Petition No 1088/2016 by Mr J.R. (French) on the US’ Foreign Account Tax Compliance Act’s (FATCA) alleged infringement of EU rights and the extraterritorial effects of US laws in the EU

1088/2016

Summary title: Petition No 1088/2016 by Mr J.R. (French) on the US’ Foreign Account Tax Compliance Act’s (FATCA) alleged infringement of EU rights and the extraterritorial effects of US laws in the EU

Petition number: 1088/2016

Topics: Taxation

Country: European Union

Name of association: Collective of European citizens who are either "accidental Americans" or dual European / US citizens

Name: J. R.

The petitioner’s grievance mainly concerns the US’ Foreign Account Tax Compliance Act (FATCA) - as well as the intergovernmental agreements implementing it in the EU - which obliges European and other foreign financial institutions to report to the US tax authorities all holdings of their “US persons” customers. In his view, this law violates various fundamental principles of European law (including the right to respect for private and family life, the prohibition of discrimination and data privacy,) as well as the Payment Accounts Directive.While FATCA was purportedly targeted at fighting tax evasion by US resident taxpayers, the petitioner states that in practice it has affected a large number of European citizens and in particular so-called ‘accidental Americans’, citizens who are nationals both of the US and a Member State, as well as their non-US family members. Because non-compliance with the requirements imposed by FATCA results in heavy fines for financial institutions, many of them responded by avoiding all commercial business with customers presenting any US connection, whether actual or not. The petitioner states also that the extraterritorial application of US laws comes at a very high price for the EU’s economies and companies. He mentions, in this respect, the case of BNP Paribas, which was fined $8.9 billion by the US in 2014, even though it had not breached any French or European laws. The petitioner also expresses his concern about the fact that the exchange of information is not reciprocal and that the use by EU firms of US consultants and accountants is economic espionage under the veneer of legality.