The number of Americans who’ve turned in their passports and renounced citizenship has increased more than tenfold in five years, to 3,000 in calendar 2013. [USA Today] Earlier on the burdensome expatriate tax and regulation measure here, here, here, and generally here.
How “money laundering” regulations give the U.S. Treasury power to destroy foreign banks [Stewart Baker, Volokh] Meanwhile, if Canadians imagine that the Foreign Account Tax Compliance Act (FATCA) is something only Canadian-Americans need to worry about, they should think again [Maclean's]. Excerpt:
To say that FATCA is controversial is an understatement. The law is so complex and onerous to implement that some foreign banks have reportedly kicked out their U.S. clients in order to avoid dealing with it. Americans living abroad are queuing to give up their U.S. passports over it. The other problem with FATCA is that it asks foreign banks to do things that are often illegal in their home countries, such as passing on certain private information.
Earlier on “know your customer” here and on FATCA here.
Many previous posts in this space have addressed the Foreign Account Tax Compliance Act, which presumes to regulate overseas banks and financial institutions that do business with Americans, and which goes into effect next June. So it’s nice to see the Paper of Record running a reasonably informative introductory piece on its problems, even if at too late a date to get the thing stopped. “Global banks and investment firms have made their dislike of the law known, though they are reluctant to speak out individually” — and how common that last point is these days, given the retaliatory potential of the U.S. government’s vast regulatory and enforcement apparatus for a business that does dare to speak out. Still, a few critics are willing to show their heads above ground, including
Georges Ugeux, a dual Belgian-American citizen, a lecturer at Columbia Law School and the founder of Galileo Global Advisors, an international business consulting firm. He described the law as “bullying and selfish.” The United States, he said, “is acting outside its borders as if they were its home.”
Sen. Rand Paul of Kentucky has introduced legislation to roll back part of the law, and there is a site called RepealFatca.com. [Lynnley Browning, NYT via TaxProf]
..a surge in U.S. citizenship renunciations by expatriates [Bloomberg] The United States is “the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside,” a departure whose disincentive effects are magnified now that Congress is insisting on regulating foreign financial institutions that deal with Americans. Earlier on FATCA here. More: Dan Mitchell, Cato.
New SEC chairman Mary Jo White shows better sense about it than some newspaper editorialists that could be named [Louise Bennetts, Cato]
Gibson CEO Henry Juszkiewicz, WSJ, excerpted at PoliceMisconduct.net:
In America alone, there are over 4,000 federal criminal offenses. Under the Lacey Act, for instance, citizens and business owners also need to know – and predict how the U.S. federal government will interpret – the laws of nearly 200 other countries on the globe as well. Many business owners have inadvertently broken obscure and highly technical foreign laws, landing them in prison for things like importing lobster tails in plastic rather than cardboard packaging (the violation of that Honduran law earned one man an eight-year prison sentence). Cases like this make it clear that the justice system has strayed from its constitutional purpose like stopping the real bad guys from bringing harm.
Harvey Silverglate says that while Juszkiewicz is right as far as he goes, he’s seeing only part of the picture. Earlier on the Gibson raid and Lacey Act here, here, etc.
In the case of Kiobel v. Royal Dutch Petroleum, scheduled for argument Tuesday, the Supreme Court will consider curbing the modern scope of the Alien Tort Statute, which asserts U.S. jurisdiction over various human rights controversies arising within the bounds of other countries. [Reuters, earlier] Considering that it amounts to the Law of the Hegemon, the Statute is oddly popular in some Left circles [Kenneth Anderson/Volokh] European governments (Germany, Great Britain, the Netherlands) have filed amicus briefs on the defense side [John Bellinger, Lawfare; more, WaPo]
More: The New York Times’s Room for Debate discussion includes a contribution by my Cato colleague Ilya Shapiro. And Point of Law is having a featured discussion on the case with David Weissbrodt of the University of Minnesota and Julian Ku of Hofstra.
Some expected that the big new SEC regulations on industrial users of tin, tungsten, tantalum and gold would mostly affect electronics and jewelry makers, but the actual net being cast is far wider. Manufacturers in general must investigate the supply chains of their products in order to comply with the disclosure requirements, no small matter at a firm like Kraft with 40,000 products and 100,000 suppliers. (Kraft found that the minerals may turn up in pouch packaging of juice products.) No wonder the SEC’s absurd initial estimates of a mere $70 million economy-wide compliance cost have given way to estimates a hundred times higher or more. In an echo of the infamous CPSIA statute, “the rule provides no de minimis exemption for trace amounts.” [Melissa Maleske, Inside Counsel, earlier here, here, and here] (& Bainbridge)
More: the Dodd-Frank conflict minerals provision and the Democratic Republic of the Congo [Marcia Narine, Conglomerate via Bainbridge]
“Tulane Study Says SEC Estimate of Cost of Conflict Mineral Rules is 100x Too Low” — headline at Business Law Prof (via Prof. Bainbridge), describing a new calculation that the implementation of the complication Dodd-Frank provision will in fact cost American business upwards of $7 billion, not the $70 million the Securities and Exchange Commission optimistically foresaw. (Typo fixed now.) Earlier here, here (“devastating” effect on Congolese).
“The House Judiciary Committee passed a bill yesterday that would make it a federal crime for U.S. residents to discuss or plan activities on foreign soil that, if carried out in the U.S., would violate the Controlled Substances Act (CSA) — even if the planned activities are legal in the countries where they’re carried out.” [Balko, Somin]
Great WSJ article on the unending proliferation of federal crimes, with appearances by a family that ran into a law making it a felony to dig for arrowheads on federal land, Bobby Unser and his snowmobile-astray ordeal, and a man effectively ruined by the $860,000+ cost of successfully defending himself against a federal charge of violating Russian hunting regulations.
“Most people think criminal law is for bad people,” says Timothy Lynch of Cato Institute, a libertarian think tank. People don’t realize “they’re one misstep away from the nightmare of a federal indictment.”
More: from Tim Lynch, and (via PoL) Josh Blackman, William Anderson/Regulation mag.
Someone must think there’s a big emergency, because Capitol Hill lawmakers are moving remarkably quickly on a partial overturn of the Supreme Court’s new 8-0 Morrison ruling, which was handed down less than two weeks ago. [Julian Ku, Opinio Juris] (& welcome Daniel Fisher, Forbes readers).
“While there is no reason to believe that the United States has become the Barbary Coast for those perpetrating frauds on foreign securities markets,” wrote Justice Scalia for the Court, “some fear that it has become the Shangri-La of class-action litigators for lawyers representing those allegedly cheated in foreign securities markets.” [Mauro/NLJ] And hurray for the presumption against extraterritoriality [Ku/Opinio Juris]