A Belgian agency ruled that the government’s sharing of Americans’ financial information with the IRS [Internal Revenue Service, the United States federal government, which is responsible for collecting U.S. federal taxes] under a US law violates European data protection laws.
The US Foreign Account Tax Compliance Act, or FATCA, requires reporting of foreign bank account information to the US agency.
The Belgian Data Protection Authority issued the ruling Thursday, saying sharing of this data in accordance with FATCA violated provisions in the EU General Data Protection Regulation, and it gave the Belgian government one year to bring its data-sharing into conformity with the GDPR.
- The authority initially blocked the sharing of data in 2023, in a case brought by the Accidental Americans Association of Belgium. A Brussels Market Court reversed the decision and sent it back to the authority later that year.
- The Association of Accidental Americans President Fabien Lehagre said his group welcomes the decision, which he said will stop the data transfers, but he decried the decision to give the government a year to comply. “Accidental Americans” are people who hold US citizenship by virtue of their birth but are established overseas.
- “Data protection cannot accommodate a political or administrative timetable,” he said. “Transfers must cease immediately.”
As a European living in the US, this might also mean that my European bank (that I intentionally didn’t leave when I moved, for reasons) will close my account.
I don’t think so. Why would they close your account? They might not share your data, but your account is still active imo, at least that’s my understanding here.
I don’t know the method by which my bank (which is European, indeed) could be punished by US if they didn’t share the data that IRS and FINCEN wants, true, at least if they don’t have any official activities in the US. I think I recall the was something about US strongarming every other country into effectively making FATCA reporting into local law? (Maybe that’ll change?) What else could US do? Designate officers of the non-cooperative bank as “money laundrers” and make their private lives hell on the international arena?
What I do know is that they (my bank) already is unhappy about the fact that I’m a “US person” and they’ve told me as much in person. They do not allow me to open new accounts. They do not allow me to do any trades beyond moving money between the savings accounts and use their bank card (which I do use when I’m in Europe). They would however allow me to close my accounts! Half their internet banking site is off-limits to me - it’s sometimes difficult to access documents like annual statements because the logical path to that part of the site got roped off!
I’m pretty sure they’re already looking for an excuse to cut me off.
Mind elaborating? Did they restrict your account specifically, or does the website simply treat logins from the US differently? I’m surprised you wouldn’t retain full cloud access so long as your account exists under the terms you signed up for.
I don’t understand why you would tell your Belgian bank that you left Belgium, particularly when your new residence is the US which flags you as a toxic asset that requires special handling. That could only work against you. Surely you would be better off not telling them you moved and use a VPN to Belgium to access your acct.
My home country is one of those with a residence registry, run by the government. The banks get their address data about me from this registry. Unless I were to hide from that government that I’ve emigrated, which is legally dicey from several aspects, including to whom I should pay taxes, I have no way of hiding my address from the bank. And lying about which country I’m in - and then wandering in to the consulate in US and ask about renewing my European passport… No thanks.
Yes, the bank restricts parts of their web portal to anyone they deem being a resident of the US. IIRC that might not even have been primarily due to FATCA (I moved about the time when FATCA laws were being implemented around the world, not sure if I moved before or after my country implemented it), but to a second US law, called the Dodd-Frank act.
Well, it wouldn’t require lying but certainly it seems tricky. You can deregister before you leave the country and neglect to provide an address for where you are going – because you wouldn’t necessarily know in advance and you cannot provide information that does not exist. So they clear your address from your id card which then just has an empty address.
Correct me if I’m wrong, but you don’t have a specific legal obligation to state where you live abroad.
Though one snag is that you have a legal obligation to vote in elections and you must vote in the nearest embassy, which requires giving an address to get on the voting roster. However, voting is not strictly enforced. If you fail to vote there is a small fine but I don’t think they actually hit unregistered people abroad with that. If you do not vote in 3 consecutive elections, then you could lose your voting rights for a few years, I think.
I do not believe the bank gets a notification that you have deregistered. But at some point your ID card on the bank’s files will expire and they will expect an updated copy and freeze your account until they receive it.
If you walk into an embassy to “renew” your passport, do they demand an address? I would think you would pick up your passport at the embassy a week later. Or do they mail it?
Anyway, I can understand giving in to surveillance and disclosing US ties, but OTOH it seems like a nightmare to do what’s expected as well… to be tagged as a toxic US person. It’s a mess either way. Perhaps the wisest move is to “move” to Canada, stay there a couple months, setup residency, then move to the US and just neglect to mention it. Get mail forwarding from Canada.
I should probably point it that I’ve never claimed to be Belgian - actually I’m not - so I’m not compelled to vote, though that’s still something I want to do. I’m just predicting that if a European court strikes down the Belgian law, my country’s FATCA law is perhaps not very likely to be deemed much more legally sound than the Belgian FATCA law. Though, IANAL. I might be overreacting.
In order to access my Internet banking service, I need a valid bank card of some variety (credit, or debit). My bank needs to know how to get a new one to me, once the old expires. (So far they’ve done this without complaints).
My country’s residency register does inform the banks automatically about my registered address. I cannot tell the government and expect the bank to not know (if the bank is incompetent enough not to know what to do about with that information, that’s a different story, and that is for a different day).
While I haven’t looked closely at what it would take to be allowed to take up residency in Canada, my impression is that it is quite difficult indeed. Add to that, that I’m married to an American with family connections near where we are living, and moving is even harder.
But of course they would, if the bank has subsdiaries inside Usa where they must observe their laws.
Well the subsidiary might be liable to share all data, but what if the subsidiary has no data, on purpose?
Bingo. This is true even across EU borders. Rabobank in Netherlands does not exchange info with Rabobank in Belgium, IIUC. (but note I think Rabobank quit doing business in Belgium eventually anyway)
If you owe money to the government, is it a good excuse then to say you don’t have any?
Given all the various “know your customer” rules, I suspect that argument wouldn’t fly.
That only prohibits dealing with sanctioned parties, and I doubt the US will start sanctioning EU banks over this.
There might be different implementations of these laws in different countries, but i can mention at least one country where "know your customer"applies to every single person they deal with, no exceptions.
Yeah, but the US subsidiary does not deal with that US citizen, the EU bank does. The US subsidiary might even know that that person is the customer of the EU bank, but might not know the details of their bank account, like one bank doesn’t necessarily know the details of other bank accounts. If you were a sanctioned individual and the EU bank deals with you, the US subsidiary would have to cut the EU bank off, but that does not mean that the EU bank has to transfer all data about all accounts to the US subsidiary beyond whether they deal with you, and even that is only if you are on “the list”.
I mean it works like this at EU banks, they have a responsibility to give data to the tax office of the country you are tax resident of, but not all tax offices even in the EU. If I’m an Italian citizen residing long-term in Spain, and thus being a tax resident of Spain, the (likely Spanish) bank will have to provide all banking details to the Spanish tax office. The Italian tax office however has no such right, even though I’m an Italian citizen.
Spain and Italy: you’re most likely correct.
When US is involved: there are special rules. Every country in Europe has an agreement with US that they’ll write their own law that compels all local banks (not only banks which does business in US) to tell US authorities about any customer that US considers to have some form of connection with US. This case appears to be about the Belgian edition of this set of laws.
Huh, Wikipedia has a blurb about the Belgian process of implementing this law, back in 2014-2015: “the Belgian Ministry of Finance orally confirmed that the IRS agreed to delay the FATCA reporting deadline. Belgian financial institutions now will have until the 10th day following the publication of the Belgian FATCA law into the Belgian official gazette to report their 2014 FATCA information to the Belgian tax authorities. The Belgian FATCA law is expected to be voted on before 2015 year-end.” [https://en.m.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act], the section about ‘Delays in implementation of IGAs’.
Ah, then yes. I just understand @BullishUtensil’s comment that their bank is European. I am not sure, though.
A subsidiary in US, or a subsidiary in any non-EU country that doesn’t feel bound by this verdict to remove any domestic laws compelling banks to report on their customers.
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Not sure why the downvotes.
Without getting into details, this is a bank that has already been in hot water for having closed customers’ accounts because the bank didn’t approve of the customers’ new addresses. Some of those cases didn’t even involve US.