U.S. law professor: “FFIs turned out to be Treasury’s best lobbyists for #FATCA” – @Cdnbankers

The above tweet which references a comment at the Isaac Brock Society is worthy of it’s own post. The comment includes:

Need more reason to support this challenge and fund the fight against FATCA in Canada and around the globe?

Came across this fulltext of a July 2014 article from Tax Analysts – which contains several important points and helpfully remind us of things we might already have known, but that are confirmed here.

This point is interesting in light of this legal challenge:
“…within Treasury there was discussion about whether there were going to be conflict of law issues
and how best to address them. Interestingly, the absence of an explicit intergovernmental cooperation provision in the bill, in combination with the broad general grants of authority provided
by the statute, turned out to work, Grinberg said.He added that if Congress had inserted an intergovernmental cooperation provision, and if it had been broad enough to allow Treasury to exclude specific countries entirely from the scope of FATCA, it could have opened the floodgates for many countries to ask for that treatment, and the politics and implementation could have been impossible…..”…

So, Congress spoke – and there was to be no special consideration of Canada – with which the US already had the most extensive bilateral tax treaty. A signal that in the view of Congress, and eventually as signalled by the Harper government, whatever the impact on Canada and Canadian citizens and residents was fair game – as a Canadian Conservative MP lectured us in the Bill C-31 hearings – the Conservative party of Canada followed their US political masters; “Congress has spoken” said MP Mike Allen

http://openparliament.ca/committees/finance/41-2/32/mike-allen-1/ .

Also, confirmation and reminder of why we shouldn’t give banks (which are referred to as “FFIs” Foreign Financial Institutions” in FATCA speak) as Canadian CBA members any access to our savings and our business. Contradicts the CBA’s preferred way of re/casting their role – which was to put all their efforts into lobbying the Harper government to sign a FATCA IGA, in spite of Finance Minister Flaherty’s initially strong public opposition (on record for posterity in his letter printed in some Canadian media – but not in the US);
The article says:

“……. it was FFIs themselves that turned out to be Treasury’s best lobbyists for FATCA, Grinberg said. He said that once the FFIs accepted that FATCA would not be repealed, they started pressuring their governments to help them. ‘‘Do something that is illegal for you to do under
domestic law or Uncle Sam whacks you. That really put financial institutions between a rock and a hard place,’’ Grinberg said…..”

Volume 75, Number 1 ■ July 7, 2014
‘FATCA: From Bold Idea to Reality’
Tax Notes International
http://www.taxanalysts.com/www/website.nsf/Web/InternationalTaxNews/$file/tnisample.pdf

It’s interesting how the Tax Notes article confirms two important points out the Canadian Banks

1. Not only did the Canadian Banks NOT lobby for the repeal of FATCA, but

2. The Canadian Banks actively lobbied the Government of Canada for the FATCA IGA.

At their cores, it’s clear that the Canadian banks were happy to hurt Canada to help themselves. What they don’t realize is that have surrendered their businesses to the United States with all the “long term” consequences this entails.

Clearly the Canadian Banks and the Government of Canada do not subscribe to the wisdom of Benjamin Franklin:

The moral of the story is captured by Badger on the Isaac  Brock Society:

@Tricia, I am hoping that readers are motivated to fund the ADCS challenge if they haven’t already done so – they can choose their most pressing reason out of the many and various.

Readers should understand that the legal impediments to FATCA were very clear to the US (and the IGA signatories like Canada), from the very beginnings – yet they hoped that US might and extortive means, bank lobbying, and the lack of any voice or political representation in the US and here at home, would let them roll FATCA right over us. They CHOSE to hurt all of us and to make no exceptions for their closest ally and neighbour. Congress, Treasury, Obama, and other US politicians CHOSE to harm Canada and Canadians and try to extort our legal local assets via threat and force. Canadian representatives of the Conservative party, Harper and his minions, CHOSE to assist the US to harm ordinary Canadians – and subvert our Charter and Constitution.

Little did they anticipate that opposition and legal challenges would get this far – in Canada, and in the US.

Our cause is just!

And to that I would that:

The collaboration of the  United States of America, the Canadian Banks and the Harper Government to impose U.S. taxation on Canadian citizens who are resident in Canada – based on the immutable characteristic of place of birth – is unjust!

John Richardson

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