Europe to US: Pass new laws if you want a data-transfer deal
The Foreign Account Tax Compliance Act (FATCA) might serve as a foreshadow of how these discussions might play out.<p>If you&#x27;re not familiar, FATCA came out of the financial crisis as a way to uncover the undeclared assets held in foreign banks by wealthy Americans.<p>To get foreign governments to go along, the US more or less forced their parliaments to sign agreements with the US and pass local enforcement laws.<p>In short, these rules compelled domestic banks to share the bank account data of any US person in their system. If the bank didn&#x27;t comply, the US could seize 30% of their US-based assets.<p>The results have been mostly catastrophic.<p>For one, FATCA didn&#x27;t capture a lot of revenue for the IRS as most wealthy Americans shelter their assets domestically in trusts and LLCs.<p>Second, it had the effect of ruining the lives of ordinary Americans living abroad who, while by no means wealthy, were working middle class. People like myself had our bank accounts closed and were subject to being presumed money launders and tax evaders. Many expats -- including accidental Americans who only gained US nationality because they were born on US soil while their parents were on short-term work assignments -- lost their retirement accounts and mortgages.<p>More damningly, the US continues to refuse sharing bank account data of foreigners living in America back to their home countries, as per the agreement.<p>The reason for this refusal? The US government cites American banking privacy laws.<p>In other words, FATCA turned the US into the world&#x27;s largest tax haven.<p>I have no doubt that the US will leverage its position as global tech leader in any data sharing deal to create a similar useless structure abound with unintended negative consequences.