The price of American citizenship only seems to get costlier – and I’m not just talking about high taxes. For Americans living or working overseas, excessive US regulations are becoming a disruptive burden, as exemplified by this disclaimer from Swiss PKB Privatbank brought to our attention by good friend Dr. Eduardo Morgan of Morgan and 
Morgan in the Republic of Panama. After being presented this instruction: “U.S. Nationals and Residents please click here due to Legal restrictions applicable to your Country,” we find the following disclaimer:
For reasons of US securities laws (in particular the Investment Advisors Act and the Dodd Frank Act) you are not allowed to visit this website.
We cannot and will not, as a matter of principle, give you any investment advice or solicit broker/dealer services as we are not a SEC registered investment advisor or broker/dealer.
This is a jarring statement to see, though it shouldn’t be entirely surprising. US tax policy has seen a decades-long drift in this direction, beginning in the 1990′s with Qualified Intermediary and Know-Your-Customer rules, and compounded in recent years by new and costly burdens from Dodd Frank and FATCA. These more recent rules, along with Senator Levin’s latest attempt to expand Treasury Department authority to threaten banks that don’t act as deputy US tax collectors, are making US citizenship a toxic asset and US markets a bad place to do business. CF&P has been consistently warning that this trend toward fiscal imperialism would result in disinvestment in the US economy, and sadly events keep proving us right.
Unfortunately, there are many more examples out there just like this one. Many banks no longer can afford to take on US clients or invest in the US economy. Congress must wake up and reverse this trend by making the US an attractive place for foreign investment once again.
June 13, 2012 at 6:33 pm
I hope the Center for Freedome and Propsertiy is working hard on this. 6 months to go to educate Congress as to the follies of their FATCA regulations, but the forces that want a global FATCA or GATCA are greater than those that do not, I fear. All better start reading the blizzard of new forms that will be forth coming from the International Revenue Service. You can start with the 25 page W-8BEN. It never ends with these guys
June 14, 2012 at 6:39 pm
Thank God for C for F & P! May their tribe increase! With this Act the US citizen living and working abroad can only survive if he (1) returns home or (2) renounces his US citizenship. Foreign banks have to make a choice as well. It is either (1) violate the privacy laws of the countries where they operate and reveal confidential account information to the IRS that their laws punish with criminal action if it is revealed to any 3rd party, or get rid of all accounts held by US persons.
With a $752 billion trade deficit. growing by $2 billion/day (which equates to 7.9 million destroyed productive manufacturing jobs making products for export) common sense tells us we need more Americans abroad selling our products not less. Regretably common sense is the least common of the senses in Washington. The US stands virtually alone among the high wage industrialized countries with a trade deficit. Tiny Germany exports 7.9 times more per-capita to China than we do and as a trade surplus with that country as well as a $224 billion world trade surplus and the lowest unemployment rate in 20 years.
The US trade deficit is 60% of the total trade deficits in the world.
June 14, 2012 at 4:27 pm
Land of the Used To Be Free!
June 15, 2012 at 11:08 pm
The only cure for our screwed up tax system is the FairTax. While the FairTax is despised by all politicians except a few, it would cure our trade deficit and our unfair tax collection system, as well as FATCA.