deVere: Presidential candidates owe it to America to explain their stance on controversial FATCA

Presidential candidates must come clean on America’s highly controversial global tax law – and more must urgently be done to repeal it, not least because it is “a blue print for worse to come”, warns the boss of one of the world’s largest independent financial advisory organisations.

Nigel Green, founder and chief executive of deVere Group, is urging candidates to prioritise the Foreign Account Tax Compliance Act (FATCA) on America’s political agenda for the 2016 election.

Mr Green comments, “FATCA adversely affects millions of hardworking, middle class Americans around the world, plus U.S. companies that operate internationally – and, therefore, it impacts U.S. jobs and the American economy.

“Presidential candidates who support this tax act now need to justify to America why they support it; whilst those who want it repealed now need to articulate to voters why they believe it is fundamentally flawed and why they will move to repeal it.

“It is an issue that must play a major part in the national conversation ahead of the election.”

For the deVere Group, which operates in more than 100 countries and has more than $10bn under advice, what are the principal flaws of FATCA?

Mr Green continues: “It’s claimed that FATCA was designed to catch tax evaders.

This is, of course, a noble and worthwhile aim. Yet FATCA’s dragnet, untargeted approach means it cannot possibly achieve this.

“However, what it does achieve is giving us all a masterclass in the law of unintended consequences.

“For instance, FATCA brands the 7.6 million Americans overseas, Green Card holders and so-called ‘accidental Americans’ as financial pariahs. They are now routinely rejected from foreign financial institutions, such as banks in their country of residence, because FATCA’s costly and burdensome regulations mean they are now typically deemed more trouble than they are worth.

“No wonder that a deVere Group survey undertaken earlier this year revealed that a massive 73 per cent of Americans living overseas are tempted to give up their U.S. passports.

“In addition, U.S. firms which operate in international markets as well as in the U.S. are now often branded with a leprosy-like status. Of course, this can only be detrimental to America’s global competitiveness, and could, as such, seriously and negatively affect American jobs and the long-term growth of the economy.”

He adds: “Questions should be asked about the imperialist characteristics of FATCA. Governments and foreign financial institutions have been coerced into complying with its expensive, onerous, privacy-infringing, sovereignty-violating regulations by the U.S. – or face heavy penalties and the prospect of being effectively frozen out of U.S. markets.

“With its host of serious, unintended, adverse consequences, presidential candidates need to set out their stance on FATCA.”

The deVere CEO insists, “I would also urge Americans who care about prosperity and freedom to take up the call to seek to have FATCA repealed. Not only because it is, arguably, one of the most toxic and potentially damaging laws passed in recent times, but because I suspect it is a blue print for worse to come.”

Mr Green explains, “FATCA is paving the way for GATCA, the Global Account Tax Compliance Act. The Organization for Economic Cooperation and Development (OECD), which is based in France and is the defacto world tax authority, is proposing that accounts opened by foreign nationals be routinely reported to that individual’s homeland tax authorities. It is thought approximately 65 countries could ultimately be involved.

“GATCA – which for Americans would arguably violate the Fourth Amendment – is FATCA on steroids.

“It would take authorised government snooping into innocent people’s financial affairs to a whole new level, it would lead to increased government and statism, it would lead to higher tax burdens for all, it would pose a risk to human rights and a serious threat to data protection, and it would trample all over time-honoured sovereignty, amongst other serious issues”

He concludes: “The best way of halting the dangerous overreach of GATCA in its tracks is to repeal FATCA. As such, presidential candidates owe it to American voters to firmly set out their intentions on this crucial issue.”