Suddenly, expats in the US have little to bank on

European expats working in the US are suddenly finding banks in their home countries are closing their securities accounts because of new laws introduced by Washington to curb overseas tax evasion.

Using an ATM
Under the headline ‘Global Expats in US Scramble After Being Kicked Out by Home-Country Banks’, the Wall Street Journal reports that the problem stems from provisions in the Foreign Accounts Tax Compliance Act (Fatca) which, from 2014, require foreign banks to disclose the details of accounts by US citizens living abroad and foreign expats working in the US. Written by Sabine Muscat, herself a German journalist based in Washington, the article says: “For many international professionals, a posting to the US is often a great career opportunity and personal adventure.“But in recent years, foreigners living and working in this country have faced the same challenges as American citizens and green card holders abroad: they are US residents for tax purposes – and their foreign assets have to be reported to the Internal Revenue Service to conform with US requirements.“As it turns out, these requirements are considered exceedingly onerous by many foreign financial institutions. And as a result, many customers have been forced to liquidate or restructure their financial assets.“European companies posting managers to their US operations now routinely warn their employees of potential banking problems upon relocating to the US – giving them enough time to identify the banks that are willing to let them keep securities accounts even after they relocate.”The report cites the case of a Belgian lawyer working in New York who was told by her bank at home, Belfius, that she would have to shut her securities account in 2014. Later in the year she received a financial gift from her father but his bank in Luxembourg, BNP Paribas, refused to take her on as a client when they were told she lived in the US.Martin Bergmann, a German expat in Washington, DC, also told the newspaper that Deutsche Bank, his bank of many years, informed him his securities account would be closed because of “increased regulatory requirements” in America.The report said that many other banks, including HSBC, Credit Suisse and Singapore’s DBS Bank, are now excluding expats in the US from securities accounts, though current and savings accounts are exempt.Companies are now taking pre-emptive action when sending staff to the US. “We actively inform our employees in the pre-delegation briefing about the issue and recommend that they speak to their bank as early as possible to discuss their options,” said a spokeswoman for the German chemical company BASF.Siemens and Bosch are taking similar action while BMW is has entered into a special arrangement with a Canadian bank to which employees can transfer their securities, rather than being forced to liquidate their portfolios when moving to the US.“We wanted to make sure that our expats don’t face adverse consequences due to the reaction of German banks,” a BMW spokesman was quoted as saying.As previously reported on relocatemagazine.com, the introduction of Fatca has resulted in record numbers of Americans living and working abroad renouncing their US citizenship in the past two years.For more Re:locate news and features about the US click here and for more items about tax click here

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