Freedom of Emigration in East-West Trade, USC Title 19 § 2432

We have seen that the United States condemns Eritrea’s extra-territorial taxation of its citizens abroad.  But did you know that according to Federal Law, the United States would not be eligible for normal trade relations with the United States because of its expatriation exit taxes?


(a) Actions of nonmarket economy countries making them ineligible for normal trade relations, programs of credits, credit guarantees, or investment guarantees, or commercial agreements

To assure the continued dedication of the United States to fundamental human rights, and notwithstanding any other provision of law, on or after January 3, 1975, products from any nonmarket economy country shall not be eligible to receive nondiscriminatory treatment (normal trade relations), such country shall not participate in any program of the Government of the United States which extends credits or credit guarantees or investment guarantees, directly or indirectly, and the President of the United States shall not conclude any commercial agreement with any such country, during the period beginning with the date on which the President determines that such country—

(1) denies its citizens the right or opportunity to emigrate;

(2) imposes more than a nominal tax on emigration or on the visas or other documents required for emigration, for any purpose or cause whatsoever; or

(3) imposes more than a nominal tax, levy, fine, fee, or other charge on any citizen as a consequence of the desire of such citizen to emigrate to the country of his choice,

and ending on the date on which the President determines that such country is no longer in violation of paragraph (1), (2), or (3).

Hat tip: Punch My Ticket


15 thoughts on “Freedom of Emigration in East-West Trade, USC Title 19 § 2432

  1. @Petros- WOW!!! Now that is pure gold. So the U.S. by its own laws is actually ineligible to do business with itself. Excellent find.

  2. “Doublethink means the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.”

    – George Orwell

  3. Petros, I think the key phrase is ‘products from any nonmarket economy country’ In other words at the height of the cold war this was aimed at so called communist regimes. The US sees commies under every bed

  4. @KalC- if you have noticed U.S. rhetoric you will find that the U.S. has substituted Socialism for Communism in its world of economic systems that it hates. On numerous occassions I have heard Canada used as a pejorative by Republicans and watched Democrats do everything that they can to distance their social programs from anything that resembles Canadian or European Socialism.

    The U.S. does not want to live in a world of equals. They want to be the top dog who everyone fears.

  5. You are entirely correct. Interesting that Americans consider us socialists. They have no idea what the term means.

  6. Amusingly, one direct consequence of this law was that the USSR relaxed its emigration restrictions, enabling future Google co-founder Sergey Brin to come to the US — where he started Google without paying a single cent in taxes to Moscow, nor filing Form 926, 5471, 8832, 8854, 8865, 8938, or FBAR.

    The description that John Hancock left on the other thread looks more and more appropriate: “American refuseniks”.

  7. Well done Petros… This post has really gotten the attention of ACA, and they are now contemplating what and how they can use it. Excellent!

  8. @all: I’d like to take credit, but please note the hat tip to the blogger Punch My Ticket, who is the real brains behind this find.

    I found it because WordPress tell us our referrers, and another blogger on that page wrote about us the following (Comrade Nom Deplume):

    Finally on this subject, someone gave me a link to this website:

    Phil Hodgen, the California tax attorney I mentioned above, gave it his stamp of approval. Says it is spot on, particularly when it comes to the drudgery of dealing with the IRS’ OVDI.

    To me, many expat sites, particularly the escapeartist or sovereign society sites, had a whiff of carny fraud to them. I am coming to realize that it isn’t necessarily so, and that there are sites that are more or less decent sources of reliable information. Phil thinks this is one of them.

  9. This is a great recommendation comment to receive. And Petros, I really appreciate your willingness to give credit where credit is due.

    Also, this kudos from Phil requires us as bloggers to be very circumspect in our postings, try hard to separate fact from speculation and take our responsibility for dare I say, “fair and balanced,” posting seriously. To maintain our credibility, we need to work hard to keep our tone and rhetoric on an even keel, so we don’t get lumped in with those who have a “whiff of carny fraud to them”.

    So far, so good, and my hat is really off to all of you who started this blog. I am now using it a lot in references to my uninterested, could care less, Homelander friends!

  10. Haha funny article! “We can’t do business with people who do what we do.”
    Kind of like the Prisoner episode where he came up with the ‘control’ test for detecting the guards versus the prisoners then forgets that HE’s a controlling personality so he fails the test with the other members of his group. Oops!

  11. @recalcitrantexpat

    I remember many years ago while visiting an old friend, her husband came in and started to ridicule me about Canada, that “socialist” country…I couldn’t believe my ears. And this fellow is a lawyer. It was a little too much on top of the anti-Americanism up here. I thought, where can I go that no one will make some negative comment about me, where I live, or don’t live, etc. Even last November while “home” people were commenting on the fact Canada must be a socialist country because of our healthcare. I could not get them to understand that capatalism is alive and well here.


    just love that. “American Refuseniks.” I think I will use it as a way to reference my previous USC!

    @ all

    don’t know if any of you are aware of this but on Phil Hodgen’s blog, he has lost his Mom and won’t be around for a while due to family affairs. Just in case it’s appropropriate that any of you know him well enough to send him your condolences.

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