More than two years after the Paris-based Association of Accidental Americans filed a formal complaint over the way the EU enforces FATCA, the European Commission has replied at last, with a three-page summary of its thoughts on the matter, in which it indicates that it regards the EU's member states' own data protection authorities best-placed to determine the compatibility of these states "intergovernmental agreements" with the U.S.
The response was signed by Emmanuel Crabit, the director for Fundamental Rights and Rule of Law at the European Commission's Directorate General for Justice and Consumers, and dated Oct. 22 (last Friday), according to AAA founder and president Fabien Lehagre, who posted news of the receipt of the letter on social media, including the AAA's Facebook page, as soon as it arrived.
He noted that the European Commission's response had taken not just two years but also "a complaint to the European Union Ombudsman" to be produced.
He added, summarizing the letter's key points: "The European Commission says it is carrying out an in-depth examination of our complaint, but that it intends to do so as part of a broader assessment of the situation in all EU member states.
"It says it considers that the national data protection authorities (ANPD) are best place to determine the compatibility of IGAs, as transposed into domestic law with their national data protection law.
"Meanwhile, it does not commit to the processing times for addressing our complaint."
Lehagre, pictured left, noted that in April of this year, the European Data Protection Board had formally invited the EU member states to consider a "review" of those of their international agreements "that involve international transfers of personal data, such as those relating to taxation (e.g. to the automatic exchange of personal data for tax purposes, including FATCA)," but that thus far, French Finance Minister Bruno Le Maire had declined repeated requests "by several French Parliamentarians" to disclose what findings France's review had turned up.
Lehagre added: "The European Commission will have to face the facts. If it wishes to maintain its credibility in this matter, it has no choice but to open infringement proceedings against the member states," on grounds that the bilateral FATCA agreements [between the U.S. and the various EU member states] violate the GDPR."
The GDPR (General Data Protection Regulation) was passed by the EU in 2016, but didn't come into force until May of 2018. FATCA (Foreign Account Tax Compliance Act) was signed into law by President Obama in 2010, and came into force in 2014.
FATCA obliges "foreign" (non-U.S.) financial institutions to report the bank account details, including assets, of all of their account holders who happen to be U.S. citizens or Green Card holders, even if they are also citizens of the countries in which the financial institution in question is located.
Institutions that are found to have failed to comply with FATCA are potentially subject to a 30% withholding tax on any of their own transactions in the U.S.
The problem for "accidental Americans" is that many, like Lehagre, were either born in the U.S., or born abroad to an American parent, but have spent most if not all their lives as citizens of other countries, and therefore lack the "Tax Identification Numbers", typically Social Security numbers, that the U.S. requires non-U.S. financial institutions to include when forwarding information on their "American" account holders.
Many of these so-called "accidentals" don't consider themselves to be American, and resist and resent having to enter the U.S. system long enough to formally renounce, which can also be costly.
One of numerous actions
The Association of Accidental Americans' 2019 European Commission complaint over the way FATCA is enforced in France was one of a series of actions Lehagre's organization has taken over the years since he founded it in 2017.
In 2020, for example, it brought a legal action against certain French banks that it said had been discriminating against "accidental Americans" with French citizenship by making it difficult if not impossible for them to maintain a French bank account. In 2019, it brought a legal challenge in France's Conseil d'Etat, the country's top administrative court, in which it claimed that the way France implements FATCA violated the privacy of dual French/American citizens.
(As reported, the Conseil d'Etat rejected its claim in July 2019, saying it saw no legal basis to support the AAA's claims. The AAA then promptly filed a similar complaint with the European Commission, the response to which is described above.)
Last December, the organization – along with 20 individual accidental Americans of 10 different nationalities – filed a complaint in U.S. District Court in Washington against the U.S. State Department, alleging that the US$2,350 fee the U.S. currently charges those wishing to renounce their American citizenship violates the U.S. Constitution and international law.
Last month it followed this up with another action against the State Department, arguing that in addition to being too expensive, the citizenship renunciation process also needed to be made much easier, and that, for example, in-person appointments with a consulate official in a designated U.S. Loss of Nationality Services office, typically in an overseas U.S. consulate, should no longer be required.