Part 12: What God Hath Wrought – The #FATCA Inquisition (Review, Identify and Report on “U.S. Persons”) – Including US residents who are citizens of France and other nations!

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Introduction – FATCA and U.S. residents
In Part 10 of this series of FATCA posts, I discussed the meaning of “U.S. Person”. The vast majority of people affected by FATCA are non-U.S. residents. That said, FATCA can affect U.S. residents who are citizens of other nations and have bank accounts in the United States. In some cases, the “due diligence” rules under the FATCA IGAs are making it difficult for citizens of other nations to keep access financial services (including bank accounts) in their country of citizenship. This topic is sure to gain more and more attention.
FATCA and Swiss citizens who are resident in Switzerland
 


FATCA and French citizens resident in the USA
 


The above tweet references a post at Frenchmorning.com which I was alerted on Keith Redmond’s AmericanExpatriates Facebook group. Although the post is in French you can get a rough translation with Google Translate*.
I was first alerted (in hindsight very obvious problem) by a French politician.
Here is the problem:

  1. FATCA forces French banks to hunt for customers with U.S. indicia.
  2. French citizen (and likely permanent resident of France) is living in the United States. He could be living in the United States under a number of different visas, including a “Green Card” (permanent resident visa). In addition, he might be a France/USA dual citizen.
  3. Because of a U.S. address or phone number, he washes up the shores of the “FATCA inquisition”.
  4. He is threatened with account closures and all the other disabilities that are common in Europe.
  5. He may not be able to pay his bills because of the FATCA related bank account problems.
  6. He may or may not be required to file U.S. taxes.
  7. If he is required to file U.S. taxes, he may or not be filing U.S. taxes.
  8. Either way he has a problem with his French bank.
  9. If he has a Green Card and attempts to move back to France, he may be subject to the S. 877A “Exit Tax”.
  10. Which is why the French Politician commented that “Many of our French citizens are currently “in prison in America”.

The time has come for Governments around the world to protect their citizens from the United States of America. Fortunately, France has recently taken the lead. To be specific: France has established an inquiry into how U.S. extra-territorial legislation affects the sovereignty of France.
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* Here is the current attempt by Google to translate the French article:

The first time Paul Fashion, French retiree from New Jersey, has crossed paths with FATCA, it was in a letter sent in May 2015 by its small bank Tarneaud in Saint-Junien (Haute-Vienne). The bank informed him that the account held there for forty years would be closed “within a statutory period of 60 days” because of the mysterious American Banking Act.
Surprised, and determined not to see close this account that he perceived his retirement Fashion Paul took his pilgrim stick. In July, he argued his “right to the account” at the Bank of France. This little-known law allows a French in France or abroad who do not have deposit account to make open one. The institution recommended to initially contact several online banks. In vain. In September, according to the procedure, the Bank of France is a bank – BNP Paribas in this case – for opening the account of Mr. Mode. After a difficult communication, the bank requires that mode Paul presents himself in a Parisian agency to conduct the opening. Thing this old mechanical engineer of 77 years, without attachment to France, does not want. “I have not given up, but I will not make a special trip for it. We will certainly find me apologize for me not to open the account, he regrets, a bit annoyed. Fortunately, I managed to do everything to transfer to Bank of America. ”
Originally bank Calvary Paul mode: the fears of several banks in France find themselves in violation of FATCA (Foreign Account Tax Compliance Act), an obscure law passed in 2010 by Congress to fight against tax evasion . By law including foreign banks to report to the IRS the bank information of their clients with “American-indices” (US visa, green card, residence in the United States, binational …). Only accounts with a balance greater than $ 50,000 are covered by the law. An estimated 50,000 accounts are affected in France. Banks that do not pass the information to their customers at risk a financial penalty.
Alerted by February 2014 the increase in closures of accounts by the deputy of the French in North America Frédéric Lefebvre, the Government responded that “the big institutions, who have enough customers have not taken this path.” Now, Société Générale, Axa, ING Natixis or – of institutions pointed finger – are not small banks. And fences notifications continue to be sent, over a year after the entry into force of the law in France on 1 July 2014. “FATCA was enacted to fight against tax exile, but the little people find themselves penalized, summarizes Damien Regnard, consular advisor who held a meeting on the subject in November in Houston. For banks, the compliance represents a significant cost. They take the opportunity to get rid of customers with small accounts, little credited. We are witnessing the access limitation, limitations of operations … People do not understand that the bank has the right to close their account without having to justify. ”
Among those affected, “accidental Americans,” born in the US to foreign parents and who lived a short time on US soil. But also US citizens became French, as Christopher Hancock, teacher of English in French Guiana. Born in Washington and “naturalized French for 22 years,” he tried to open an online account with ING Direct, but the bank has openly responded to its customers on its forum that “ING has decided that, for economic reasons, all Group entities outside of the United States could not establish specific procedures “for” US Persons wishing to open one or investment products outside the United States. ”
Customers like Christopher Hancock, who presented ‘Americanism of clues “had to solve: they could not open an online account or current account or life insurance or stock portfolio. “I work in France. All my income in France. My children are in France. I only earn euro. I do not see why I should declare myself with the IRS, he says. As I had an “Index of Americanism,” I was expelled. We are not considered clients first class, while we are guests in their own right. I should have found out before these approaches. I had no idea existed FATCA. It was a bad surprise. ”
“France layer”
Deposit accounts are not alone in suffering. Denise Berthier, 87, a permanent resident in the US for thirty years, had a portfolio at Societe Generale bank customer for which it is “thirty years and my parents since 1928”. It six months ago, she received the letter informing him that his portfolio would be managed by the bank. She is now in negotiations to transfer its securities. “France is no longer sovereign over its own nationals who are in the United States. It sets. It would not have happened in the time of General de Gaulle! if she exclaims. I get the pension of my husband to an account in France. I do not want that the farm. I have an apartment that is rented in Paris and I have an account that is only used for that. I want to go to dinner with friends in France, withdraw money. This is the normal right of every citizen. ”
Same story at Patrick Pagni, French New York, chairman of the firm’s asset management Amundi Smith Breeden. He also tries to repatriate its portfolio in the US after knocking on the door of BforBank (Credit Agricole) and Boursorama. “You can not go anywhere else in Europe. Nobody wants you. I am still a French citizen, I have a green card. In banking, France asked me to go elsewhere. A French citizen can not be treated by France. The United States require us something and we do not resist, he regrets – Mr. Pagni is a member of the New York Republicans antenna. There French 200,000 in the United States. Less than 10% should have a portfolio of securities. This concerns only very few people. ”
Legal proceeding
No French banks mentioned in this article has responded to our request for comment. Only the Bank of France said that customers who wanted to see open a current account in France “must present physically agency. The model is well. ” She stressed that the Bank of France has “not been many cases of referrals” to assert the right to the account, perhaps through ignorance of this right.
“The law of the right to the account is not made for the French abroad, but this is a minor problem for the government now,” laments Paul Fashion, New Jersey. “To stop some traffic with FATCA and catch one in a hundred, they will bother to 99. For us, it was still convenient to have an account in France for payments to the family for example. ”
In the US, FATCA also causing a stir. In July 2015, Senator Rand Paul, a former candidate for the Republican primary, and others have filed a lawsuit against the Obama administration on the ground that FATCA is unconstitutional and it causes many US expatriates to give up their nationality because of difficulties of access to certain banking services. In 2015, 4,279 waivers were recorded by the US Treasury Department. A record. main reason, according to the BBC: FATCA.

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