FATCA: The Queues to Renounce Reportedly Now Stretch for Months in Some Places




As the impact of the US Foreign Account Tax Compliance Act (FATCA) on American citizens abroad becomes ever clearer, an extraordinary “rush to the exit” appears to be accelerating as once-proud US citizens move to swap their nationality for less intrusive ones.

USCIS Logo in Spanish ... queues  both when you want in and out. (Credit Wikipedia Public Domain)

USCIS Logo in Spanish … queues both when you want in and out. (Credit Wikipedia Public Domain)

According to Victoria Férauge, a Paris-based writer who edits the Association of American Residents Overseas, (AARO’s) newsletter and her own widely read The Franco-American Flophouse blog, Washington seems to be digging itself into a deep hole over the fallout from the unloved FATCA:

Want to Renounce? Join the Queue….

by Victoria Férauge 
Patrick Cain of Global News has some new information about U.S. citizenship renunciations in his recent article,  Want to shed U.S. citizenship? Get in line.  He’s reporting that the U.S. embassy in Toronto, Canada has so many requests for renunciation interviews that the first available appointment is now late January 2015.For months now rumours have been floating around that such and such U.S. embassy’s renunciation appointment calendar is filled up (Paris, for example) but this is the first hard evidence I’ve seen and it comes from a country that has one of the largest U.S. citizen populations in the world. Canada is estimated to have around a million U.S. citizens (that includes duals) while the American “colony” in Paris probably does not exceed 100,000.  But even in Paris there is anecdotal evidence that the embassy is struggling to meet the demand.  When a French citizen was outed as a U.S. citizen by his French bank earlier this year, Le Figaro had this to say:

“Désarçonné, le Franco-Américain, qui n’a aucune attache outre-Atlantique, envisage alors de renoncer à cette pesante nationalité. Mais renseignement pris auprès de l’ambassade américaine, le délai est bien trop long (plusieurs mois).”
(“Flabbergasted, this Franco-American, who has no attachments on the other side of the Atlantic, thought to renounce this unwanted nationality. But after inquiring at the American embassy, the delay [to renounce] was too long (several months).“)

Phil Hogden’s commentary on the Cain article is quite good.  His last point in particular which is about the official renunciation procedure which went from one appointment to two appointments and is now back to one.  Why it went to two in the first place is any one’s guess (and furthermore it does not seem to have been consistently applied in all U.S. embassies worldwide) but, yes, it does look like an attempt to slow down the process and get people to reflect (perhaps change their minds?) before the deed is done.

And how many of those renunciations actually end up on the Name and Shame list in the Federal Register is any one’s guess.  What we do know is that there are individuals out there who have publicly renounced and for some reason their names were never included (or were included many months after the deed).  Some of them are quite miffed about it.


AARO: Worried about FATCA? Help is at hand here: ASSOCIATION OF AMERICANS RESIDENT OVERSEAS


Renunciations are not, however, the whole story.  To appreciate the magnitude of this “rush to the exit” phenomenon and its impact on U.S. citizenship, I suggest that two other numbers should be looked into as well.

1.  Certificates of Loss of Nationality.  There is renunciation and there is relinquishment and the latter is often touted as an easier, softer, cheaper way.  Maple Sandbox has a good explanation of the difference here but, in a nutshell, a U.S. citizen just has to commit an expatriating act with the intention of giving up U.S. citizenship to be halfway out the door.

One of those acts is taking on another citizenship.  So  what can happen is an American citizen who became a Canadian citizen in 1972 and never renewed her US passport or voted (or any other act that might imply that she wanted to remain an American citizen) can file papers with the local consulate documenting the act and the intent and requesting a certificate of loss of nationality (CLN) backdated to 1972 when the relinquishing act was performed.

And what works for her will also work for someone who took on, say, Italian citizenship a few days ago.  He can go to the local U.S. consulate and file the same papers and then wait for the CLN to come in the mail.   Not all cases are as simple as these two but hopefully you get the gist.

But what that means is that the most accurate number of U.S. citizenship renunciations/ relinquishments is not the count in the Federal Register but the number of Certificates of Loss of Nationality issued (renunciations + relinquishments = CLNs).

2.  Consular Reports of Birth Abroad:  U.S. citizens abroad can go to the local consulate in the host country to report the birth of a new US citizen (a child born abroad to parent(s) who fulfill the requirements to pass along their U.S. citizenship to their offspring).  The purpose of such a pilgrimage to the local consulate is to get a determination that the child was indeed born an American citizen and acquire the documentation necessary to, say, apply for a US passport.

But here’s the kicker – this is entirely voluntary.  No American parent abroad has to make such a report and furthermore reporting or not reporting the birth makes no difference whatsoever in the status of that child:  if his parent(s) fulfilled the requirements for passing along US citizenship then that child is a US citizen by birth, albeit an undocumented one.  Nothing prevents that child from claiming US birthright citizenship later in life.  It’s just a matter of gathering the right paperwork.

So put yourself in the position of an American abroad with a new baby.  Do you report the birth and get the passport/social security number right away? Or do you wait until the child can make up his or her own mind whether he wishes to claim US citizenship or not?

There is anecdotal evidence that the latter is becoming more and more common and that would make sense.  But is it true?  No one knows.

Both of these things should be looked into by an intrepid, inquisitive soul in order to get a much better perspective on the state of US citizenship today.  A simple Freedom of Information Act request should suffice.

(And before I forget, there are rumours that the current US citizenship renunciation fee will be raised from 450 USD to 2 or 3,000 USD.  No idea where it came from but welcome to an Internet world, folks, where information flows fast and furious and where a US cit with news in China can pass that info along to a US cit in Germany in minutes.  And that is also something to look into – the new American abroad networks which connect American communities around the world.  Something to watch and frankly I am amazed that more migration experts in the US haven’t clued into this yet…) 



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