The Mouse That Roared - Belgium Rules FATCA IGA Violates Europe’s GDPR

PREP Podcaster - ”Success Favours The PREPared Mind”

May 27, 2023 - Participants Include:

Virginia La Torre Jeker - @VLJeker

John Richardson - @Expatriationlaw

The decision may be accessed is here.

Last week a Belgian tribunal charged with investigating and determining violations of the GDPR "General Data Protection Regulation" ruled on a complaint brought two an "Accidental American" in Belgium and the Association of Belgium Accidental Americans.

The tribunal ruled that to send information to the IRS under the FATCA IGA did indeed violate the GDPR. The decision can (and certainly will) be appealed. The decision is long (77 pages), complicated and identified a number of different reasons why the FATCA IGAs conflicted with the GDPR. This is hardly surprising given the the whole purpose of the FATCA (expressed in the FATCA IGAs) is is to deprive US citizens of any and all rights with respect to their banking information.

The Belgium decision has now created a situation where as long as there are U.S. "reportable accounts" in Belgium the transference of FATCA data to the IRS will result in either:

- a violation of the FATCA IGAs (and therefore U.S. law); or

- a violation of the GDPR (and therefore Belgium law).

It would seem that the only way to avoid violating the law would be if there were NO FATCA data to report. This can be achieved by and only by either

- terminating the banking accounts of all U.S. citizens in Belgium; or

- relying on the provision in the IGA that does not require the reporting of "Depository" (not custodial) accounts with a balance of less than $50,000. (See page 8 of the U.S. Belgium FATCA IGA.)

"A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Belgian Financial Institution elects otherwise, either with respect to all New Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Belgium provide for such an election, the following New Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts: 1. A Depository Account unless the account balance exceeds $50,000 at the end of any calendar year or other appropriate reporting period."

https://home.treasury.gov/system/files/131/FATCA-Agreement-Belgium-4-23-2014.pdf

In any case, the real issue is whether Belgium is to be run by the United States (as a territory or vassal state) or whether Belgium is a "sovereign country".

It will be interesting to see how this develops.