On Thursday 5 July, the members of the European Parliament adopted, by a considerable majority (470 votes to 43 and 26 abstentions) the draft resolution submitted following the oral question to the Commission and the Council calling for an agreement between the United States and the EU to mitigate the negative effects of the American 'FATCA' law (US Foreign Tax Compliance Act) on European citizens and, in particular, “accidental Americans”.
In 2016, Parliament's committee on petitions was alerted by a group of European citizens from Germany, France, the United Kingdom, Italy, the Netherlands, Spain, Ireland, Sweden and Belgium to the harmful effects of this law, which aims to fight tax evasion. To do so, it requires foreign banks to flag customers who are American citizens to the American tax authorities.
The MEPs are particularly concerned at the repercussions on “accidental Americans” who, by accident of birth, have American citizenship, but who have no links with the United States and are EU citizens.
“The consequences are dramatic for these individuals, as what is asked of them is to comply with American tax rules by paying tax arrears in the US”, explained Virginie Rozière (S&D, France). She added: “if you do not, you can be denied access to the most fundamental banking services”.
Indeed, under this law, member states have signed bilateral agreements that allow the unilateral and extra-territorial application of US law on European soil.
The resolution therefore urges the Council and the Commission to present a common EU approach to FATCA to protect the rights of citizens and improve reciprocity in the automatic exchange of information.
The MEPs also called upon the member states to give the Commission a mandate to open negotiations with the US on an agreement to cover the possibility for accidental Americans of the EU to waive their American citizenship free of charge and without penalty.
Another request is the full and correct transposition of the European directive on payment accounts, which guarantees the right of all EU citizens to be able to access a payment account with base characteristics, irrespective of nationality.
Commission and Council hitting ball back to each other
During the debate preceding the vote, Karoline Edtstadler, the Austrian Secretary of State to the Ministry for Home Affairs, said that it was up to the Commission to assess the appropriateness of the implementation by the member states of the directive on payment accounts. She went on to say that it was not the Council's role to interpret bilateral agreements concluded by countries with the US or to assess their impact.
The European Commissioner for Justice, Vera Jourova, stressed that it is the member states that decided not to give the Commission a mandate to negotiate a global EU agreement, opting instead for bilateral agreements.
However, she assured the MEPs that the Commission was prepared to take all necessary measures in the event of the non-respect of the payment accounts directive, including the opening of infringement proceedings for breaches of EU law. (Original version in French by Marion Fontana)