I learned of Zero Hedge while looking into FATCA etc. Too late by then. All my assets are in the country I live in, Japan.
The account closures and freezes are due to the requirements upon the FFIs. If they do not report all US persons, they get hit with a “noncompliance fee” of 30% all US derived income. The cost involved with creating one or more data bases to track their US person account holders and report them if they exceed a certain amount and yet still get fined if they miss anything added to the knowledge that the US has made changes suddenly and applied them retroactively is such that the FFIs do not want to do business with such persons. So many have just closed the accounts of people they know to be from the US. Others have frozen the accounts.
In Japan, I had to provide my US SSN for the first time in the 20 years I have lived here and sign a waiver of rights to allow my new bank to report all transaction to the US, regardless of the amounts and my balance, also for the first time. It is against Japanese law to report such info to a third party, thus the waiver. If I did not sign the waiver, they would not have allowed me to open the account. The whole mess has been termed “bank lockout” or “bank freeze out”, the former being the more commonly used now, I think.
After the US forced every country in the world except N. Korea to sign IGAs with the US, the OECD decided to implement their own, called Common Reporting Standard (CRS). Now, those of us who live outside the lands of our birth are having accounts at “home” closed as the cost of compliance on the part of FFIs is too high. That is what brought about the account closures among my Non US gaijin coworkers here in Japan. In short, for many of us already and soon to be all except the super rich, one can not have accounts outside their country of residence nor outside the country of their birth. Poor souls who live outside the land of their birth are in for a lot of hurt in the future, regardless of their citizenship. Same for those who are born outside the US to US parents or born in the US and turn to to their parent’s homeland shortly there after.
Been losing sleep over this for 8 years. Been blackpilled long before the panic. This just made it more so.
There is another reason for bank account closures and freezes due to FATCA. Many former US citizens did not know of something called a Certificate of Loss of Nationality, or CLN. Of those that knew of it, many did not get it as it was not required and it just another hassle. Now, decades after they relinquished US citizenship, many have no way to prove that they are no longer a US citizen and thus required to follow US reporting laws. Their financial institution demands the CLN, they don’t know what it is or at least do not have one and their account is closed or frozen. I know of at least one case in which a former US citizen had their CLN but the bank still closed the account.
I have no idea how the super rich get around it other than they can pay the fines and fees. It does seem that due to being able to afford high quality advisors that many were tipped off and moved their money somewhere where this was not a problem. By moving their money I do not mean to another country but into some other, more acceptable form. I would not be surprised that certain cash investments in the homeland would not hurt, but do not know. Those whose FBAR cases I have read about are certainly much wealthier than I but by no means super rich. I do not recall a single case of a super rich person getting caught up in the except for Paul Manafort and I’m not sure he qualifies as super rich. He might, I just don’t know.
This is kafkaesque.. It's hard to stay positive these days. I wonder if really wealthy people rely on having staff in their non US country, paid through a corporation or something, and the staff pay the bills. There must be some workaround.
I learned of Zero Hedge while looking into FATCA etc. Too late by then. All my assets are in the country I live in, Japan.
The account closures and freezes are due to the requirements upon the FFIs. If they do not report all US persons, they get hit with a “noncompliance fee” of 30% all US derived income. The cost involved with creating one or more data bases to track their US person account holders and report them if they exceed a certain amount and yet still get fined if they miss anything added to the knowledge that the US has made changes suddenly and applied them retroactively is such that the FFIs do not want to do business with such persons. So many have just closed the accounts of people they know to be from the US. Others have frozen the accounts.
In Japan, I had to provide my US SSN for the first time in the 20 years I have lived here and sign a waiver of rights to allow my new bank to report all transaction to the US, regardless of the amounts and my balance, also for the first time. It is against Japanese law to report such info to a third party, thus the waiver. If I did not sign the waiver, they would not have allowed me to open the account. The whole mess has been termed “bank lockout” or “bank freeze out”, the former being the more commonly used now, I think.
After the US forced every country in the world except N. Korea to sign IGAs with the US, the OECD decided to implement their own, called Common Reporting Standard (CRS). Now, those of us who live outside the lands of our birth are having accounts at “home” closed as the cost of compliance on the part of FFIs is too high. That is what brought about the account closures among my Non US gaijin coworkers here in Japan. In short, for many of us already and soon to be all except the super rich, one can not have accounts outside their country of residence nor outside the country of their birth. Poor souls who live outside the land of their birth are in for a lot of hurt in the future, regardless of their citizenship. Same for those who are born outside the US to US parents or born in the US and turn to to their parent’s homeland shortly there after.
Been losing sleep over this for 8 years. Been blackpilled long before the panic. This just made it more so.
Thanks for the explanation, I now recall some of these phenomena were discussed on ZH also..
I was just wondering, how do the super-rich get around these issues?
There is another reason for bank account closures and freezes due to FATCA. Many former US citizens did not know of something called a Certificate of Loss of Nationality, or CLN. Of those that knew of it, many did not get it as it was not required and it just another hassle. Now, decades after they relinquished US citizenship, many have no way to prove that they are no longer a US citizen and thus required to follow US reporting laws. Their financial institution demands the CLN, they don’t know what it is or at least do not have one and their account is closed or frozen. I know of at least one case in which a former US citizen had their CLN but the bank still closed the account.
I have no idea how the super rich get around it other than they can pay the fines and fees. It does seem that due to being able to afford high quality advisors that many were tipped off and moved their money somewhere where this was not a problem. By moving their money I do not mean to another country but into some other, more acceptable form. I would not be surprised that certain cash investments in the homeland would not hurt, but do not know. Those whose FBAR cases I have read about are certainly much wealthier than I but by no means super rich. I do not recall a single case of a super rich person getting caught up in the except for Paul Manafort and I’m not sure he qualifies as super rich. He might, I just don’t know.
This is kafkaesque.. It's hard to stay positive these days. I wonder if really wealthy people rely on having staff in their non US country, paid through a corporation or something, and the staff pay the bills. There must be some workaround.