As noted previously, FATCA (the “Foreign Account Tax Compliance Act”) cannot succeed unless the U.S. Treasury Department is successful in coercing a sufficient number of countries into enforcing this foreign (i.e., U.S.) law on themselves. The key mechanism for doing that is to impose legally questionable “intergovernmental agreements” (IGAs) that effectively gut the sovereignty of the “partner” country and force indiscriminate turnover to the IRS of personal financial information in abrogation of national privacy and data protection laws, all under false assurances of reciprocity.
On Monday, October 7, RepealFATCA.com filed a request under the Freedom of Information Act (FOIA) with Treasury to provide copies of records in connection with negotiation of IGAs with the governments of Canada, Switzerland, and the United Kingdom. The request covers “all departmental records (paper or electronic) concerning communications (emails, paper correspondence, or records of in-person meetings) between Treasury officials and officials of the three foreign states indicated above relevant to negotiation of IGAs with such foreign states, as well as departmental records concerning worldwide implementation of FATCA that may be relevant to the IGAs with any of the three foreign states indicated.” (The full text of the FOIA request is provided at the end of this bulletin.)
The RepealFATCA.com request comes at a crucial time. Of special note:
Canada: As previously reported, Murray Rankin, the “Official Revenue Critic” of the progressive New Democratic Party (NDP), the chief Opposition party to the Conservative government of Prime Minister Stephen Harper, has written to Finance Minister Jim Flaherty urging rejection of any IGA with the United States that isn’t an equitable deal or that violates the rights of Canadian citizens and residents. The NDP’s Shadow Prime Minister, Tom Mulcair, has since upped the ante in a letter to voters, endorsing Rankin’s stand and even mentioning the dreaded “S”-word: “sovereignty”! Effectively outflanked on populism, human rights, and Canadian sovereignty by the NDP opposition, Flaherty – who doesn’t hide his dislike for FATCA and for Treasury’s intransigence – and the Harper government find themselves in a difficult position. It is not clear how they can rescue a Canadian IGA (no matter how much pressure some powerful financial interests might apply), and at this point they may not want to. More importantly for FATCA’s evident global infirmity, it is even less clear how Treasury credibly can move FATCA without Ottawa’s capitulation. A public protest against FATCA will take place on Parliament Hill on October 16.
Switzerland: On October 3, a group of citizens’ organizations launched a drive for a referendum to nullify the non-reciprocal IGA with Switzerland, which has already been approved by the Swiss parliament. While reported in French, German, and Italian language Swiss media, little has appeared in English and details are still sketchy. The organizations need to collect 50,000 signatures, which is considered doable, for a national referendum in early 2014 to overturn the Swiss IGA. If the signatures are successfully collected and the vote takes place, there’s a good chance the IGA would be voted down, annulling it under Switzerland’s unique brand of direct democracy. The result would be that one of the few significant financial centers that Treasury had considered “in the bag” would be – poof! – back out, for good.
Despite legal exceptions for protected materials, FOIA requests have been used to good effect (by groups like the Electronic Frontier Foundation and the Electronic Privacy Information Center) even on as sensitive an international topic as NSA surveillance programs – a related matter, since FATCA data provided to the IRS would be passed on to U.S. intelligence agencies. Treasury has little excuse to withhold information indicating what promises and threats have been made behind closed doors, hidden from the American and international public, to induce reluctant foreign governments to sign one-sided FATCA “deals” that will cost their consumers hundreds of millions, if not billions, of dollars to pay compliance mongers ready to cash in. (For example, the view of one Miami tax attorney: “From the perspective of a U.S. international tax attorney, we love FATCA for four reasons: complexity; uncertainty, with all the changes since 2010; change, with all the amendments and reforms to the law; and fear-mongering.”)
Finally, as illustrated by the situations in Canada and Switzerland, the RepealFATCA.com request comes at a time when the wheels seem to be coming off the entire IGA process in the face of grassroots citizens’ resistance (even taking into account an announcement that Paris would sign an IGA on October 11 – but according to unconfirmed reports has been delayed by the partial U.S. government shutdown!). This was tacitly admitted by Treasury’s issuance of a purported “myth”-busting analysis last month, a stack of tall tales that has been thoroughly debunked. (See Lynne Swanson and Victoria Ferauge, “FATCA Reality Check,” Tax-News, October 9, 2013; and “FATCA: We Are Not Myths,” OpEdNews, October 6, 2013).
James George Jatras
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The full text of the FOIA request letter follows:
October 7, 2013
Freedom of Information Act Request
Freedom of Information Officer, Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
VIA EMAIL and U.S. MAIL
Dear FOIA Officer:
This is a request filed under the Freedom of Information Act seeking copies of records in connection with negotiation of “intergovernmental agreements” (IGAs) by the U.S. Department of the Treasury (hereinafter, “Treasury”) with the governments of Canada, Switzerland, and the United Kingdom providing for implementation of the Foreign Account Tax Compliance Act (FATCA) in those countries.
Please provide copies of all departmental records (paper or electronic) concerning communications (emails, paper correspondence, or records of in-person meetings) between Treasury officials and officials of the three foreign states indicated above relevant to negotiation of IGAs with such foreign states, as well as departmental records concerning worldwide implementation of FATCA that may be relevant to the IGAs with any of the three foreign states indicated.
Date range of this request: (a) From the earlier of January 1, 2012, or the time prior to the February 8, 2012, “Joint Statement” with the United Kingdom and four other European states (found at http://www.treasury.gov/press-center/press-releases/Documents/020712%20Treasury%20IRS%20FATCA%20Joint%20Statement.pdf ) when the Treasury Department began preparations for contact or communication with officials of the United Kingdom in relation to such “Joint Statement”; (b) to the date of this request.
Request for “news media” status: As editor of RepealFATCA.com, I am a “representative of the news media” for fee waiver purposes as “any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience.” Based on my status as a “news media” requester, I am entitled to receive the requested record with only duplication fees assessed. Further, because disclosure of this information will “contribute significantly to public understanding of the operations or activities of the government,” any duplication fees should be waived.
Request for Expedited Processing: This request warrants expedited processing because it is made by a person primarily engaged in disseminating information, and it pertains to a matter about which there is an urgency to inform the public about an actual or alleged federal government activity. This urgency is particularly applicable to Switzerland, where a public referendum is pending, and to Canada, where IGA negotiations reportedly have reached an impasse.
Mode of delivery: To facilitate the timely fulfillment of this request and to moderate Treasury’s burden of paper documents, any portion of the requested records which Treasury may have in electronic form may be emailed to me, with the rest sent by U.S. mail, per the contact information appearing above.
Please acknowledge via email your receipt of this message, and indicate an anticipated timeline for fulfillment of this request. Thank you in advance for your prompt attention to this matter.
James George Jatras