In a letter sent on 3 December and made public on Wednesday 11 December, the Finnish Presidency of the EU Council asked Steven Mnuchin, the US Treasury Secretary, to find a solution to the tax and banking problems faced by “accidental Americans” as a result of the US Foreign Tax Compliance Act (FATCA).
The letter, written by the President of the EU Council’s high-level working group on tax issues, warns in particular of the risk of massive closure of bank accounts on 1 January 2020 belonging to “accidental Americans” who, by accident of birth, have inherited US citizenship but have no connection with the United States and are EU citizens.
European banks could indeed make this decision, rather than risk US sanctions, because these people do not have a US tax identification number.
The letter also points to the complexity and cost of the procedure for renouncing American citizenship, which amounts to more than $2,350.
The European Parliament has already addressed the issue in a resolution in July 2018 (see EUROPE 12056/7) and has called for an agreement between the EU and the United States to address the negative effects of the ‘FATCA’ law.
“I am delighted that EU governments have become aware of the issue of accidental Americans and have decided to defend EU citizens’ rights”, said Fabien Lehagre, President of the Accidental Americans Association, in a statement Wednesday 11 December.
“I hope Mr Mnuchin will indicate immediately that he intends to remedy the problem, as it is urgent”, he added.
After the rejection of a first complaint before the French Council of State, the Accidental Americans Association filed a complaint with the European Commission against France on 3 October last, on the grounds that the Franco-American intergovernmental agreement, which applies the ‘FATCA’ law, violates EU law (see EUROPE 12341/14).
See the letter: https://bit.ly/2LMNWRy (Original version in French by Marion Fontana)