New Zealand Government position on FATCA

Here it is:

http://bsmlegal.com/PDFs/NZ.pdf

They don’t know quite what they want other than they want KiwiSaver plans exempted. JustMe and Moby might want to call their NZ MPs and have a word with them. They also claim to have extensive information sharing between NZ IRD and US IRS.

Perhaps you might want to have a word with Danie Beukman, Second Secretary at the New Zealand Embassy in Washington.

Another group I suspect might be interested in this letter I suspect would be the NZ Greens and NZ Labour.

Update: Call Danie Beukman on Monday. Really he works pretty closely with the US House Ways and Means committee. He is pretty active on Twitter also.

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20 thoughts on “New Zealand Government position on FATCA

  1. Thanks for the heads-up. Now that this has fully entered the consciousness of the NZ govt I will commence my letter writing. Let the games begin!

  2. Are you freakin’ kidding me? That’s it/!!! What about the fact that complying with FATCA would be illegal for NZ banks (per NZ banking assoc.

  3. Like I said they don’t know what they want. While I am curious as to whether Flaherty commented I think he knows if he wrote anything that weak MPs phone line would be ringing off the hook.

    To Moby

    I definately think the NZ Greens and NZ Labour might want to have a look at that letter.

  4. @Chester

    They didn’t actually say whether they would change NZ law or not or enter into an intergovernmental agreement. They said nothing really.

  5. The 2nd page was the best IMHO. They said that tax evasion with the tax-free funds were very low because people can only put money in there if they are perm. residents or NZ Citizens. So I don’t see any backing of the US claim on “citizenship taxation”.

    This FATCA is really so over the top, challenging national sovereignty. The only reason countries don’t speak out about it is because if they do, they will instantly be branded as harbouring tax evaders.

  6. Boy, that is a pretty meager and weak response, and all they care about is KiwiSaver. I would doubt that Mike Moore has any real idea of the FATCA scope or conflict with NZ Privacy Laws, as noted in this Feb 10th article by Interest.co.nz http://bit.ly/Ae13Sb

    “The deadlines for complying with various due diligence and reporting obligations have also been extended, in recognition of some of the difficulties raised by the industry, such as conflict of laws issues. For example, rules such as New Zealand’s Privacy Act can prohibit financial institutions from passing the required customer information to the IRS unless customers have contracted out of the restrictions.”

    I have sent off an email tonight to a journalist at NZ stuff.xo.nz, and in it I wrote…

    Do you think this meager submission adequately represents the position of the NZ government? Will the NZ Privacy Laws need to be altered to meet the FATCA requirements as noted in the Feb 10th story at Interest.co.nz ? Are there in Constitutional issues that will need to be addressed?

    Additionally from reading this one page submission, it would appear that the NZ government is quite happy to turn over to the IRS all data on “US persons” including those that are Kiwis living and resident in NZ, if they happen to also have greencards. That is what FATCA requires. The US has a concept of a “US person” which is more than just US citizens. Do you think the NZ government adequately understands that?

    Also, there seems to be no recognition of the fact that NZ taxes on residency basis, and the US government taxes on Citizenship and US person basis. This means that the IRS is essentially reaching into IRD tax resources in New Zealand to tax US citizens that are resident and paying taxes in NZ, and taking that revenue out of the country and back to the US. New Zealand does NOT have a similar practice or requirement of its citizens that live in the US. These methods of taxing are in absolute conflict.

    Eritrea has tried taxing its citizens offshore, and I think if you would look at recent Security Council Resolution 2023, the US joined in condemning this. Yet you will see that the US expects NZ to help it collect similar citizenship taxes from NZ soil. Why would they not allow it from Eritrea, but then expect to NZ to help raise a US citizenship tax from NZ residents and dual citizens who are living in New Zealand?

    Finally, nothing about this submission seeks to lesson the BIG cost burden put on the FFIs in NZ, and there apparently is nothing the current NZ government is intending to do to moderate that burden. All they are concerned about is KiwiSaver. I must say, I am somewhat surprised at the lack of opposition to these unilateral actions by the US Congress or the appreciation of what is happening here.

  7. @Just Me

    Danie Beukman
    @DanieBeukman

    This guy appear to in real tights with US House Ways and Means committee. He basically is NZ’s key guy on negotiating the Trans Pacific Partnership Trade Agreement in Washington. He put out a tweet how US House Ways and Means Chairman Dave Camp was jokingly saying he can see Canada from his backyard(interesting information I need to find where Dave Camp lives).

  8. @JustMe

    The point Mike Moore and Danie Beukman bring up is actually very valid though and after thinking about it more is actual more relevant to the circumstances of former NZ residents living in the US. In fact it is same point Phil Hodgen is making to the IRS on Monday which is there is absolute no reason for the IRS to be concerned from a disclosure perspective about things such as KiwiSaver, RRSP, SuperAnnuation etc even for US resident because once someone leaves the foreign country that aren’t making additional contribution, the money sitting in the account is tax free under the treaty in terms of gains, and there is`automatic information sharing with CRA, NZ IRD etc so the US is going to know when a withdrawal is made.

    This Beukman guy is pretty active online and seems to enjoying himself quite well in DC. He also seems to be a big cheerleader for the issues of NZ Community in the United States.

    http://www.linkedin.com/in/daniebeukman
    http://twitter.com/#!/daniebeukman
    http://daniebeukman.blogspot.com/

  9. Duh, I should have known to take the space out…
    Sent this..

    @DanhyieBeukman Why no opposition in the NZ Gov #FATCA submission due Privacy and Human Rights 1993 Act? Are you going to repeal them?

  10. @Tim… I understand the KiwiSaver issue well, and agree that it is a good argument, but why are they only asking for that? If that get that exception, does that mean that they will then rollover on all other issues and just ignore or repeal their own laws? That is what I am wondering about. They didn’t even ask for the 5 EU nation pack as a fall back.

    And what if the IRS says “NO” to their only ask? So what then is their reply, “oh, ok.. thought we would ask, but never mind, just kidding?” I am a little mystified by what if any strategy they are employing. Maybe you see something clearer than I. Maybe Moby does.

  11. @JustMe

    This actually getting worse by the minute one of the submissions from TD Bank in Canada indicates that Privacy Commissioner Stoddard believes some of the document archival provisions such as keeping storied images of peoples Drivers Licenses and SIN Cards’s could lead to identity theft among ALL Canadian banking customers whether or not they are US Persons. Great Just Great.

  12. @JustMe

    John Key really doesn’t have the votes to start changing laws without Green or Labour support. He has a one seat majority with ACT plus Revenue Minister Peter Dunne(I don’t know if John Banks given the libertarian bent of ACT would even go for it). So really he needs Maori, Green, Mana, or Labour support none of which will be there for FATCA no matter how badly the NZ Banks need it. Remember to many Green, Maori, and Labour MPs the two the proudest moments in NZ history are the nuclear freeze/ANZUS pull out and the reaction to Rainbow Warrior in which NZ basically told the two most powerful economic blocs in the world to go screw themselves.

  13. @Just Me

    France threatened an economic embargo of New Zealand’s exports to the European Economic Community if the pair was not released.[3] Such an action would have crippled the New Zealand economy, which was dependent on agricultural exports to Britain.

    In June 1986, in a political deal with Prime Minister of New Zealand David Lange and presided over by United Nations Secretary-General Javier Pérez de Cuéllar, France agreed to pay NZ$13 million (USD$6.5 million) to New Zealand and apologise, in return for which Alain Mafart and Dominique Prieur would be detained at the French military base on Hao Atoll for three years. However, the two agents had both returned to France by May 1988, after less than two years on the atoll. Mafart returned to Paris on December 14, 1987 for medical treatment, and was apparently freed after treatment. He continued in the French Army and was promoted to colonel in 1993. Prieur returned to France on May 6, 1988 because she was pregnant, her husband having been allowed to join her on the atoll. She, too, was freed and later promoted. The removal of the agents from Hao without subsequent return was ruled to be in violation of the 1986 agreement.[4]

  14. @Tim..
    I caught it right away, deleted the tweet and corrected, but since I can’t edit what I reply here, I am stuck looking silly. I thought I just copied and pasted what you provided, but somehow I screwed it up. Anyway, I did go look at his Twitter stream. He does seem to be enjoying himself, but not much too say. I have a good Kiwi friend “Farmer John” who knows that the Kiwis will get screwed by the TPP and so totally opposed. I have let him know the guy he should be worried about is smoozing with Camp and having a great time at the center of the universe. LOL

  15. @Tim and Moby..

    Speaking of the TPP, I thought this article in the NZ Herald today would be interesting to you…

    Headline: High-quality Pacific trade deal vital, says Key http://bit.ly/K5lwxl

    I told my friend Farmer John about Mike Moore’s FATCA submission and Danie Beukman working hard with Camp on the TPP.. Thought you might get a chuckle out of his reply.

    For sometime now, in my humble opinion, the USA has joined France in being one of the two most pigheaded and arrogant nations in the world as they swagger and roam the globe causing mayhem. The only one small redeeming feature that France has, is that they occasionally play good rugby!!

    As for Mike Moore, I already know that he is a “yank in drag”. I cannot believe that NZ hasn’t woken up to the fact just how much we are going to get done over by the USA. Much worse than the Rainbow Warrior terrorist attack by France.

    PS…How’s my very best girlfriend in Alaska (Sarah) getting on? Tell her I’ll take her out fishing and hunting any old time. 🙂

    So, Tim… I don’t know what your analysis is of this news story, but I have to wonder….

    Does Key think NZ needs a good TPP badly enough, that he would be willing to trade away NZ sovereignty and the 1993 Privacy and Human Rights laws to give the US a FATCA deal as long as KiwiSaver is excluded? That is more important than doing anything to mitigate FFI costs to comply. Might that be the trade for the agricultural agreement that seems to be important to Key? Same people involved in both negotiations, so you have to wonder. But, what do I know?

  16. The TPP is a complex story that involves Canada too. Here is a pretty good article that describes Canada’s the fighting that is currently going between Canada and the US over TPP.

    http://www.theglobeandmail.com/news/politics/john-ibbitson/being-a-spoke-in-american-trade-isnt-enough-for-canada/article2382331/

    I like the final sentence in the article. And increasingly there is another aim to Plan B: to show the Americans that Canada is no longer willing to be just another spoke.

  17. @Tim…

    Just catching up on news from down under. I see two articles in the NZ Herald on the TPP (Trans Pacific Partnership) and opposition from some prominent attorneys. Too bad those same attorneys are not worried about FATCA. NZ is giving away it’s rights too on FATCA just like TPP. America wants to rule everything. NZ Sovereignty is just a quaint idea, when you sign up with to deals with America. Might this shake a few Kiwis out of their slumber?

    Lawyers fight TPP right to sue Govt

    Sixty-one New Zealand lawyers are among signatories to an open letter to negotiators of the Trans Pacific Partnership trade talks calling for them to drop “investor-state” provisions which allow companies to sue governments directly over alleged breaches.

    Bryan Gould: Right to be troubled about secret partnership

    Getting lawyers to agree on anything is notoriously difficult. So when 100 retired judges, prominent legal academics, lawmakers and leading practitioners from New Zealand and overseas put their names to something, it’s time to sit up and take notice.

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