Israeli Supreme Court blocks FATCA enforcement
As any American who has tried to set up an overseas bank account knows, it's virtually impossible these days, thanks to the Obama administration's pushing FATCA through Congress. FATCA strong arms foreign countries into reporting to the IRS on bank and other investment accounts held by US citizens - including by US citizens who actually live in the countries where those bank accounts are held.
Israeli banks have long since barred accounts held by US citizens who don't live here. Those accounts were all closed several years ago. And for those of us who do live here, every account we open - including loan accounts whose proceeds are to be used in Israel - requires filling out a W-9 to report our social security numbers.
One Israeli Supreme Court Justice has stepped into that breach. Hanan Meltzer, who never hesitated to challenge the Israeli government when he was in private practice, has issued an injunction stopping the Israeli government and banks from turning over information about US citizens to the IRS, and is holding an emergency hearing about it on September 15. Will his actions become
a model for other countries?
“Justice Meltzer’s action should be championed,” deVere’s Green asserts, who is an outspoken critic of FATCA. “His wise caution should serve as a wake-up call for other countries to rethink enforcing this toxic, flawed, damaging legislation that is being imposed on sovereign states around the world by the U.S.”
...
FATCA could indeed be described as a “masterclass” in fiscal imperialism and unintended consequences. But also of concern is that the US is increasingly secret in matters of financial data. It’s no wonder some have labelled it “horrific” and a nightmare for financial institutions.
...
Perhaps unsurprisingly there a growing trend and an overwhelming number of U.S. citizens are giving up their American citizenship (citizenship abdications), which has been revealed by the U.S. Treasury Department.
And, according to a survey conducted in early 2015 by deVere itself almost three quarters (73%) of Americans living overseas expressed the view that they were tempted to relinquish their U.S. passports.
They also found when canvassing over 370 its American expatriate clients that just under half (48%) would vote for a Presidential candidate who seeking FATCA’s repeal. This was against 29% saying ‘No’ and 23% ‘Don’t know’. So, that would seem to sufficiently take the pulse on US expat thinking.
Perhaps it had something to do with the fact that many U.S. citizens cannot even now hold a bank account in their country of residence since foreign banks routinely feel Americans are too much trouble due to FATCA’s onerous and costly rules in order to comply with and take them on as clients.
As regards the cost to banks around the globe to implement FATCA it has been suggested that it will run to billions of dollars a year.
...
Instead, he says what it does – due to its plethora of serious unintended adverse consequences – is to brand the some seven million Americans who choose to live and/or work overseas, including many of the 300,000 in Israel for example, as “financial pariahs”.
U.S. expats are now routinely rejected from FFIs, such as banks in their country of residence, as result of FATCA’s costly and onerous regulations. The upshot is that in Green’s view Americans are now typically deemed “more trouble than they are worth.”
Rubbing the point in further he adds: “Similarly, American businesses working in international markets are now often branded with a leprosy-like status. Clearly, this can only be detrimental to their global competiveness and could, in turn, hit American jobs and the long-term growth of the U.S. economy.” Now that of course could well have far-reaching consequences beyond the US itself.
The Israeli High Court decision could represent a landmark moment in the fight to have what Green and others regard as a “controversial and damaging law that should be resigned to the history books.” It’s any guess whether Justice Meltzer’s latest action will encourage and influence more nations worldwide to reconsider FATCA.
I doubt it will influence the US - they're making way too much money off this. But it might convince an awful lot of US citizens to give up their citizenship (curiously, I know very few people in Israel who have, but have heard lots of stories of US expats in Europe giving up US citizenship), and it might convince some countries to try resisting FATCA. But no country will do it alone.
Labels: Barack Hussein Obama, FATCA, Supreme Court
Republicans Overseas in Israel files High Court petition against FATCA agreement
Republicans Overseas in Israel, which can legitimately purport to represent 85% of American voters living in Israel (based on the
results of the last elections) has filed a petition with Israel's High Court of Justice seeking to
stop Israel's banks from transferring required information to the Internal Revenue Service under FATCA. FATCA requires foreign financial institutions to disclose to Lois Lerner's IRS the value of all foreign accounts held by US citizens. US citizens who actually live abroad are up in arms about this because it means that we have to go through two regulatory systems in all of our dealings with local banks (example: I had to fill out a W-9 to show that I have a US social security number in order to get a car loan from an Israeli bank for my car in Israel last year).
If you're a US citizen who lives in the US you no longer have any foreign bank accounts - at least in Israel where long before the Bank of Israel signed an agreement with the IRS, the local banks forced all non-Israeli residents to close their accounts. That means that this is almost entirely about people who live in Israel by any definition.
ROI’s petition claimed that the new information sharing process is not
only beyond government officials’ discretionary authority absent Knesset
legislation, but also in violation of the Basic Laws which create
certain property and privacy rights defending against an automatic
transfer of personal data absent a reasonable chance to object
(currently there is no chance to object.)
In courts in many
countries, including now Israel, the argument is, that the FATCA law and
how foreign countries are implementing, means it functions as a dragnet
of massive amounts of private information which could be misused and
where there is no evidence of wrongdoing.
Zell explained that “we
are not saying the Israeli tax authorities are prohibited from
transferring information to the IRS or other foreign tax authority…where
there is a reasonable basis to suspect tax evasion.”
He said
that Israel can already do this under existing conventions and that the
problem is to “collect and transfer such data to foreign governments
without a showing of cause and without allowing the affected taxpayers
an opportunity to be heard before the information is transferred.”
The
equal treatment issue is that only dual US citizens are being treated
this way by the Israeli government, and not persons who are
dual-citizens of any other countries, let alone most Israelis who are
solely Israeli citizens.
The application is most “absurd” said Zell with cases of persons who merely have an American greed card.
But
so far other litigation against FATCA and its consequences have had
mixed results, with lawsuits in the US and Canada being initially
dismissed and currently pending appeal.
...
“If the Court addresses the merits of the case, I believe our chances
are quite good… The action of the Bank of Israel is highly problematic,
given that there was absolutely no statutory basis for its action…. The
Government Decision…directly infringe[s] upon fundamental rights and no
attempt was made to mitigate the damage,” stated Zell.
He also
said treating American-Israelis differently is “clearly
discriminatory…There is no easy answer to that... the Government simply
disregarded the privacy interests of the affected class, signed what is
effectively an adhesion [coercive] contract and paid no attention
whatsoever to the fact that the US Government…does not provide adequate
protection for private information,” confirmed he said by the European
Court of Justice and Israel’s Justice Ministry.
As Zell said,
“taxpayers have a fundamental right of privacy protected by Basic Law
and statutory law. The Government sought to nullify these rights with
the wave of a hand and the Knesset thus far has said no. We hope the
High Court of Justice will agree.”
I can only wish them luck.
Labels: Bank of Israel, FATCA, High Court of Justice, Internal Revenue Service, Israeli Knesset, Republicans
Report: Rubio a candidate for 2016 Republican nomination
Some of you may recall that for a while now, I've been saying that I'd find a Marco Rubio candidacy for the Republican nomination for President
very exciting. Now, reports ABC News,
it looks like it's going to happen (Hat Tip:
Memeorandum).
Leading the effort to raise the $50 million or more he’ll need to run in
the Republican primaries will be Anna Rogers, currently the finance director for American Crossroads, the conservative group started by Karl Rove that raised more than $200 million to help elect Republicans over the past two elections.
Rogers will begin working at Rubio’s political action committee on February 1 and would become the finance director of Rubio’s presidential campaign.
Rubio, 43, will gather on Friday and Saturday at the Delano Hotel in Miami with 300 supporters and major donors to his Reclaim America PAC to discuss his political future.
Aides expect Rubio will make a final decision in the comings weeks, but
his schedule for the next month already looks more like the schedule of a
presidential candidate than a senator.
ABC News has learned Rubio plans to skip all votes in the Senate next
week and instead take a campaign fundraising swing through California with events in Beverly Hills, Newport Beach, Rancho Sante Fe and Costa Mesa. He also plans fundraising stops in Texas and Chicago.
Rubio has also scheduled a book tour that will take him to all the early primary states. A senior aide to the
Florida senator tells ABC News Rubio’s book tour will include stops in
Iowa,
New Hampshire,
South Carolina, Florida and
Nevada. The first stop is tentatively scheduled for February 13 in Des Moines.
Here's wishing Marco Rubio all the success in the world. If you need someone to work on your campaign among American ex-pats in Israel (there are lots of us), please call. Promise to
repeal FATCA and you'll get lots of votes here.
Shabbat Shalom everyone.
Labels: FATCA, Israelis voting in US elections, Marco Rubio, Republican party, US presidential campaign 2016
