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
"Now even the common Swiss citizen is having to routinely prove to his bank that he/she has no holdings in the US" https://t.co/HpH7Sd9AkT
— Citizenship Lawyer (@ExpatriationLaw) February 7, 2016
FATCA and French citizens resident in the USA
Français des Etats-Unis, ils sont privés de compte bancaire en France – French Morning https://t.co/zHRsqbxgqQ via @frenchmorningNY
— Citizenship Lawyer (@ExpatriationLaw) February 15, 2016
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:
- FATCA forces French banks to hunt for customers with U.S. indicia.
- 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.
- Because of a U.S. address or phone number, he washes up the shores of the “FATCA inquisition”.
- He is threatened with account closures and all the other disabilities that are common in Europe.
- He may not be able to pay his bills because of the FATCA related bank account problems.
- He may or may not be required to file U.S. taxes.
- If he is required to file U.S. taxes, he may or not be filing U.S. taxes.
- Either way he has a problem with his French bank.
- If he has a Green Card and attempts to move back to France, he may be subject to the S. 877A “Exit Tax”.
- 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.
* Here is the current attempt by Google to translate the French article: