Today, 4th July, as Americans around the world celebrate Independence Day, the chief executive of one of the world’s largest financial advisory firms has slammed the U.S. government for its “fiscal imperialism” and its “complete disregard for 7.6 million American expats.”
The damning assessment from Nigel Green of deVere Group is in response to Washington’s implementation this week of the Foreign Account Tax Compliance Act, or ‘FATCA’.
FATCA, a global tax law that formed part of the Obama administration’s 2010 HIRE Act, requires all non-American financial institutions internationally, including all banks and insurance companies, to report to the IRS the hitherto private financial details of any of their U.S. clients who have accounts containing more than $50,000.
The official aim of the legislation is to try and combat tax evasion, although its opponents claim FATCA will be highly ineffective at achieving this objective.
Ever since FATCA was first mooted, there has been global opposition to it, with Nigel Green being one of the most outspoken critics of them all – as is evidenced in this video he recorded yesterday.
Speaking to iExpats.com, Mr Green says: “It seems ironic that as people across the States and around the world roll out the Stars and Stripes bunting and flags, parade the streets and enjoy quality time with family and friends today to rightly mark America’s independence, just three days ago the country’s government unleashed its fiscal imperialism on a scale never seen before in the form of FATCA.”
He explains: “On Tuesday, in an effort to purportedly catch a minimal number of tax evaders, America has – solely because it can due to its ‘superpower’ status – imposed its rules on the wider world.
“Those who fail to comply with America’s FATCA demands will suffer huge penalties and be, in effect, frozen out of the critical U.S. markets. As such, countries had no choice but to sign an intergovernmental agreement with the U.S. that insists that their financial institutions fall into line on this issue.
“Essentially, the American government has bullied foreign governments and foreign companies into following its fiscal regulations on foreign soil. Other countries’ sovereignty has been overridden and this demonstrates a remarkable arrogance.”
Whilst Nigel Green is keen to vocalise his thoughts on FATCA’s overreach in terms of “violating sovereignty”, it is the law’s impact on American expats that is his main area of concern. This is perhaps unsurprising considering his organisation specialises in wealth management solutions for expatriates.
He comments: “FATCA has turned the 7.6 million U.S. citizens who happen to live and/or work outside America into financial lepers. Why? Because non U.S. banks and indeed all foreign financial institutions are now, more often than not, rejecting doing business with Americans or anyone connected – through marriage or being business partners for example – to an American.
“They are branded as ‘too much trouble’ because compliance with FATCA is costly and lengthy. As American expats are now routinely finding out, being in a country without access to a bank or an insurance company is extremely difficult.
“The U.S. government has, in my opinion, shown complete disregard to these American citizens.”
He concludes: “Like many others, I am calling for fatally flawed FATCA to be repealed and I salute those heroic groups and organisations which are currently preparing legal challenges to achieve this.
“Perhaps next year on 4th July, as America celebrates its unshackling from a formerly imperialistic Britain, we can also resign its own imperialism, albeit its fiscal imperialism, to the history books too.”