The European Parliament passed by a large majority a motion to call for the renegotiation of deals signed by Romania and most other EU member states with the US in which financial institutions in these countries must report data to the American IRS about their customers’ accounts and contracts that may have duties based on US fiscal law, according to Profit.ro.
According to the motion, the application of FATCA (Foreign Account Tax Compliance Act) on EU territory leads to a violation of the Union legislation regarding the protection of personal data, the right to intimacy and private life and limits access to bank account and payments for over 100,000 EU citizens. The purpose of FATCA is to reduce fiscal fraud generated by transborder activity of US individuals and companies. The agreements are not reciprocal, as the US has no obligations to report data about the status of European clients of US financial institutions.
“The European Parliament regrets the inherent lack of reciprocity of the intergovernmental agreements signed by the member states, especially when it comes to the quantity of information that is exchanged, as it is more important for the member states than for the US; we invite all member states to collectively suspend the application of their intergovernmental agreements until the US will agree to a multilateral approach to automatic information exchange, either by abrogating FATCA and adopting the Common reporting Standard, or by renegotiating FATCA at the EU level and introducing reciprocal obligations on both sides of the Atlantic,” the motion reads.
Romania signed the FATCA agreement with the US in 2015, and over 240 financial institutions in Romania, with the exception of mandatory and optional private pension funds administrators, report to the IRS through ANAF information about their clients who might have financial obligations towards the US. Over 100 countries have signed such agreements with the US.
Many Americans in Europe are denied bank accounts or services due to the significant financial and administrative burden imposed by FATCA, which can be between EUR 1 million to 5 million per year, depending on the size of the financial institution.