U.S. agrees to discuss FATCA-related issues with EU
In what some campaigners for fairer treatment of EU/American dual nationals, particularly 'accidental Americans,' today hailed as a significant development, U.S. Treasury officials are reported to have agreed to meet with their EU counterparts to discuss FATCA-related issues, including those that these dual nationals are struggling with.
The location, date and other details of the planned meeting weren't immediately known, and are not thought to have yet been agreed upon.
The U.S. acceptance of an invitation to discuss "FATCA" and the "exchange of information under [its] intergovernmental agreements" – sent last December by Germany during its presidency of the Council of the European Union, in the form of a letter to U.S. Treasury Secretary Charles P. Rettig, pictured above – came on Tuesday during a meeting of the European Council's High Level Working Party (HLWP) on Taxation, according to EU sources.
The fact of the U.S.'s acceptance emerged today in unofficial briefings given by those who participated in Tuesday's "informal videoconference" meeting, which, as reported, had been expected to address the issue of FATCA, among other topics.
Fabien Lehagre, president of the Paris-based Association of Accidental Americans (l’Association des Américains Accidentels), said the U.S. authorities – represented on Tuesday by Itai Grinberg, a Georgetown University professor of law who last month was named deputy assistant secretary for International Tax Policy at the Treasury – had "accepted the request for a meeting, sent by Germany during its presidency of the Council of the European Union, to discuss the problems faced by accidental Americans."
Lehagre added: "The U.S. tax authorities requested a preliminary meeting with the chairman of the HLWP, in order to discuss the best way forward to address these problems.
"Delegates welcomed this positive reaction, and the Portuguese Presidency of the EU Council was charged with preparing [for] the discussion."
Lehagre said the development was significant, because it is "the first time that the United States has agreed to discuss this subject with the European Union."
Signed into law in 2010 as a revenue-providing element of a domestic jobs bill known as the HIRE Act, FATCA, known officially as the Foreign Account Tax Compliance Act, mandates stiff penalties for foreign financial institutions that fail to report the bank account details, including assets, of any of their clients who happen to be U.S. citizens or Green Card holders.
The law has made life significantly more difficult, and expensive, for expat Americans, but its existence is virtually unknown to most Homeland Americans. Few Washington lawmakers are familiar with it either, and those that are seem not to regard it as a matter they need to involve themselves with.
The term 'Accidental Americans' is used to refer to citizens of countries other than the U.S. but whom the U.S. considers to be American citizens as well, typically because they were either born in the States but left as babies or small children, or because one of their parents is or was American – even though they were born and grew up elsewhere.
Such individuals typically have only discovered the fact of their U.S. citizenship recently, and are often agrieved by the added burden it places upon them to file tax returns, Foreign Bank Account Reports, invest in U.S. tax-efficient investments rather than the ones normally on offer for citizens of their country, and, increasingly, to obtain and maintain accounts in banks and financial companies in the countries in which they live that increasingly prefer not to accept American citizens as clients.
FATCA issues, pushback
growing in Europe since 2019
However, as this publication and others have been reporting for some time, the difficulties that dual U.S./EU nationals have been having as a result of FATCA have been becoming increasingly hard for European governments to ignore, particularly as a Dec. 31, 2019 deadline for banks to begin including such data as their American clients' Social Security Numbers/Tax Identification Numbers in their annual FATCA reports approached.
On July 5, 2018, a resounding majority of the European Parliament voted in favor of a resolution that called for the human rights of those affected by FATCA to be respected, while in 2019, the European Parliament Petitions Committee (PETI) held a hearing on FACTA, enabling a number of individuals to detail the difficulties they're having to live with.
Meanwhile, more and more EU politicians, particularly in France and the Netherlands, have begun speaking out on behalf of the accidental Americans in their countries in particular, both in their local Parliaments and at the EU level.
In the meantime, a couple of European Court of Justice rulings in 2020 having to do with FATCA suggested that alleged problems having to do with the way FATCA potentially violates EU data privacy regulations meant that the 2010 law aimed at cracking down on Americans who made use of overseas bank and financial accounts to avoid having to pay their U.S. taxes looks to be in urgent need of revision.
Another aspect of FATCA that some European countries are understood to be keen for the U.S. to address is its lack of reciprocity – in other words, the fact that the U.S. doesn't reciprocate in the providing of data about the U.S. bank and financial accounts these countries' taxpaying nationals have, even though their financial institutions provide such information to the U.S.
French lawmakers in particular have been raising the issue recently, with the result that the French National Assembly met as recently as last November to discuss a plan that called for a change to the "intergovernmental agreement" between the U.S. and France that currently sets out how FATCA is administered.
The reciprocity issue is difficult for the U.S. to ignore, since it is one of few major non-signatory countries to a global automatic information exchange regime promulgated by the Organisation for Economic Co-operation and Development, known as the Common Reporting Standard, which began to come into force in 2017.
The U.S. Treasury and Deputy Assistant Secretary Grinberg didn't immediately reply to a request for comment.
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