Covering FATCA gave the MFF YouTube channel its first big break. But I’ve always disliked bringing it up since then. There’s the fiendish complexity for one thing. But it also smashes so many of the convenient fictions we believe about US power. We like to tell ourselves that the US is just another country. Sure, we’re powerful, and we do what we can to help, but generally we let the world do as it pleases. FATCA makes it clear that very little of that is true.
The Foreign Account Tax Compliance Act passed in 2010. It was implemented worldwide in 2014. Throughout this process, I expected there to be international outrage over the way that the law imposed US oversight and control over every bank in the world. The legislation is Imperialist in a very straightforward way. Surely, the world couldn’t possibly let us get away with it? But they have.
This video covers an enforcement action carried out last week in India. Millions of Indians were required to fill out a form or lose the use of their bank accounts. This wasn’t too onerous a requirement, and while it certainly caused some stress, it probably didn’t destroy any lives. But that’s not the point. Millions of Indians were required to do something last week, on their own soil, by US law. American Empire is very real, and very ignored. FATCA may be the most egregious bit of law-driven US empire. But then again it may not be. It could be the tip of the Iceberg. The complexity of bureaucracy and modern life itself keeps us from knowing…
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Video Transcript after the jump…
Three and a half years ago I published a video calling attention to an extraordinary piece of US legislation. FATCA, the Foreign Account Tax Compliance act, is the most nakedly Imperialist law put forward by a Western power since the 1970s. I’d suggest you watch the whole video, but put briefly every bank in the world has been placed under the oversight of the United States Treasury Department, and the US Internal Revenue Service. In India, in recent weeks, we have gotten one of the most naked expressions of how this works.
World-wide FATCA implementation started on July 1st, 2014. The Inter-Governmental Agreement India was forced to sign with the US Treasury Department was implemented on August 31st, 2015. On April 11th of this year, the Indian government announced that every bank account holder in India who opened an account between those two dates was obligated to file a FATCA disclosure form. If they failed to do so, their bank accounts would simply stop working on May 1st.
The Account freezes haven’t happened yet, possibly due to technical difficulties. But Millions of Indians have been affected. By a US law. Indian banks, and Indian customers, with no connection to the United States have been forced to scramble to implement US laws.
There are a lot of ways to minimize this. All the form asks is that the individuals certify that they don’t have any relation to the US economy. That’s True. That’s all that Indian Banking Customers have been required to provide. So far. People also pitch this as being the product of cooperation between the Indian and US governments. That is simply not true.
The Inter-Governmental Agreement was not entered into voluntarily by the Indian government. The Agreement was the only way that India’s banks would be allowed to continue to operate internationally. This is a result of a US law enacted back in 2010. US law has changed, but it was not a change in the name of cooperation. It was a change that told the rest of the world what it had to do.
As the Indian government’s own paperwork states, the implementation of this US Law, on Indian soil, has required sweeping changes to Income tax law.
http://www.incometaxindia.gov.in/news/guidance-note-on-fatca-and-crs-may-2016.pdf
http://www.thehindubusinessline.com/money-and-banking/relief-for-banks-as-finmin-relaxes-fatca-compliance-norm/article9055798.ece
And it’s not just the Indians. 113 other countries have similar agreements in place, signing their banking sovereignty over to the United States.
https://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx
I have been shocked by how willing the world has been to let this happen. Keep it in mind the next time somebody tells you that American power is declining. To be sure, there are some benefits here. Every government in the world has an interest in the death of bank secrecy. But this is exactly the wrong way to go about a Global solution. Consent should be the road forward if we want a peaceful world. Imperialist solutions do not bring stability in the long term.
Thanks for watching, please subscribe, and if you want to know the real truth about FATCA, I suggest you read my essay, FATCA and the New Birth Of American Empire, available on Amazon now.