblad article, the NVB was quoted as saying that it was advising customers who are having problems getting their data from the U.S. consulate now that it's closed "to contact their bank as soon as possible, so that a solution can be found". But it noted that an NVB spokesperson stressed that the banks have been warning of the need to provide this information for some time. 

Last month, as reported, Dutch finance minister Johannes "Hans" Vijlbrief insisted that it would be "premature for banks to close, block or freeze" the bank accounts of dual Dutch/American clients now.

However, in a written response to more than 20 questions posed to him by three Dutch lawmakers in February, on behalf of accidental Americans resident in the Netherlands who have been struggling to maintain their Dutch bank accounts, he acknowledged that this was mainly based on the fact that, "as my predecessor [Menno Snel] wrote in the letter to the House of Representatives [on] 15 October 2019, any sanctions from the U.S. will only be in place in the summer of 2023 at the earliest", rather than on a conviction that Dutch banks should not have to provide the U.S. authorities with the TINs of their American citizen clients at all, given the existing agreements that the Netherland has with the U.S. with respect to FATCA.