Home / Live Wire / FATCA or fiction? Live Wire offers perspective on a potential financial Armageddon 

FATCA or fiction? Live Wire offers perspective on a potential financial Armageddon 

Mr Live Wire has heard the questions: “What the arse is FATCA?” “Dem politicians wouldn’t be playing the fool if this so serious, right?” “PNM just trying to scare we again, nah?” “That have something to do with Marlene coming back?”

Well, despite the legitimate interest in pompous Pussyfoot’s petty cash purchases and Dr Keithos’ weird Gumbs challenge—aren’t you old enough to have finished teething?—it turns out that the FATCA deadline of 30 September will probably be the most important thing to happen this week.

Photo: Some men just want to watch the world burn. Some politicians too.
Photo: Some men just want to watch the world burn. Some politicians too.

Quite unhelpfully, Finance Minister Colm Imbert booked his Budget speech on the same day. Presumably, Imbert did not foresee that the UNC would feign such a startling ignorance of what is at stake here.

Wait, isn’t Colm becoming an optimist one of the signs of the apocalypse? Ahmm.

Anyway, let’s take a layman’s look at FATCA.

First of all, FATCA stands for Foreign Account Tax Compliance Act and is interested in the assets of US nationals not the business of Trinidad and Tobago citizens. Uh, that includes “accidental Americans” too, as in locals who were born in the US as well as their offspring.

These good folks—and Winston “Gypsy” Peters—will now be treated to a more rigorous examination of their assets than Americans who actually live in the States. And FATCA obliges non-US banks to do that dirty work for them or risk being frozen out of the US financial system. In essence, every bank in the world will become non-paid informants of the IRS.

The cost of America’s witch hunt for tax evaders was estimated to be around eight times the value of income the IRS expects to recoup. So, to make this exercise financially viable, the IRS will let the banks pick up the tab for their investigation of US citizens who are using their services.

And bear in mind that, whereas most nations exempt their expats from paying taxes once they can prove they are being taxed abroad, the IRS insists that all citizens must pay up regardless. The only other nation in the world that does that is Eritrea.

Photo: Oh gorm. Take Jack instead nah!
Photo: Oh gorm. Take Jack instead nah!

Since FATCA was launched in 2010, the number of Americans renouncing their citizenships has risen each year. In 2015, the figure went up by 20 percent from the previous year, which was also a record.

Former London Mayor Boris Johnson was among thousands who binned their American passports after the IRS demanded taxes on an apartment he sold in Britain.

Not one to miss a trick, the IRS raised the fee for renunciation to US$2,350, which is an increase of about 400 percent. Let’s just say the US taxman doesn’t sound like the kinda fellah to forget about Jack Warner’s not-too-unsubstantial debt to the stars and stripes.

So, should Trinidad and Tobago object to accepting such a costly and invasive excursion into its own banking system by the Yanks? Of course!

We should also refuse to fork out TT$300 for a plate of pasta at those stoosh restaurants in west Trinidad.

But if you are there already and want to get fed, you will pay. And if you want access to the US banking system, you will do the same.

Otherwise, the IRS will start by withholding 30 percent of financial transfers—even Moneygram and Western Union—to locals, whether they are American or not, until they can prove they are not involved in tax evasion.

Photo: Your money or your life? We don't accept bald headed wives anymore.
Photo: Your money or your life? We don’t accept bald headed wives anymore.

Flight attendants won’t be smuggling illicit drugs across international borders anymore. They would be sneaking in money from Kwesi’s aunty for his graduation suit!

Can Colm get Trinidad and Tobago another extension?

Well, Russia President Vladimir Putin also railed against FATCA, which he described as an attack on Russian sovereignty. Then, 24 hours before the US deadline, Putin caved and signed on 30 June 2014.

Think Sarcastic Smurf can drive a harder bargain than a man who rides horses bareback in Siberia and invades neighbouring countries in his spare time? FATCA chance! Just sign the damn thing and done, Kamla!

Statement from US Ambassador John L Estrada on 27 September 2016:

I am in Washington DC for meetings with the Department of State, Congress, and the White House. I am bringing positive reports about our strong and expanding ties with the Government and people of Trinidad and Tobago.

Over the last few months we have finalized a number of important mutual assistance programs. And I am confident we will continue to have an increasing number of active and engaged partnerships, across a broad range of areas, to include regional security, economic development and trade, and human rights.

The one issue that I had hoped would be resolved before my trip was FATCA legislation. I expressed the concerns of the Government of Trinidad and Tobago to US Treasury representatives.

The Government of Trinidad and Tobago has submitted to the Treasury a detailed explanation and step-by-step plan that Trinidad & Tobago intends to follow to bring the FATCA agreement into force. I will continue to work with Treasury representatives and Government of Trinidad and Tobago officials to assure that the Government of Trinidad and Tobago follows this plan and continues to work in good faith towards implementing the FATCA agreement.

About Mr. Live Wire

Mr. Live Wire
Mr. Live Wire is an avid news reader who translates media reports for persons who can handle the truth. And satire. Unlike Jack Nicholson, he rarely yells.

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    • Quite interesting. So we were not fully briefed by the PNM then. ??

    • Yes, we were. U ever hear about truth, lies and innuendoes? From what I read, the September 30 deadline was not a case of chicken licken and the sky falling. Which is why the Ambassador was also correct when he said info was supplied on plan/s to comply. And even after the December 31 deadline, there is still a 60 day grace period from my understanding. The problem, it seems, is that the journalists, like the population, were not getting the full picture from anyone and so could not ask informed questions (yes, I giving a bligh here lol).

    • Well, that’s a spin. The ultimate deadline was not the ultimate deadline. That’s the key I think.

  1. I think we should know today if the extension was granted…

  2. Hi Lasana, I read the above article and noticed that your ‘online newspaper’ has no ads. How do you finance it?

  3. thanks for the researched information

  4. Yeah… Well is long time now Kamla et al toying with the Americans… Steve. Ish. Jack.

  5. The irony is, depending on how the US election turns out in November, the silly FATCA law (a law written by private companies with a vested interest, and passed by the Obama administration) will be repealed.

    • But if the US has gotten the world to accept something that is so heavily tipped in their favour, why would Trump change it?
      I don’t think a Republican Gov’t will see any benefit in changing it personally. Remember Trump is for the rest of the world paying more not less.

    • Lasana Liburd – Actually that’s just ‘ole talk’ from Trump. The FATCA law (along with the other silly ObamaCare law, and the insidious TPP) are three of his targets on the chopping block.

      Specifically with regards to FATCA, US citizens living abroad are simply renouncing their US citizenship at record numbers more-so since the law went into effect, and/or many US citizens abroad are simply adding a 2nd or 3rd passport while not declaring to banks the fact that they are also US citizens (dual or triple)…doing so allows the citizen to circumvent the US IRS (and rightly so); it also relieves the foreign banks from responsibility to the silly FATCA law.

      Also, regardless of the laws that the USA strongarms other countries to pass to comply with FATCA (to give US defense contractors more funds, along with US banks etc), the foreign banks themselves will in all likelihood fight-back by not fully engaging the compliance discovery process as intense as they can, due to the great expense they incur in such an endeavor. In other words, although foreign banks will be forced to comply via the laws passed in their respective countries, those banks may not find it worthwhile to robustly follow through with the full customer profile relating to whether or not they are a US citizen.

      After all, all a customer has to do is check the ‘No…I am not a US citizen’ box at account opening.

    • Che Hackett some banks’ idea of fighting back is refusing to open accounts for Americans. I don’t know which way this will swing. But it will be interesting to revisit this chat at some point.
      In any case, Donald Trump is not the favourite to win the race to the White House according to polls.

    • There’s just too much ‘fight-back’ on FATCA. And no, the entire world has not exactly accepted it…and even those that did (like Russia in 2014), the adapted laws in those countries are shaky at best.

      Btw, Putin is smart. When he grudgingly signed the applicable law in Russia, he knew that the rampant corruption and shadiness in Russian dealings, would in essence render FATCA impotent in Russia anyway, law or no law.

    • Lasana Liburd — Not to share too much of my business on here (???) I’m a dual US citizen…and trust me, it is still extremely easy to open offshore bank accounts anywhere, even in FATCA compliant countries, once a US citizen simply checks the ‘appropriate’ box. Banks only publicly say they comply with the law, but that’s hogwash…lol

    • Always interesting to discuss global politics. Although I have to admit that I’m a layman on such matters.

  6. How everybody postponing everything so ?

  7. Sarcastic Smurf!???.
    The Government should have know today whether they were granted an extension.

  8. Not signing, suggests that people are trying to cover up their ill gotten gains, or give them time to try and hide it elsewhere.