The Israeli High Court’s temporary injunction against the enforcement of America’s highly controversial global tax law “should serve as a wake-up call for other countries to rethink enforcing this toxic, flawed, imperialistic legislation,” affirms the CEO of one of the world’s largest independent financial advisory organizations.
The comments from Nigel Green, chief executive and founder of deVere Group, come as Israel’s High Court of Justice threw a spanner into the Israeli government’s plans Wednesday to start actively implementing the U.S.’s Foreign Account Tax Compliance Act (FATCA) in the country.
Under FATCA, all non-U.S. financial institutions worldwide are required to report the financial information of American clients and U.S. green card holders who have accounts holding more than $50,000 directly and routinely to the United States.
Days before this process was due to go into operation in Israel, Justice Hanan Meltzer has ordered officials to stop the preparatory work. An emergency hearing is to be held on the matter beforeSeptember 15.
The deVere CEO affirms: “Justice Meltzer’s action should be championed. His wise caution should serve as a wake-up call for other countries to rethink enforcing this toxic, flawed, damaging legislation that is being imposed on sovereign states around the world by the U.S.”
Nigel Green, a long-time, vocal critic of FATCA, goes on to say: “There are important questions to be asked about the imperialistic nature of FATCA.
“Countries and FFIs have been coerced into complying with FATCA’s sovereignty-violating, expensive, burdensome, privacy-infringing regulations by the U.S. – or face heavy penalties. In effect, these countries and FFIs are now working as de facto agents of America’s tax authority.”
He continues: “It is claimed by its proponents that this law is designed to catch tax evaders who illegally shelter money offshore. This is a noble aim.
“But FATCA cannot possibly tackle this extremely important global issue effectively due to its dragnet, untargeted approach.
“Instead what it does – because of its plethora of serious unintended adverse consequences – is to brand the 7 million Americans who choose to live and/or work overseas, including many of the 300,000 in Israel for example, as financial pariahs.
“U.S. expats are now routinely rejected from foreign financial institutions (FFIs), such as banks in their country of residence, because FATCA’s costly and onerous regulations mean Americans are now typically deemed more trouble than they are worth.
“Similarly, American businesses working in international markets are now often branded with a leprosy-like status. Clearly, this can only be detrimental to their global competiveness and could, in turn, hit American jobs and the long-term growth of the U.S. economy – which would then, of course, have far-reaching consequences beyond the U.S.”
Nigel Green concludes: “I hope that Justice Hanan Meltzer’s bold action will encourage other people of influence worldwide to reconsider FATCA. This could be a landmark moment in the fight to have this controversial and damaging law resigned to the history books.”