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Part 7: US Supreme Court Denies Toth Cert Petition. Justice Gorsuch Invites Lower Courts To Consider Constitutionality of FBAR Penalties

Prologue – Before The Supreme Court – The Background To The Toth FBAR Case

This Is Post 7 in a series of posts describing the statutory and regulatory history of Mr. FBAR.

These posts are organized on the page “The Little Red FBAR Book“.*

Historically the strength of America has been found in its moral authority. As President Clinton once said:

“People are more impressed by the power of our example rather than the example of our power…”

The FBAR penalty imposed on Ms. Toth is an example of the legal power to impose penalty and NOT an example of the restraint on power and the application of law in a just way. I have heard it said that when a person (and by extension country) loses its character it has lost everything.

The Story Of Monica Toth – Three Perspectives

Perspective 1: The story of Ms. Toth’s encounter with Mr. FBAR as described by Justice Gorsuch in his dissent:

In the 1930s, Monica Toth’s father fled his home in Germany to escape the swell of violent antisemitism. Eventually, he found his way to South America, where he made a new life with his young family and went on to enjoy a successful business career in Buenos Aires. But perhaps owing to his early formative experiences, Ms. Toth’s father always kept a reserve of funds in a Swiss bank account. Shortly before his death, he gave Ms. Toth several million dollars, also in a Swiss bank account. He encouraged his daughter to keep the money there—just in case.

Ms. Toth, now in her eighties and an American citizen, followed her father’s advice. For several years, however, she failed to report her foreign bank account to the federal government as the law requires. 31 U. S. C. §5314. Ms. Toth insists this was an innocent mistake. She says she did not know of the reporting obligation. And when she learned of it, she says, she completed the necessary disclosures. The Internal Revenue Service saw things differently.

Pursuant to §5321, the agency charged Ms. Toth with willfully violating §5314’s reporting requirement and assessed a civil penalty of $2.1 million—half of the balance of Ms. Toth’s account—plus another $1 million in late fees and interest.

Perspective 2: The issue in the Toth case as described in a September 20, 2022 post:

The penalty imposed on Ms.Toth was dependent on a finding of “willfulness”. “Willfulness” is a question of fact to be determined by the court. In the Toth case the District court deemed Ms. Toth to be “willful” as a court imposed sanction. There was no independent evaluation of the facts to determine whether she was “willful”. Absent an independent evaluation of the facts, can there ever be a finding of willfulness necessary to support the 50% account penalty?

Perspective 3: The August 26, 2022 PETITION FOR A WRIT OF CERTIORARI to the Supreme Court of The United States described the issue as follows:

QUESTION PRESENTED

The Bank Secrecy Act and implementing regulations require U.S. persons to file an annual report — called an FBAR — if they have foreign bank accounts containing more than ten thousand dollars. The maximum civil penalty for willfully failing to file the report is either $100,000 or half the balance in the unreported account, whichever sum is greater. 31 U.S.C. § 5321(a)(5)(C)-(D). Using this formula, the government imposed on petitioner a civil penalty of $2,173,703.00.

The question presented is whether civil penalties imposed under 31 U.S.C. § 5321(a)(5)(C)-(D) — penalties that are avowedly deterrent and noncompensatory — are subject to the Eighth Amendment’s Excessive Fines Clause.

Eighth Amendment Cruel and Unusual Punishment

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

The indisputable facts include (but are not limited to) that, Mr. FBAR is being used to confiscate approximately two million dollars of a Swiss Bank account with a balance of approximately four million dollars. The account was owned by an 82 year old woman and was funded by money received from her father in Argentina. The account was initially funded by money that was NOT and never was subject to US taxation. The penalty was based on the penalty for failing to file an FBAR. In addition, the necessary condition of “willfulness” was based on a court sanction and NOT on an independent evaluation of the facts.

These facts resulted in Ms. Toth’s encounter with Mr. FBAR in the penalty zone!

The Supreme Court Response – January 23, 2023:

I had the opportunity to discuss the decision in a podcast with Dubai based lawyer Virgina La Torre Jeker.

On January 23, 2023 the Supreme Court of the United States (Justice Gorsuch dissenting) denied the cert petition. In other words, the court declined to consider whether Ms. Toth’s 2 million willful civil FBAR penalty, based on a 4 million Swiss bank account balance, violated the “Excessive Fines” clause of the eighth amendment. (The effect of the court’s decision to NOT hear the case means that the US government is now – through the law of FBAR – in a position to confiscate two million from Ms. Toth. But,”It’s The Law”.)

More broadly and abstractly, the refusal to grant the cert petition means that the court refused to hear the case. The court’s refusal to hear the case is NOT equivalent to a ruling that civil willful FBAR penalty is constitutional. It means only that the Supreme Court of the United States will NOT be the court (at least as of January 23, 2023) to decide the issue. In his dissent Justice Gorsuch reinforces this point (and invites lower courts to consider the issue) by writing:

For all these reasons, taking up this case would have been well worth our time. As things stand, one can only hope that other lower courts will not repeat its mistakes.

Nevertheless, the court’s refusal to hear the Toth case will likely be interpreted:

– by the IRS (and other government agencies) as a license to continue a growing penchant to impose punitive FBAR penalties in general and engage in civil forfeiture in particular

– by the public as a continuing signal that there is a clear distinction between the interpretation of law and the application of justice and never shall the twain meet

– by the legal profession that the penalties under Title 31 are a subset of civil forfeiture penalties in general

– by the international community as further confirmation that the United States is a country lacking proportionality between violations of the law and the penalties imposed

Interestingly and significantly Justice Gorsuch penned a vigorous dissent*. In this dissent he took the time to describe the facts, describe the history of penalty in the United States and to explain why the court should have agreed to hear the Toth appeal. Justice Gorsuch appeared to rely on an amicus curie brief filed by California law professor Beth A. Colgan**. Excerpts from both are included as Appendixes *A and **B to this post.

One is left with the impression that:

Justice Gorsuch is an island of justice and sanity in an ocean of unfairness, injustice and insanity.

The world eagerly awaits the Supreme Court’s decision in the Bittner FBAR case!

John Richardson – Follow me on Twitter @Expatriationlaw

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Financial Planning For Americans Abroad and By Americans Abroad

Prologue

In the 21st century it has never been more true that:

On the one hand responsible money management, investing and financial planning is a necessity.

On the other hand Americans abroad have been severely disabled from those essential activities by the US tax system.

US citizens presumptively do NOT benefit from tax advantaged financial planning options outside the United States. The circumstance of US citizenship makes participation in non-US pension plans difficult. The PFIC regime operates to make even investing in non-US mutual funds a difficult proposition. Those Americans abroad who attempt to create private pension plans by using small business corporations will likely find that the CFC, Subpart F and GILTI rules make this difficult.

It’s entirely understandable that many Americans abroad have lost their incentive to care financially for themselves and their families.

The message is clear:

When it comes to investing, financial planning and retirement planning US citizenship is presumptively a disability!

That said, it’s essential that US citizens do NOT allow the US extra-territorial tax regime to cause them to NOT engage in retirement and financial planning! They must adopt a “can do” attitude and understand that even with the disability of US citizenship, they can – with the proper advisors – invest for retirement like the citizens of all other countries. In fact, those who are successful, can take pride in the fact that they succeeded NOT because they were American but in spite of being American! Those who are successful can proudly and defiantly say:

“I’m American, but I’m gonna invest for retirement anyway!”

For Americans abroad investing and retirement planning requires a positive mindset and often a competent advisor.

At a minimum, Americans abroad need financial advisors who understand what it means to be an American abroad.

Creveling and Creveling – Financial Planners For Americans Abroad By Americans Abroad

Investment advisors for Americans abroad is a growing industry. I recently had the opportunity to meet and talk with Peggy Creveling, who is one of the two Crevelings who is part of Creveling and Creveling a Thailand based financial planning firm. Investing and financial planning is a “long term” commitment in the same way that health and fitness is a long term commitment. Most people need a mentor and motivator. This requires that they meet the right kind of mentor who will guide them toward their specific goals.

As part of my podcast series for the American Expat Financial News Journal I had the opportunity to meet and chat with Peggy Creveling. This resulted in the following two podcasts:

Part 1 – From growing up in Ohio to West Point to Thailand – The Making Of A Financial Planner
https://americanexpatfinance.com/podcasts/35-basic-financial-fundamentals-that-makes-all-the-difference-for-americans-who-live-abroad-3

Part 2 – Thinking about financial planning and investing – the difference between investing and speculating
https://americanexpatfinance.com/podcasts/36-thoughts-on-financial-planning-for-u-s-expats-part-2

Bottom line: Americans abroad really need to commit to investing and financial planning. You are likely to find the insights and thoughts of Peggy Creveling to be helpful!

John Richardson – Follow me on Twitter @Expatriationlaw

November 2, 2022 Supreme Court FBAR Case: ALEXANDRU BITTNER, Petitioner v. UNITED STATES Respondent – No. 21-1195

Here is the audio recording of the November 2, 2022 Bittner FBAR hearing …

On November 2, 2022 the Supreme Court Of The United States heard the Bittner case. The issue was whether in the context of a non-willful FBAR penalty:

1) The government is restricted to imposing one penalty based on the failure to file one FBAR; or

2) The government is authorized to impose one non-willful penalty for each of the accounts that should have been reported on the single FBAR form.

For example, let’s imagine that a US citizen has ten accounts that are “foreign” and he fails to file an FBAR form. Is the penalty based on the failure to file the form itself (one form means one $10,000 penalty)? Or may the government impose a penalty based on the failure to disclose each of the accounts on the FBAR form (10 times $10,000 = $100,000)?

Mr. Bitter is/was a dual US Romanian citizen who was living in Romania during the years that the FBAR penalties were imposed. According to the closing comments of his lawyer, Mr. Bittner (while living in Romania) had filed US tax returns for years that he had a business connection to the United States (apparently investing in a relative’s business in California). In other words, there is some evidence that Mr. Bittner was not fully aware that as a US citizen, his US tax and reporting obligations applied even when he did not live in the United States. In any case, Mr. Bitter argues that he should have received one $10,000 penalty for each of the five years ($50,000). The government imposed penalties of 2.7 million dollars based on a failure to report 52 accounts.

On Wednesday November 2, 2022 the Supreme Court of the United States heard argument on the “per account vs. per form” issue.

The above podcast contains the audio file of the live arguments.

A transcript of the arguments is here:

http://citizenshipsolutions.ca/wp-content/uploads/2022/11/21-1195_5i36.pdf

A recording from C-span is here:

https://www.c-span.org/video/?523324-1/bittner-v-united-states-oral-argument

The following twitter thread reflects my impressions while listening to the arguments …

https://threadreaderapp.com/thread/1587807427327655937.html

Earlier podcasts discussing this case are included as an *Appendix to this post.

Continue reading

Part 3: Mr. FBAR’s Civil Penalty – 5321(a)(5): Schik – Willful Or Non-Willful And What Does Willful Even Mean?

This Is Post 3 in a series of posts describing the statutory and regulatory history of Mr. FBAR.

These posts are organized on the page “The Little Red FBAR Book“.*

Introduction

The staring point is analyzing an FBAR violation is assess whether the violation was will or non-willful.

Part A – The question of willfulness is a question of fact that must be determined

Excerpts from the judgment – from MARY KAY VYSKOCIL, United States District Judge – include:

The expectation of the IRS was not borne out by courts around this country, which have uniformly held the Government to a preponderance standard in civil FBAR cases. See United States v. Demauro, 483 F.Supp.3d 68, 87 (D.N.H. 2020) (applying preponderance of the evidence standard to civil FBAR case); United States v. De Forrest, 463 F.Supp.3d 1150, 1156 (D. Nev. 2020) (same); United States v. Ott, 441 F.Supp.3d 521, 527 (E.D. Mich. 2020) (same); United States v. McBride, 908 F.Supp.2d 1186, 1201 (D. Utah 2012) (same); Bedrosian v. United States, 2017 WL 3887520, at *1 (E.D. Pa. Sept. 5, 2017) (same). Particularly instructive is a recent opinion from the United States District Court for the District of Connecticut. In United States v. Garrity, the court concluded that the standard generally applicable to civil suits for money damages-preponderance of the evidence-applied in civil FBAR penalty cases. 304 F.Supp.3d 267, 270-71 (D. Conn. 2018).

To be found liable for a willful violation under 31 U.S.C. § 5321(a)(5), the United States must prove by a preponderance of the evidence that: (1) Mr. Schik is a United States citizen, (2) Mr. Schik had an interest in, or authority over a foreign financial account; (3) the account had a balance exceeding $10,000.00 at some point during the reporting period; and (4) Mr. Schik willfully failed to disclose the account and file a FBAR. 31 U.S.C. §§ 5314, 5321(a)(5)(A); 31 C.F.R. §§ 1010.350(a) and (b). There is no dispute with respect to the first three elements. 56.1 ¶¶ 1, 5-6; see also Opp. at 9 (arguing only the willfulness prong). Mr. Schik also concedes that he did not timely file an FBAR for 2007. 56.1 ¶ 7.

At bottom, whether Mr. Schik’s conduct was “willful, ” rather than merely negligent, is a question of fact. United States v. Gormley t 201 F.3d 290, 294 (4th Cir. 2000) (state of mind is question of fact); Rykoff v. United States, 40 F.3d 305, 307 (9th Cir. 1994) (same); Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1476 (11th Cir. 1991) (state of mind is question of fact to be determined by factfinder at trial); United States v. Williams, 489 Fed.Appx. 655, 658 (4th Cir. 2012). The Court cannot conclude that Mr. Schik’s failure to disclose his accounts was willful as a matter of law. The evidence, taken in the light most favorable to Mr. Schik, creates a genuine dispute of material fact. Accordingly, the Government is not entitled to judgment as a matter of law on the issue of willfulness.

https://casetext.com/case/united-states-v-schik

Part B – Willfulness is a question of fact. But, what is/are the facts that must be proven to establish willfulness in the civil FBAR penalty context?

The test for what constitutes a willful FBAR civil FBAR violation is an evolving and difficult area of the law. The key point is that the government can establish willfulness without proving actual knowledge of the requirement to file an FBAR. Some states of mind and levels of awareness (recklessness or willful blindness) can suffice. In some cases the failure to acknowledge the existence of foreign accounts on Schedule B of the 1040 can suffice. Evidence of attempts to conceal the existence of accounts (failure to disclose to tax preparer, etc.) is relevant. In others words, “willfulness” is usually established by a combination of factors.

I will expand on this post over time. That said, one of the best expositions on this issue is found in the November 2018 article: What constitutes a willful FBAR Penalty? – Hale E. Sheppard which concludes with:

Conclusion

As this article demonstrates, the concept of “willfulness” in the FBAR setting has been controversial for a long time, and
the scrapping is bound to increase in the coming years as the OVDP comes to an end, the IRS gets more foreign account
data thanks to FATCA, the IRS enhances its ability to cross-check account data on FBARs and Forms 8938, theIRS starts international audits to confirm compliance with the new“repatriation tax” and other aspects of the Tax Cuts and Jobs Act of
2017, etc. In other words, FBAR issues will become even more important in the future, not less. Therefore, taxpayers who
have unresolved foreign account matters, who are contemplating opting-out of the OVDP, who are analyzing their eligibility
for the SFOP or SDOP, or who have already been caught by the IRS, need to hire experienced international tax professionals
and examine all relevant issues, especially the evolving concept of “willfulness.”

The cases of Toth and Bitter suggest Mr. Sheppard’s prognostication is correct.

FBAR violation article JTAX Nov 2018

John Richardson – Follow me on Twitter @ExpatriationLaw

Part 2: Mr. FBAR’s Civil Penalty – 5321(a)(5): Interpreting The Penalty Provision – Asking The Right Questions

This Is Post 2 in a series of posts describing the statutory and regulatory history of Mr. FBAR.

These posts are organized on the page “The Little Red FBAR Book“.*

Introduction – Distinguishing The Non-Willful Civil FBAR Penalty From Criminal Penalties

There have always been criminal penalties for FBAR violations. Civil penalties for FBAR WILLFUL violations were introduced as USC 31 5321(a)(5) in 1986. In 2004 USC 31 5321(a)(5) was amended to create a civil non-willful penalty. The current options for FBAR violations are:

– Criminal 31 USC 5322
– Civil willful 31 USC 5321(a)(5)
– Civil non-willful 31USC 5321(a)(5)

Each of these comes with its own permissible penalty range.

The purpose of this post is to explore ONLY the civil FBAR penalty regime in USC 31 5321(a)(5).

The text of the 53231(a)(5) …

(5)Foreign financial agency transaction violation.—

(A) Penalty authorized.—

The Secretary of the Treasury may impose a civil money penalty on any person who violates, or causes any violation of, any provision of section 5314.

(B) Amount of penalty.—
(i)In general.—
Except as provided in subparagraph (C), the amount of any civil penalty imposed under subparagraph (A) shall not exceed $10,000.
(ii)Reasonable cause exception.—No penalty shall be imposed under subparagraph (A) with respect to any violation if—
(I)such violation was due to reasonable cause, and
(II)the amount of the transaction or the balance in the account at the time of the transaction was properly reported.

(C) Willful violations.—In the case of any person willfully violating, or willfully causing any violation of, any provision of section 5314—
(i)the maximum penalty under subparagraph (B)(i) shall be increased to the greater of—
(I)$100,000, or
(II)50 percent of the amount determined under subparagraph (D), and
(ii)subparagraph (B)(ii) shall not apply.

(D) Amount.—The amount determined under this subparagraph is—
(i)in the case of a violation involving a transaction, the amount of the transaction, or
(ii)in the case of a violation involving a failure to report the existence of an account or any identifying information required to be provided with respect to an account, the balance in the account at the time of the violation.

Analyzing the statute: What has to be proved, by whom and according to what standard?

It is generally agreed that in the context of the civil (as opposed to criminal) that the standard of proof is the civil standard of “preponderance of the evidence” and NOT the criminal standard described in Cheeks of “beyond a reasonable doubt”.

When considering the operation of 5321(a)(5) penalties (and assuming a person “who violates, or causes any violation of, any provision of section 5314” ), the order of analysis in the civil FBAR penalty context should ask the following questions:

1. Was the failure to file or report willful or non-willful? If willful reasonable cause is not a defence and massive penalties “may” be imposed. (Willfulness is a question of fact and the government bears the burden of proof on a preponderance of the evidence standard.)

(To be clear, if there is a finding of willfulness then a penalty of the greater of $100,000 or 50% of the account balance at the time of the violation “may” be imposed.)

2. If the failure to report was non-willful (maximum penalty of $10,000) can the account holder defeat the imposition of a penalty by proving on a preponderance of the evidence (note the account holder bears the burden of proof):

(A) Reasonable cause for the failure to file; and

(B) that the account was properly reported.

3. If the failure was non-willful but the penalty cannot be defeated through reasonable cause:

(A) how much should the penalty be (up to $10,000 adjusted for inflation); and

(B) can that penalty be imposed on each account or is the penalty restricted to a single FBAR penalty based on a failure to file a single form?

Note that the answer to the “non-willful” vs. “willful” question has a huge bearing on the amount of the penalty that “may” be imposed. The fate of the account holder may be effectively determined at this initial stage of the inquiry. I will explore this more in a subsequent post which discusses Ms. Toth’s meeting with Mr. FBAR.

Note also that these three questions require the analysis of a deceptively large number of legal and factual issues.

What is the FBAR law and where is it actually found?

The Law Of FBAR In Its Most Simple “Form” (pun intended)- A Three Headed Monster

The law of FBAR is composed of three components which are found in three distinct places:

1. The Federal Statue found in Title 31 USC – Sections 5314 and 5321

2. The Treasury Regulation mandated under 31 5314 which directs the Treasury Secretary to create the FBAR rules https://www.law.cornell.edu/cfr/text/31/1010.350

3. The FBAR form itself.

In summary the federal statute (USC 31 5314) directs Treasury to create the reporting rules in the form of a regulation. The Treasury regulation creates the rules (incorporating the instructions on the form). When there is a violation of the rules prescribed in the Treasury Regulation, the civil penalties are determined according to the statute (USC 31 5321). Criminal penalties may also be imposed under USC 31 5322. In other words, the law of FBAR is an unholy alliance of a statute, a regulation and the form where the actual reporting takes place. (This post will focus only on the USC 31 5321 civil FBAR penalty.)

John Richardson – Follow me on Twitter @Expatriationlaw

Raymond James: A Permanent Investing Solution For Cross Border Individuals

Raymond James Crossing Borders Wealth Management Solutions

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Mr. LJ Eiben is a Financial Advisor at Raymond James.

The information in this podcast was obtained from sources RJA and believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views expressed are not necessarily those of Raymond James (USA) Ltd. Raymond James (USA) Ltd. (RJLU) advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered.

Raymond James (USA) Ltd. is a member of FINRA / SIPC

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Republicans Overseas Begins Its Support and Advocacy for Pure Residence-based Tax

This is an incredibly significant development. See the following posts on their Facebook site. They also have a new Twitter feed. Follow them at @RepOverseas.

Republicans Overseas position On What Pure Residence-based taxation means:

Tax Talk 1 – November 22, 2021

Tax Talk 2 – November 29, 2021

Tax Talk 3 – December 10, 2021

Tax Talk 4 – December 15, 2021

Tax Talk 5 – December 20, 2021

Tax Talk 6 – December 27 2021

Tax Talk 7 – January 3, 2022

Tax Talk 8 – January 21, 2022

Tax Talk – January 24, 2022

@AmChamCanada Presents: November 18/21: Work From Anywhere

Thursday November 18, 2021 – “Work From Anywhere” – registration link:

November Work From Anywhere Webinar Flyer

Further details:

On Thursday, November 18 from Noon-1:00PM, AmCham will be holding a webinar titled Work from Anywhere: Tax and Legal Considerations for Employers and Employees. This webinar, which was originally scheduled earlier this year and which follows from the successful webinar AmCham held addressing corporate tax issues, will analyze tax and legal matters that arise from the pandemic induced trend to have employees work from anywhere in the world.

This webinar will discuss pertinent topics in this area such as:

1. What are the recent trends regarding work from home arrangements in Canada and throughout the world?
2. What are some of the emerging issues associated with remote working arrangements? and
3. What are some of the practical steps businesses and executives may take to manage these risks?

The panel for this webinar features four knowledge leaders in the field of law and taxation.

They are:

* Michael Pereira, Partner, KPMG – Michael focuses on providing consulting and compliance services to high-net-worth individuals and senior executives with complex U.S. and Canadian tax issues. Michael specializes in intricate tax matters such as: 1) U.S. estate tax issues affecting U.S. citizens living in Canada and their U.S. citizen and/or U.S. resident children; 2) tax issues regarding foreign private equity structures, and 3) U.S. anti-deferral tax system for interests in foreign corporations, including the passive foreign investment corporation and controlled foreign corporation regimes. Michael is a Chartered Accountant and a Certified Public Accountant who earned a Masters of Science in U.S. Taxation from Wayne State University.

* Laura Tippett, Partner (Leader of Program Services – Regions East), KPMG – Laura has 15 years’ experience in Canadian and US personal tax and expatriate issues. Laura assists companies and their employees who are travelling cross-border, working with a variety of industries, including technology, defense, construction, consulting, energy, crown corporations and non-profit organizations. She works with employees who are on foreign assignment, travelling internationally on business, working remotely cross-border or relocating abroad. Laura has managed the Canadian/US expatriate programs for numerous multinational organizations, including overseeing several programs that have hundreds of Canadian-touching assignees annually.

* Kaley Dodds, Senior Manager, Employment & Labour Law, KPMG – Kaley’s is a management-side employment lawyer who represents private, public and institutional clients in a wide range of matters. Her practice covers employment, labour and human rights issues, ranging from litigation strategy, legal risk management, policy development, workplace training, to day-to-day employee relations and human resources advice. Kaley is called to the bar in Ontario and Alberta and has appeared before all levels of courts, arbitrators and human rights tribunals in both provinces.

* Ellen S. Kief, Principal and Managing Attorney at Kief Law – Ellen works with clients across Canada, the United States, and throughout the world addressing issues associated with U.S. immigration law. Ellen’s practice focuses on cross-border travel, business visas, investor visas, entertainment and sports, family visas, permanent residence and citizenship. Ellen is a national speaker and educator who has presented on numerous U.S. immigration topics including cross-border business travel, family immigration, inter-company transfers, and various types of immigrant and non-immigrant visas.

If you would like more information about this event, please see the flyer attached to this message. The flyer contains a link at the bottom where you may register to attend the event.

We hope you will be able to join us on November 18 for what should be a stimulating event. Thank you for your support of AmCham and its mission. Have a good day.

Registration link:

November Work From Anywhere Webinar Flyer

Yes, Naomi Osaka is Japanese. And American. And Haitian

Yes, Naomi Osaka is Japanese. And American. And Haitian

Netflix

Aoife Wilkinson, The University of Queensland

On Friday, Naomi Osaka lit the cauldron at the 2020 Tokyo Olympics opening ceremony. This honour sent an important message to the world: Osaka represents a diversifying Japan.

Yet, some still question whether she really is Japanese.
The question we should be asking instead is: who is Naomi Osaka, really?

Netflix’s new three-part documentary series attempts to answer this question. Director Garrett Bradley followed the tennis player over two years from her first grand slam win in 2018 to her third in 2020.

The documentary touches on her tennis career, her mental health and her call to change the format of post-match press conferences.

But it also gives viewers a closer look at Osaka finding her voice in the world as a young, mixed-race Japanese Haitian woman.

The difference between nationality and race

In the documentary, Osaka speaks about her decision to renounce her American nationality in 2019. Reflecting on the public’s response to her decision, she felt “people really don’t know the difference between nationality and race”.

She is right when she says there is a difference.

Nationality is a form of legal identification specifying our membership to a nation. Race refers to physical appearances, and is often described as a social construct: not determined by scientific fact, but rather by the social meaning collectively attributed to biological traits. To avoid uncomfortable conversations, some choose to use the word “ethnicity” instead of race, a term used to define groups based on invisible factors like language or customs.

Osaka holding a tennis racquet.
The documentary follows Osaka as she plays tennis, but also as she finds her way as a young woman.
Netflix

Despite the difference in their meanings, race, nationality and ethnicity are deeply interconnected in the ways we discuss identity.

Osaka was born in Japan in 1997 to her Japanese mother and Haitian father. She moved to the United States when she was three and grew up there as a Japanese-American dual national.

During the two years when the documentary was in production, Osaka celebrated her 22nd birthday. According to Japanese Nationality Law, dual Japanese nationals are required to renounce one of their nationalities before they turn 22.

For many, the decision to forfeit one nationality is tricky, uncomfortable and, where possible, avoided by dual nationals only showing their Japanese passport at Japanese airports.

In my research on mixed-race Japanese youth in Australia, participants told me their dual nationality opens up economic and personal opportunities for them to live or work in Japan without the restrictions of a visa.

But perhaps more importantly, the thought of forfeiting their nationality was a great concern for those who saw it as an intrinsic part of their identity.

In the documentary, Osaka says her decision to become a sole Japanese national was an obvious one. “I’ve been playing under the Japanese flag since I was 14”, she says. “It was never even a secret that I was gonna play for Japan for the Olympics.”

But while it was obvious, it wasn’t easy. Some people saw this renouncing of her American citizenship as a decision to forfeit her Black identity:

I don’t choose America and suddenly people are like, “your Black card is revoked”. And it’s like, African American isn’t the only Black, you know?

Despite choosing to become a sole Japanese national, Osaka is both Japanese and Haitian, and holds deep connections to America, Haiti and Japan. The film follows her as she plays for Japan, wears face masks to the US Open in support of the Black Lives Matter movement, and travels with her family to the Osaka Foundation — a school for Haitian children established by her parents.

Navigating identity and expectations

Osaka isn’t the only person facing interrogation into their identity.

Many people of mixed-race heritage often have a sense of “racial impostor syndrome”: the sense of doubt they feel when others question the authenticity of their mixed-race background.

It is common for young persons of Japanese background living outside of Japan to only be beginner to intermediate speakers of Japanese. Speaking about her self-confessed “broken” Japanese skills, Osaka worries she is “doing something wrong by not representing the half Black, half-Japanese kids well.”

But Osaka’s openness about these difficulties is exactly how the half Black, half Japanese kids need to be represented.




Read more:
When Naomi Osaka talks, we should listen. Athletes are not commodities, nor are they super human


It is important for us to challenge static ideas of race, ethnicity and nationality by sharing the voices of people of mixed backgrounds like Osaka.

Our identities are complex, and they change over time. There is more to being Japanese than fluently speaking the Japanese language, looking Japanese or holding a Japanese passport.

We shouldn’t forget who Naomi Osaka is. A strong tennis player, a passionate activist, and a mixed-race woman who represents contemporary Japan.The Conversation

Aoife Wilkinson, PhD candidate, The University of Queensland

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