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FATCA AND THE JUDICIARY

Published: 
Sunday, February 5, 2017

The explanatory notes accompanying the The Tax Information Exchange Agreements Bill, 2016, read, in part, as follows:

“This bill seeks to implement certain tax information exchange agreements entered into between Trinidad and Tobago and other States. The bill contains thirty sections and may affect the rights of individuals to private life guaranteed by section 4 of the Constitution of the Republic of Trinidad and Tobago. As such the bill requires a three-fifths majority voting for passage in Parliament in accordance with section 13 of the Constitution.”

The bill explicitly states at Section 2 as follows: “This act is inconsistent with sections 4 and 5 of the Constitution” which confirms that it infringes fundamental human rights and freedoms. Two Sundays ago, I highlighted the fact that T&T is the only country in the Commonwealth Caribbean that has adopted the model of the Canadian Bill of Rights 1960 for its human rights chapter in its Constitution.

This clearly sets us apart for the enactment of FATCA legislation to comply with United States law. It must be noted that FATCA is not a free-standing act, but rather an insertion into the Hiring Incentives to Restore Employment Act (HIRE) (Public Law 111-147, March 18, 2010).

The overall effect of non-compliance by states around the world is that they may be subject to severe banking penalties. This has been cast in T&T in many ways that range from the comments of the former US ambassador to this country publicly talking about people having “cocoa in the sun” to “what is the opposition afraid of”.

The Office of the Prime Minister recently threatened the population with the possibility of economic inconvenience in their lives if Parliament does not comply with this US law. The OPM alert called for citizens to contact their MPs and tell them to support the legislation.

It is unfortunate that this twist has occurred because citizens are being asked to surrender their rights and their sovereignty because of the fear of the “Big Stick” of the United States. Using the United States as a convenience for carrying out a local political agenda is unfair.

The real issue that should be probed is that T&T has no guarantee that it will still not be subject to the US “Big Stick” even if it passes this law. That is because of the complete provisions of Section 13(1) of our Constitution which say as follows:

“An act to which this section applies may expressly declare that it shall have effect even though inconsistent with sections 4 and 5 and, if any such act does so declare, it shall have effect accordingly unless the act is shown not to be reasonably justifiable in a society that has a proper respect for the rights and freedoms of the individual.”

Section 13(2) makes provision for such a bill to be passed by a three-fifths majority in both Houses of Parliament. The bottom line here is that even though the proposed legislation makes a public confession at the outset that it is knowingly infringing your human rights and that in doing so, it requires a three-fifths majority, the reality is that the will of the parliamentarians can be overturned by a judge on the ground that such legislation is deemed to be “not reasonably justifiable in a society that has a proper respect for the rights and freedoms of the individual”.

What will happen to T&T if its independent judiciary from the High Court to the Privy Council were to overturn the FATCA legislation that is currently before the Parliament?

Are we going to bully our judiciary and tell them to just bypass the human rights implications in the same way as parliamentarians are being told to “just pass the dam bill”? As I have said before, there is an amazing lack of critical thinking on the implications of FATCA for T&T and the approach that is being adopted is that we have to live in fear of the American “Big Stick”. Why ?

While the political changes are taking place in Washington, DC, T&T does not have to go off to the races to complete this FATCA bill because the directive of the Obama Treasury Department may not be the same directive to be applied by the Trump Treasury Department. We should demonstrate some political awareness before we surrender a part of our national sovereignty to the United States.

The nominee for the position of secretary of the Treasury in the Trump administration, Steve Mnuchin, has had his nomination advanced out of the Senate Finance Committee to the floor of the Senate for a vote very soon. The nominee for the position of director of the Office of Management and Budget is following closely behind him. These two nominations are likely to be approved shortly by the Senate. Can we wait just a bit longer to know whether enforcement (as opposed to repeal) will or will not be on the cards for FATCA from the US end?

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