like me, you are one of many millions of Americans who has money deposited in a foreign financial institution. That's due to a terrible 2010 law called the Foreign Account Tax Compliant Act, or FATCA (such restraint there in not adding the "TS" at the end!), which opens up Americans' foreign holdings to microscopic scrutiny and even seizure by the Internal Revenue Service.Your banking information is an open book, if,
I have written previously about how the law is making it nigh on impossible for many of the estimated 6 million Americans living abroad to have a basic bank account, since overseas institutions rightly do not care to work for the IRS. Now Reason Contributing Editor Michael Young, who lives in Lebanon, explains FATCA's relationship with the ongoing National Security Agency spy scandals:
FATCA is even worse than the already invasive collection of telecommunications metadata being carried out by the NSA. Metadata is information pertaining to communications, but does not include the actual content of conversations. FATCA is a look into the content of accounts, and would almost certainly have provoked outrage had it been implemented in the United States.
Can the information gleaned through FATCA be shared with other government agencies, especially those seeking to uncover terrorist activities? According to the Association of Certified Financial Crime Specialists, the answer is yes. A closer examination of the US tax code, the ACFCS has argued, proves that anyone who actually "believes that his or her problems with US agencies from disclosure of non-US accounts will be limited to tax issues is mistaken."
Title 26, Section 6103 of the tax code opens doors that allow US government agencies, including intelligence agencies, and even Congress, to gain access to information obtained through FATCA. For instance, ACFCS notes, Section 6103 "permits disclosure of 'return information' to certain Federal officers and employees and law enforcement agencies for purposes of combating terrorism."
Here FATCA intersects with the logic behind the NSA surveillance programs, allowing federal agencies to share the private accounts of individuals in criminal investigations. But while there are legal safeguards to protect the rights of such individuals, the reality is that when it comes to terrorism, the tendency of judges is to give the benefit of the doubt to intelligence and law enforcement agencies.
Bonus reminder: U.S. efforts to infiltrate and degrade Swiss banking secrecy was one of the prime motivations for Edward Snowden.