Foreign banks freezing out U.S. millionaires

Here is a Washington Post article that just broke that seems to contain a lot of text that we have already seen at sources like Bloomberg and WSJ.  Nothing really that new.

Foreign banks freezing out U.S. millionaires

The comments page is interesting: there is one remark mentioning the fact that FATCA-level reporting is not required of American banks.  Perhaps IBS members could put some comments there.

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25 thoughts on “Foreign banks freezing out U.S. millionaires

  1. I couldn’t read the whole article because it is asking for registration… What they didn’t say on the first couple of pages that this is happening with middle class US Persons as well.

    They DID say that Asia has the fastest growing amount of millionaires. Interesting, isn’t it? Wealth is being transferred to Asia and NOT the US. Depsite the author mentioning this, I doubt it would ever change US stubborness. They will always think the US is the only place someone can make money.

  2. @geeez you can do a free registration, registration to post comments is also free. Once again, I agree that wealth will be transferred OUT of the US.

    I think everybody at IBS really needs to “hammer” all of the major US press sites with well thought comments to every FATCA, FBAR, Double Taxtion, OVDI, etc. issue related article. Where possible with links back to IBS, ACA, Hodgen, Mopsick and/or any others the individual IBS participant finds important.

  3. Jefferson, I don’t register for the sites because I’m an extreme pessimist on the situation US Persons abroad 🙂 I can’t possibly see why anyone would want to hold onto citizenship from there endure the treatment from those people, and the outright discrimination overseas (as with TD Direct Broker).

    You’ll see the US change it’s character and mentality when you see a cow cough. 🙂

  4. @geeez I can access it once with firefox, twice with Internet Explorer, and with Chrome (I only tried once). So try a different browser. I think if you have accessed the page once the cookie is sends you to the registration page. It might also do that because you are in brazil. Also click it again, because I changed it from a direct link to accessing the article through google. Sometimes that helps.

  5. This is a great article. Americans have already become international pariahs in the banking system, and Washington is still under the delusion that they set the rules for the world. LOL. Now Americans can’t even get bank accounts. This is such a ridiculous state of affairs. If those clowns in DC even consulted with the bank industry before making new rules, they might have been able to avoid this. Pride comes before the fall. And this fall is going to be hard. This is the key point comes from Guzman:

    “We have enough business in Asia, so we don’t want to make our lives too difficult,” de Guzman said.

    In other words, shutting Americans out of the banking system makes more sense than trying to implement FATCA. Washington says FATCA; international banks say, fine, we won’t do business with your people anymore. Washington is stuck on stupid.

  6. @ Petros

    I think the clowns in DC most likely consulted with the banking industry – the Wall Street banking industry.

    It is in their interest to force Americans to keep their money in US banks within the Homeland rather than overseas.

  7. This is a perfect opportunity for India, China and other European countries to shut out US people and imports and gain unfair advantage. The US is doing everything it can to derail exports or expansion of US based SME. If US want to shoot it self in the foot, any smart competitor just goes along and encourages such behavior.

    The 1976 act of global tax on US citizens hurt US competitiveness and exports. I am sure FATCA causes no less damage to remaining cross border business and exports. The businesses are built by passion and drive of the entrepreneurs and sales people on the ground in those countries. The US has huge population of highly mobile and determined immigrants from many countries such as China and India. Yet isn’t it pathetic that the US is not able to compete with countries like Swiss, Japan and Germany in exports to those countries.

    Many Indian origin entrepreneur in the USA, who has well connected in India are unable help the USA. I am sure, close relatives (e.g. children, siblings or grandchildren) of more than 80% of the decision makers (i.e. mid to higher level government employees) are living in the USA. To leave home and succeed in a foreign country needs drive and handwork. If given opportunity many of them can help the USA in exports. But the USA is treating them as tax-cheats and traitors, if they move back to India to start small businesses to take up 30% local content and sourcing of parts/maintenance that is necessary condition for any defense contacts/purchase-orders.

  8. Between year 2000 and 2008, all major cities in India experienced huge real estate boom. I know many Indians living in the USA earned 500% to 2000% return on their investments. Also stock market index quadrupled in the same period. Many people repatriated their gains back to the USA (resulting in huge gains to US economy). The FATCA will shout out such opportunity for all US citizens living in the USA, especially since if emerging economies continue to grow and offer more returns to investors and help the US economy when they bring back the money.

    I heard one group of US-investor invested just US$3 million in land and later repatriated US$40 million. Another investor invested just US$20k in a startup and repatriated US$250K. They are just couple of examples. I felt sorry for India, because India is poor country having huge trade deficient, so can’t afford to loose hard currency. These kinds of activities can also earn foreign currency like exports. Although it is not obvious, it hurts US earnings/exports.

  9. The “geniuses” in Washington think that the US is the best and greatest market to sell products. So they create more and more headaches for people to do business with the US and unfortuate “US Persons”. There will come a time when most countries and businesses of the world echo the quote from the article “We already have enough money here… we don’t need the headache.”

    I saw something a while back where a handful of the Latin American countries setting up another “union” in Latin America, against the wishes of the USA. I expect this to accelerate with each and every new headache. I know some industries here that export to all over the world, minus the USA. They have been getting along just fine without the US. The world is a pretty big place, and it’s growing. Brazil is slowly chipping away at the US’s top agricultural exports. And China is already Brazil’s largest trading partner, not the US anymore.

    What I find completely amazing is how the US, with some of the best and brightest brains in the world, cannot avert the same rise and decline of some many empires of the past. There must be something that is instinctual, associated with power…

  10. @Geez: According to one of the most brilliant men who ever lived (Albert Einstein), power and brains don’t mix: “The attempt to combine wisdom and power has only rarely been successful and then only for a short while.”

  11. @Jefferson…

    Thanks for giving me plenty of comment opportunity this morning with my coffee. I added about 7 comments in response to others. I think I have done my part, so come on you recalcitrant IBS readers 🙂 who think it doesn’t matter, add some more. What does it hurt, and you never know, it might advance the discussion and debate? Nothing ventured, nothing gained. Just keep your frustration level and hyperbole to a minimum, so your are seen as more than a “ranter”, is my opinion. Thanks Jefferson for your comments. They were very good and should give a reasoned reader pause for consideration..

  12. @Just Me. Posted mine. Tried to curb my frustration, not sure how successful I was. Maybe I should have maybe read this one first, not the one by Matias Romas aka the kid-who-only-reads-article-headlines.

    The US govt has a track record of implementing new, complex laws, with little thought given to the actual consequences. It’s well nigh impossible for US persons living outside the US to stay current with what the US govt is requiring of them. Although many of the laws are aimed, supposedly, at catching tax evaders and money launderers, it is the middle class persons who are hardest hit. Millionaires can afford the high priced specialized help to ensure their taxes are as little as possible, they can afford to pay the cost for compliance in reporting their bank accounts (FBAR). Many regular folks do not have the money to pay for the tax attorneys and specialists.
    The cost for foreign banks to implement FATCA has been estimated at $100 million per banking group (TD Financial Group). The banks will not swallow this cost, but will pass it on to all of their customers. To comply with FATCA, many non-US banks will have to violate the laws of their own countries, and violate the privacy of citizens of other countries. This is an outrage and will NOT help to catch tax evaders and money launderers.
    The US seems to be in a panic driven reaction mode. The money is draining out of their country and they are trying to plug the hole by implementing poorly thought out, extraterritorial laws that will actually cause the drain to increase, not decrease. When people cannot do their banking in their country of residence, cannot save for their retirement, they will have no option but to renounce their US citizenship. US’s loss will be Singapore’s gain, or France’s gain or Canada’s gain. Is that really what the makers of these laws really meant to do?
    To see the real impact of citizenship based taxation, FATCA and FBAR:
    http://www.isaacbrocksociety.com

  13. @outraged…

    Good for you. Very well put.. I like how you ended with a question back to the reader. And, never mind the Matias Romas of the world. You will never get them all to stop, read, understand and consider! 🙂

  14. @Just Me, I know, it’s Don Quixote syndrome, thinking I/we can make a difference. But, how does one just let it stand without at least trying? I just get so darn mad! What gives me hope is the very occasional one like WhoaIt’Steve…

  15. @Outraged: “Get me out of this pickle, because it’s already pretty messy in here!” (Don Quixote to Sancho) Together, we will eventually get out of this pickle!

    We’re changing minds and attitudes one person at a time. In addition to Whoa, we also have our good friend Steven “It’s The Law” Mopsick now writing in opposition to citizenship based taxation and becoming an advisor to ACA.

    And, of course, there’s Pete the Planner.

    Like Don Quixote, we can’t give up on The Impossible Dream.

  16. @Jefferson. I see you posted a comment at Accounting Today Story on Datca. Thanks for doing that. Michael Cohn has been good on reporting on the FATCA/DATCA story, and he deserves well written and measured comments. It shows him that people are reading his efforts. http://bit.ly/JjL1vJ

  17. @just me @all I have been searching out every article I can on FATCA and posting wherever posting can be done without paid subscription, with links back to IBS and some of the other sites that are talking about related issues. Thanks for all of your help. We can’t do anything without the efforts of each of us, as a community united by one set of issues. Let’s hammer the news sites with responses that document our stories and our interpretations of FATCA, FBAR, double taxation, CUT, and other unnatural crap laws that congresspeople that do not represent us are willfully and/or blindly spewing forth into the boundless morass of overly-verbose US legislation that only fuels ambulance chasers and compliance-gold-rush-firms. We need to let the American people see what is being done to their cousins living abroad. Open their eyes. Get back the the basic democratic values folks.

  18. @ Jeff Thanks for your efforts. Every link on other site will increase our pagerank (google metrics) and our reputation (alexa metrics). As our blog becomes more popular, our influence will increase. We are starting to see the legacy media pay attention to us.

  19. @FromTheWilderness.

    I saw your comment and a few others too. I added one also. The more the merrier.

    I do think the authors of these types of articles/blogs are starting to take notice, as now with each new one that comes out, I see themes creeping in from our past comments that were not there before. So, we must keep repeating the “talking points.”

  20. I just found a new blog, do any of you at IBS know about this one?

    Daniel J Mitchell “International Liberty:
    Restraining Government in America and Around the World”

    http://danieljmitchell.wordpress.com/2011/06/20/fatca-law-is-an-international-version-of-obamacares-1099-provision-a-nightmare-for-cross-border-economic-activity-that-is-undermining-investment-in-america/#comment-27593

    @FromTheWilderness. I tried to post to the article you found, but my post with links to Isaac and other friendly sites never shows up.

    I found another article that has some discussion from May 2012: http://timesofindia.indiatimes.com/opinions/8848645.cms Tried to post there but although I received an acknowledgement mail, my post hasn’t shown up yet.

  21. @Jefferson,

    Yes, Dan Mitchell is well known. He posted one of Petros “Santa arrested parodies” that I sent him in an email around Christmas.

    I read and occasionally comment there. He is on the very libertarian side of the equation, and often right on point. Sometimes a little too idealistic for me, with too much certainty, but what I do appreciate is his willingness to criticize both sides of the political partisan divide in DC.

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