Parliament will convene today to debate the Joint Select Committee’s report on the Foreign Account Tax Compliance Act (FATCA) legislation. The bill has had a highly divisive and controversial history since it was first laid in the House almost six months ago. Even after the Government agreed to send the bill to the JSC the public debate continued unabated. Two developments during the course of that public debate were of particular note.
The first is the fact that the Leader of the Opposition, Kamla Persad-Bissessar, wrote a letter to the recently inaugurated US president Donald Trump, asking him to state his position on FATCA. It is to be noted that before she sent her letter she had advised the Government that it should send such a letter.
In her letter she noted that listed among Trump’s campaign pledges was revocation of executive actions taken by Barack Obama “that exceeded his authority as president”. In this regard she pointed to Item 2013 which identifies information reporting by foreign financial institutions and the withholding of certain payments to foreign financial institutions and other foreign entities, on this list, adding that “this would appear to cover non-treaty intergovernmental agreements with Trinidad and Tobago and other countries to implement FATCA under terms not codified in US statute or treaty”.
The other development is the fact that the Bankers Association of Trinidad and Tobago (BATT) which has been, next to the Government itself, the most vociferous advocate in favour of the legislation, brought to the country a person described as a “FATCA expert” to argue that the FATCA legislation in the US was not going to be repealed and that not complying with FATCA would put the country at “great risk”.
It is difficult not to assume that the “FATCA expert”, one Denise Hintzke, global leader of the FATCA Initiative for auditing firm Deloitte & Touche, was brought specifically to counter the idea expressed by the Leader of the Opposition in her letter that the FATCA legislation in the US might be repealed.
While Ms Hintzke may have had her view we should not for a moment imagine that such a view has unanimous support in the US. Indeed there is significant agitation in that country for the repeal of FATCA. One of the most well-known proponents of such repeal is James George Jatras who is, among other things, a former US diplomat and adviser to the US Senate Republican leadership. He writes and speaks on FATCA from a legislative and political perspective and has established the site www.repealfatca.com.
Mr Jatras has kindly given his permission for the reproduction of the following:
“I have noticed that at least one person described as a FATCA expert with a US-based major accounting firm has stated to T&T media that FATCA will not be repealed, and that President Trump has no authority to repeal FATCA.
“Rather than address my comments specifically to any one FATCA compliance specialist or firm, let me make the following observations. First, the expertise needed to comply with FATCA or any other law or regulation is very different from that of a legislative specialist in getting laws passed—or repealed. Persons who have little or no experience with the legislative process should stick to their areas of expertise.
“Second, yes, of course Trump himself cannot repeal FATCA. Congress needs to do that. This year, with united Republican control of the US government, there will be a major tax reform package approved by Congress, and Trump will sign it into law. A major push is about to begin to ensure FATCA repeal is part of that package.
“Third, while Trump cannot repeal FATCA by himself, he can revoke the statutorily unauthorised so-called ‘intergovernmental agreements’ (IGAs) that T&T is being demanded to sign under threat of sanctions. Without the IGAs, FATCA is a dead letter. Remember, T&T is being forced to implement the IGA, not FATCA per se.
“Fourth, citizens of T&T should find offensive the scare tactics being employed by the Rowley Government, Ambassador Estrada, the BATT, and other voices threatening that the US will lay waste to T&T’s economy if you don’t comply with an edict you are neither legally nor morally obliged to obey. Since when is a sovereign country ruled by the laws enacted by a foreign government under a doctrine of might makes right? Granted, that is what FATCA does, but that’s also why Mrs Kamla Persad-Bissessar is right to question it. Such threats are an argument for repeal, not submission.”
My own view on FATCA has been stated on a number of occasions before. I subscribe to the view that FATCA is “one of the most arrogant and draconian assaults on sovereignty in modern human history since, through FATCA, the US uses its unique position as a centre for the global movement of cash to force every other sovereign nation on earth to do the bidding of its own Internal Revenue Service.” However, given our small economy, its dependence on the United States and its current fragile state, my position is that we should seek to avoid the risks attendant on non-compliance and pass the legislation.
But the fact that we are forced to bend over to be shafted does not mean that we have to like it!