Pericles (495 BC-429 BC)
Five days of constant motion and ever since we returned to the apartment last night I've been trying to organize my thoughts with an eye toward giving you my impressions, observations and conclusions. Reading Steven Mopsick's post this morning I decided to use his thoughts as a springboard for mine.
So, in no particular order, here are the things that a Washington newbie and American citizen fresh off the boat from abroad found interesting, encouraging and disheartening. And, yes, it was a little bit of all those things. I do want to say before I begin that the opinions and impressions that follow are my own and do not reflect the positions of the different diaspora organizations I work with. On this blog, I own my own words.
1. FATCA is not going away. Even the people I listened to who hated it and might even have some clout if they wanted to work harder against it, are resigned to it. It's gone too far and too much work has been done to make it happen. Yes, there is awareness that it will be a "train wreck" and "chaotic" on July 1, 2014 but that is not going to be enough to stop it. The most any one can hope for at this point would be a delay until the end of 2014 and the chances of that are slim.
2. No Champions in Congress. Today almost no one in Congress with the exception of Rand Paul will publicly go to bat for the people who are the eggs being broken in the making of the FATCA omelet. And when I say "go to bat" I mean publicly defending the victims of FATCA or introducing laws to repeal or revise it. Some of this reticence has to do with how the homeland public views Americans abroad - those champagne-swilling, yacht-owning residents of exotic lands- and some of it is the partisan nature of American politics which is leading to gridlock on any number of topics. Asking these folks to vote for legislation on our behalf, be it a repeal FATCA attempt or trying to change to a residence-based tax system, is just about impossible right now.
3. Consequences Are Known. What was encouraging is that almost everywhere we went people were aware of the banking discrimination and the renunciations. The few who didn't know, we were more than happy to educate and they were horrified by the stories. I was at more than one meeting with people who had relatives living abroad and had heard from them directly about the consequences of FATCA. Others had letters from constituents. Quite a few of them brought up the renunciations as well and wanted more information about that.
There was a great deal of sympathy on the part of the people we talked to in Washington. Over and over I heard things like "disproportionate penalties", "collateral damage" and "you are being punished for the actions of a few bad actors." But, frankly, most had no idea what could be done about it. Repeal FATCA was clearly off the table and so they were struggling to find something that they could do.
4. Mitigation. As I said most were receptive to ideas that would address some of the worst consequences of FATCA. The proposal to redefine "foreign" and exclude reporting on accounts located in the same country as those US citizens - like my bank which I pointed out was right across the street from my house and was certainly not "offshore" - was one that many thought was quite reasonable. My understanding is that this would not require legislation and so it would be easier to do.
Another possibility comes through the IGA's some of which have clauses that say that financial institutions are not to discriminate against US Persons. It was pointed out that the IGAs have not yet been implemented and so one avenue Americans abroad have is to watch the host country legislative process carefully and jump in if we don't see those non-discrimination clauses included in the local laws that implement FATCA.
5. Next Steps. So where does that leave us? What can we do at this point that stands a chance in hell of making a difference?
Letters: Keep those letters to lawmakers coming. If you have written before, write again. They are receptive and if you don't get an answer, call them and insist on one. It really does make a difference.
Media: Give interviews to the media. I was told in more than one case that after getting a letter from a constituent, the staffers went and looked for information on the Net. The more articles (and the more recent the articles), the better.
Friends & Family in the US: I heard more than once that the staffers and agency staff had a relative living abroad or who was thinking about moving abroad. Ask your contacts back in the US to write or call. I also noticed that some of the staffers we met had been Americans abroad themselves and that made them even more empathetic.
Local Parliaments: Whether you are a legal resident or you are living in your other country of citizenship, find out where FATCA implementation is at in the legislative process. Read the IGA, follow the implementing legislation, and keep the pressure on local lawmakers. Look for rules that would prohibit discrimination against US Persons. If it isn't there, insist on it.
Vote: If you are still a US citizen one of the most powerful acts is to vote and to let your US lawmakers know that you are a voter and a constituent. The meetings I attended where I was a constituent as well as an AARO delegate, I was listened to all the more attentively. It does make a difference.
Last word. For years we have been going about our lives outside the United States with the impression that U.S. politics does not directly concern us while we are outside the homeland. We certainly never imagined a FATCA in our future. This is our wake up call. American politics is a blip on our radar, but now we are certainly on theirs and not always in a good way. We are being forced by the homeland to make decisions.
We can choose to engage or disengage, but invisibility or simply being left alone is clearly no longer an option for any of us.