An Israeli judge has ordered that the state suspend work on the implementation of America’s foreign account tax compliance act (Fatca), a move welcomed by deVere Group chief executive Nigel Green.
According to Israeli newspaper Haaretz, justice Hanan Meltzer has set a date of no later than 15 September to hear arguments against a lawsuit filed by a non-profit group associated with the US Republican party.
They have argued that Fatca violates Israel’s Basic Law on Human Dignity and Liberty, contradicting the right to privacy, property, and equal treatment.
Israel’s parliament, the Knesset, approved a law implementing the agreement two years ago. It requires financial institutions to report details of US citizen and green card holder accounts to the Internal Revenue Service (IRS) if they hold more than $50,000 (£37,857, €44,787).
Lawyers representing the non-profit group have argued that the law makes no effort to minimise the damage it causes or to secure the information being shared.
In the interim, preparatory work to implement Fatca has been halted.
“Americans are now typically deemed more trouble than they are worth.”
A long-time critic of Fatca, deVere’s Green believes that Meltzer’s actions “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 US.”
He added that there are “important questions to be asked about the imperialistic nature of Fatca”.
Green is especially critical of the expensive, burdensome and privacy infringing elements of the act that he believes make countries and foreign financial institutions (FFIs) “de facto agents of America’s tax authority”.
“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 seven million Americans who choose to live and/or work overseas, including many of the 300,000 in Israel for example, as financial pariahs.”
Citing a growing number of expats rejected by FFIs because of the cost of Fatca compliance, Green said that “Americans are now typically deemed more trouble than they are worth”.
“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,” he said.
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