FACTA hits Americans’ Access to Bank Service
Banks worldwide, bending to controversial US FACTA legislation, are reportedly refusing banking service to non-residents having a connection to the United States — causing significant hardship to those abroad.
As reported last August not too many U.S. expats or would-be expats may be aware but Washington is on a domestically-contested warpath deploying heavy artillery in its tax battle with Americans living in France and elsewhere. Part of that battle affects their access to banking services.
Here are some tips on what to do if you reside in France, an article by Victoria Férauge, editor of The Franco-American Flophouse blog, and republished here by kind permission of the author.
Hanging Together: If you or someone you know is in this situation, the first thing to understand is that you are not alone. This is happening all over the world as FATCA (Foreign Account Tax Compliance Act) marches toward implementation. I urge you to send your story to one of the above organizations – the more documentation they have, the more effective they can be on your behalf. Remember Ben Franklin’s saying: “You must all hang together, or assuredly you shall all hang separately.”
Contact Local and Regional Lawmakers: If you are a dual citizen or an Accidental American then talk to your local or regional lawmakers too. If you are in Europe then you should know that there are Members of the EU Parliament who are very interested in the impact of FATCA on their citizens. A letter to your country MEPs with a copy to Sophie in’t Veld (MEP – The Netherlands) is definitely a good idea.
Know Your Country Law: Depending on the country you live in, the bank that refuses you or who tries to close you existing accounts, may be in violation of local law. ACA has this article about Germany which is not terribly encouraging but every country is different so it’s worth taking the time to find out what your rights are.Just for fun let’s look at what French law says about access to banking services in France. To my surprise, the news is a bit better.Under the Code monétaire et financier – Article L312-1, Chapter 2, section 1 it says:
Toute personne physique ou morale domiciliée en France, dépourvue d’un compte de dépôt, a droit à l’ouverture d’un tel compte dans l’établissement de crédit de son choix. Toute personne physique de nationalité française résidant hors de France, dépourvue d’un compte de dépôt, bénéficie également du droit à l’ouverture d’un tel compte dans l’établissement de crédit de son choix.
(Every natural or legal person living in France, deprived of a deposit account, has the right to open such an account at the credit institution of his choice. Every natural person of French nationality living outside of France, deprived of a deposit account, also has the right to a deposit account at the credit institution of his choice.)
Read that carefully. The right to a bank account is not limited to French citizens – it covers ALL persons who live in the Hexagone. This right was reinforced by a charter that the banks are held to (une charte d’accessibilité bancaire) which has a list of the services that banks are required to provide which include a debit card and checks. Note that the bank can refuse to open an account for any reason and can also close an account. However, when this happens there is recourse for the person who was denied services.
If the bank refuses to open an account for someone, it must provide that person with a letter documenting the refusal and explaining his rights.
The recourse then comes through the Banque de France. The person denied services can send the refusal letter and proof of identity and residency to them and they will find a bank for that person either close to his home or in another place of his choice (“désigne un établissement de crédit situé à proximité de son domicile ou d’un autre lieu de son choix”).
Please note that this recourse is not available to people who already have accounts. It can’t be used to open another account with another bank. The person must be facing a complete loss of all banking services to be eligible.
Also it only provides for access to basic banking services (I would assume this means checking and savings) and does not include investment accounts and the like.
The bank also has the right to close the account it was forced to open. However, it must give a reason and two months notice before closing the account. If the person is then left without any access to services at all, then he is back to contacting the Banque de France and going through the procedure again.
For a foreigner who has recently arrived in France and has limited French, this can be a real problem. Naturally the laws are in French and a new resident may not understand his or her rights. I could see a bank playing on the ignorance of the non-French person and trying to get away with refusing him without any explanation at all. There is also the file one must prepare for the Banque de France which must also be in French. But this is France, folks, and the official language is French (why this surprises people is always a mystery to me). This is a very good example of why learning the local language is not optional. No, it is absolutely necessary for survival. It’s that or throw yourself on the mercy of someone who can interpret for you but that’s not a viable long-term strategy in my opinion.
So there you have it. I’d be very interested in hearing from readers about the local banking access laws in their country. Does the U.S., Canada, Japan or the UK have any laws similar to this?
Reprinted by kind permission of Victoria Férauge, who owns the copyright, and the The Franco-American Flophouse .
Author: Victoria Férauge
Born in Seattle, USA. Victoria Férauge has lived on 3 continents (North America, Asia and Europe) and describes herself as “country agnostic”. Mother of two she believes in “assignments, not jobs … networks, not companies” and is “passionate about technology, culture, language.” She blogs from Paris about life and fitting in as an American-born mother married into a French family and working professionally with French colleagues.
- FACTA Rules On Bank Accounts (taxhavenguru.wordpress.com)
- U.S. Wages its 2012 Diaspora Tax War
- Senator Leads Congress Battle To Repeal FATCA – iExpats
- Using a Sledgehammer to Crack a Nut: Why FATCA Will Not Stand
- Association of Americans Resident Overseas – Paris, France