Vatican Bank Complies With FATCA. St. Lawrence Pray For Us!
Forbes is reporting on the Vatican Bank’s decision under pressure to comply with the FATCA requirements for reporting on American citizen accounts.
In his annual Christmas messages to more than one billion Catholics, the Pope may have left out something: offshore account compliance. Maybe, but the U.S. Treasury is more than happy to fill in the blanks. Just before Christmas, the Holy See reached the substance of an Intergovernmental Agreement (IGA) to hand over American account details. FATCA is everywhere, and the fact that the Treasury Department now trumpets the Vatican deal should come as no surprise.
Robert Wood writes of the unprecedented overreach and swipe against sovereignty that is the FATCA.
The timing is serendipitous. Pope Francis has suggested that the Vatican Bank could use a makeover. FATCA—the Foreign Account Tax Compliance Act—was quietly enacted in 2010. After a four-year ramp up, America’s global tax law is now in effect. Never before has an American tax law attempted such an astounding reach. FATCA requires foreign banks to reveal Americans with accounts over $50,000. Non-compliant institutions could be frozen out of U.S. markets, so everyone is complying.
Even historically antagonistic countries like China and Russia are also complying.
The IRS has a searchable list of financial institutions. See FFI List Search and Download Tool and a User Guide. Countries on board are at FATCA – Archive. Even notoriously difficult China and Russia are on board. FATCA’s 30% tax and exclusion from U.S. markets would be so catastrophic that everyone has opted to comply. Foreign financial institutions must withhold a 30% tax if the recipient isn’t providing information about U.S. account holders. The choice is simple, and that’s why everyone is complying.
Foreign Financial Institutions (FFIs) must report account numbers, balances, names, addresses, and U.S. identification numbers. For U.S.-owned foreign entities, they must report the name, address, and U.S. TIN of each substantial U.S. owner. And in what is a kind of global witch hunt, American indicia will likely mean a letter.
With ever greater and more lauded ‘transparency’ infused into modern banking (read: more personal financial data being revealed and reported to governments); what kind of leverage is handed to politicians and bureaucrats?
Why should the Church want private account information of potential donors and Catholic supporters in the hands of the U.S. Government? Do they have any choice? How did foreign nations like the Vatican get in position where the U.S. taxes them for non-compliance!
It’s always a mistake to think that surrendering true rights and freedoms in the name of safety, security, or visibility is wise. Bigger more powerful governments are even more corruptible. If the Church wants to protect the privacy of its account holders they certainly can. Investors who would rather reveal more data (are there any?) or see a more transparent operation can always go elsewhere.
I question whether these changes at the Vatican Bank are really about honesty and consumer protection at all. It’s more likely they’re about force and ever-increasing central control. That’s what’s being protected and it’s at the Church’s expense.
St. Thomas Becket died protecting the Church’s autonomy, and remember what happened to St. Lawrence when the Prefect of Rome told him to present all the riches of the Church? He refused, and was grilled well on both sides.
