The Association of Accidental Americans (AAA) has filed a complaint against France over its compliance with the US’ Foreign Account Tax Compliance Act (Fatca).
The group represents people who have acquired American citizenship by birth or who were born in the US but have moved to another country shortly after.
The complaint argues that the intergovernmental agreement (IGA) between France and the US signed on 14 November 2013, which enforces Fatca in the European country, is in breach of European law.
Fatca requires foreign financial institutions to share bank account data of US citizens with the Internal Revenue Service (IRS) for taxation purposes.
Violation of privacy
The association says the US legislation obliges financial institutions to transmit all financial data of Americans living abroad to the tax authorities in the States.
It considers the IGA to be a violation of the EU’s General Data Protection Regulation (GDPR) by authorising the “massive storage and transmission to the United States of the personal data of numerous individuals” without their consent.
The AAA also argues that there are no protections in place for such information and that US citizens are not allowed to access the data.
“This lack of safeguards, coupled with the disproportionate nature of the information transmitted to the IRS, clearly violates EU law on personal data protection,” said Patrice Spinosi, the AAA’s lawyer.
“Moreover, as the European Court of Justice has ruled, the US does not give adequate protection to individuals’ fundamental rights in the treatment of their data.”
Not stopping
The lawsuit follows the group’s defeat in France’s top court in July 2019.
“I regret the French government has done nothing about the problem,” said Fabien Lehagre, president of the AAA.
“The government is also well aware that banks in France might close the accounts of 40,000 French ‘accidental americans’ by the end of the year.
“This is because these individuals’ are unable to comply with the Fatca requirement to provide a US taxpayer identification number. But the government has not started negotiating a solution to that either.”
The European Commission will have 12 months (until 3 October 2020) to assess and make a decision on the case, while the activist group said that the European Parliament will hold a public hearing on the matter on 12 November 2019.
The legal challenge follows a move by two dual Canadian/Us citizens who are taking a similar case to the Canadian federal court of appeal.
