Commission releases documents on FATCA - Main contents
This week the European Parliament discusses the issue of FATCA: FATCA is US legislation against tax evasion and tax fraud. Every bank, insurance company or investment agency with activities in the US are obliged to give information of their clients whom reside outside the US, to the US authorities. Refusal is sanctioned with a fine. FATCA has therefore extra-territorial effect and is directly applied on EU-territory.
Personal information of EU-citizens, for example Europeans with a double nationality or with financial ties to the US because of study, work or family are being shared with the US without a proper justification, and without the possibility to object. An additional major problem is that so-called Accidental Americans, European citizens who have a link with the US because they were born there or studied there, are being denied basic financial services by banks in the EU, because these banks need to provide this information to the US tax authorities. Many of them only found out recently that they also have to pay tax in the US, while they also pay tax in Europe.
The Commission and national governments need to act against this extraterritorial US law. There is still a lot of secrery and and a lack of transparency of how the EU deals with this law. In 2012, Sophie in 't Veld requested access to documents regarding FATCA from the Commission. After initial refusal, because the Commission deemed it too much work to scrutinise all thousands of documents before disclosure, and intervention by the Ombudsman, the Commission published the relevant documents.
After a second request in May, the Commission released new documents:
Access to a fourth document, a letter from the Maltese Presidency to the US authorities that has been presented to the Council High level Working Party of 6 April 2018, is not given. "The release of the document would affect their decision-making process, since this sensitive issue continues to be discussed and any disclosure would seriously hamper the efforts to find solutions for it", is the Commission's argument. An appeal is currently lodged.