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THE FATCA RESET
Last week, it was revealed that Opposition Leader Kamla Persad-Bissessar wrote to then president-elect Donald trump on January 13 to inquire about the position of his incoming administration on the issue of FATCA.
The letter appeared to be a response to (i) the request that she made of Prime Minister Rowley in correspondence sent to him at the beginning of the year for him to do so having regard to the change in Washington and (ii) the rejection of this position by Finance Minister Colm Imbert in Parliament on January 6.
The letter was copied to Steven Mnuchin (treasury secretary nominee), Mick Mulvaney (director of Office of Management and Budget nominee), Reince Priebus (incoming White House chief of staff), Senator Rand Paul (R-Kentucky), Representative Mark Meadows (R-North Carolina), outgoing US Ambassador John Estrada, and T&T Ambassador in Washington, Anthony Phillips-Spencer.
The letter is very timely as the Joint Select Committee of Parliament is currently addressing the FATCA legislation, while on January 20, Donald Trump became President of the United States bringing with him the reality that there is likely to be a change of policy on FATCA.
In my column on Christmas Day, I highlighted the fact that the Republican Platform 2016 adopted at the Republican Convention in Cleveland last July stated the following at page 13 under the heading “The Fourth Amendment : Liberty and Privacy”:
“The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause.
Americans overseas should enjoy the same rights as Americans residing in the United States, whose private financial information is not subject to disclosure to the government except as to interest earned. The requirement for all banks around the world to provide detailed information to the IRS about American account holders outside the United States has resulted in banks refusing service to them. Thus, FATCA not only allows ‘unreasonable search and seizures’ but also threatens the ability of overseas Americans to lead normal lives.
We call for its repeal and for a change to residency-based taxation for US citizens overseas.”
FATCA is not a stand-alone piece of legislation as it was included in the Hiring Incentives to Restore Employment Act as Title V of that Act (Public Law 111-147, March 18, 2010). It was simply inserted into the legislation and never received the usual floor debate, was never voted out of committee as a free-standing bill, no amendments were offered, no cost-benefit analysis was done, and it was not drafted in the usual legislative manner.
One of the people copied on Persad-Bissessar’s letter was Reince Priebus who is now the White House chief of staff. Prior to taking up this job, he was Chairman of the Republican National Committee. On July 17, 2015, he issued the following statement on FATCA in response to a lawsuit filed by a group called Republicans Overseas Action (ROA) against FATCA:
“FATCA violates several of the constitutional rights and protections afforded to overseas Americans. Without these protections, Americans abroad are subject to arbitrary discrimination by foreign banks. By filing this suit, ROA is boldly speaking up for the financial rights of Americans around the world. If successful, their lawsuit will provide expats with both immediate injunctive relief as well as the security of knowing that the Treasury department is unable to enforce these crippling provisions.”
Priebus has the ear of the President and runs the White House. It is absolutely imperative that the Parliament of T&T get some indication from Washington about the approach of the Trump administration to FATCA before legislation violating human rights is enacted here.
In the Journal Tax Notes International Vol. 69, No. 6, Feb. 11, 2013 Prof Allison Christians of Mc Gill University in an article entitled “The Dubious Legal Pedigree of IGAs (And Why It Matters)” said this in the abstract:
“When Congress enacted the Foreign Account Tax Compliance Act in 2010, it made no mention of any internationally-agreed alternative to its enforcement, and Congress has made no authorization since then for the president to override FATCA’s statutory provisions by international agreement. Yet due to difficulties in implementing FATCA, Treasury has entered into several ‘intergovernmental’ agreements (IGAs) to essentially bypass the hurdles, even going so far as to draft model IGAs with the intent of streamlining their enactment globally. This column examines the nature of these agreements and concludes that their legal pedigree is tenuous as a constitutional matter.”
Why is there so little critical thinking on this locally? Why is everyone being led to believe that the “Big Stick” policy of the Obama Treasury Department that threatened us with 30 per cent banking penalties will be the same for the Trump Treasury Department? The Platform of the Republican Party is anti-FATCA.
This FATCA legislation is likely to become redundant with an executive order to disable all IGAs worldwide. So why the big rush here in the face of a FATCA reset? Is there another reason behind infringement of human rights and data protection?
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