Europe’s ‘accidental Americans' react to EU commissioner’s FATCA letter response

The letter, from European Commissioner for Economic and Financial Affairs Pierre Moscovici to Dutch European Parliamentarian Sophie in ‘t Veld, was in response to a letter she’d sent to him last month, calling on him to start taking the problems that accidental Americans are facing in Europe, because of FATCA, “seriously,” and telling him to “stop hiding behind excuses.”

In a three-page response that made the rounds of Twitter and Facebook overnight (pictured above), Moscovici dealt with in ‘t Veld’s points in turn, but in essence argued that “the recent worldwide movement towards tax transparency, in an effort to ensure that tax avoidance and evasion can be reduced and that every taxable person pays their fair share of taxation” meant that citizens needed to “accept that providing sufficient data, such as TINs [Tax Information Numbers, a problem for accidental Americans who have never lived in the U.S., as these will be required by European banks of all EU account-holders from 1 Jan. 2020] is necessary.”

“In the case of FATCA, like you, I very much regret that the amount of information that flows from the U.S. to the EU member states under their bilateral agreements is less than flows in the opposite direction,” Moscovici added, before going on to detail how the matter had been raised "on several occasion with my U.S. interlocutors," and suggesting that these efforts were continuing. 

In the same way, he said, he had "raised the issue of the reported difficulties some [American] citizens [resident in Europe] have obtaining U.S. TINs or Social Security numbers; and for those wishing to revoke their U.S. nationality, difficulties in doing this.

"On the latter, officials have said they will look into how revoking U.S. citizenship could be made easier," he added. 

'Unacceptable'  

Fabien Lehagre, a Paris-based "accidental American" who founded and heads up a rapidly-growing European group which calls itself the Accidental Americans Association (l' Association des Américains Accidentels), told Moscovici in a LinkedIn posting today that his reply to in't Veld was "just unacceptable."

"It was you, when you were  [EU] Minister of Finance, who signed the agreement to improve compliance with international tax obligations and to implement FATCA," added Lehagre, whose association, as reported, filed a legal complaint in March against a number of French banks, alleging that the banks are actively discriminating against French citizens who also happen to have American citizenship, in violation of European banking laws.

"Because of FATCA, according to the European Banking Federation, 300,000 Europeans will have their bank accounts closed on 01/01/2020 because they do not have SSN/TIN, and your only answer is to say that for you 'this obligation does not seem unreasonable'.

"In our discussions, however, I told you that most accidental Americans had never had this number, [which was] made mandatory in the United States only since 1986. So why this answer?" 

Lehagre was referring here to talks he held last year with Moscovici, during which talks the photo, left, of him with Moscovici, was taken.

Added Keith Redmond, another French/American dual national and outspoken campaigner on behalf of American expat rights: "Moscovici's response gives a green light to his support for the U.S. as a major tax haven, with non-reciprocal FATCA and no CRS participation by the U.S.

"Therefore, all EU citizens can hide money from EU countries’ tax authorities in states like Delaware, and in U.S. real estate holdings.

"Hence the US gets a pass by Moscovici and the European Commision vis-à-vis tax haven status.

"Tax Haven America is alive and well." 

Vow to 'keep pushing'

For her part, in 't Veld is vowing to "of course keep pushing" on the issue of FATCA, which she said she has been pursuing, on behalf of constiuents who sought her help, since 2012.

"I was not surprised by the commission's refusal to take action – to my regret, I note that is consistent with their attitude so far – but I was surprised by the denigrating tone of the letter," she told The American Expat Financial News Journal,  in an email today.

"So far Mr. Moscovici seemed to be rather open to the matter, but his letter seems to downplay the problem by referring to the low number of formal complaints, and there is even innuendo about 'accidental Americans'  trying to dodge their fiscal obligations. It is quite offensive.

"His claim that there is nothing wrong with the system of citizenship-based taxation is quite preposterous. When Eritrea chased down its citizens for the same reason, there was general indignation in Europe, not that I would liken the U.S. to Eritrea.

"The real problem is of course the blunt refusal by member state governments, with the exception of the Netherlands and France, to stand up for the rights of their citizens."

In 't Veld said what was important now was for "all people who are affected by FATCA to make themselves heard.

"File a complaint, with the data protection authorities, and/or the banking oversight bodies; join one of the associations that has been formed, inform your MP and/or MEP, use social media and traditional media, to make the message heard." 

Undercurrent of 'looming confrontation' 

One of the elements of Moscovici's letter that is likely to be examined with interest is the uneasy relationship between most of the world, which is adopting the OECD's Common Reporting Standard, in order to automatically exchange account information, and the U.S., which is holding fast to FATCA. As reported here in December, a growing number of experts see this matter become more of an issue over time, as more countries demand that the U.S. join the rest of the world in exchanging exactly the same data that they are providing the U.S. authorities.

On the other hand, some point out, the U.S. is still not fully onboard with the International Financial Reporting Standard, after decades of talks aimed at "converging" the U.S. system, known as U.S. GAAP, with the IFRS.