Rocha on Balancing Rights and Power between State and Taxpayer

Sergio André Rocha recently posted a discussion on information, transparency, and the rights of taxpayer versus those of states, of interest. He argues that hard-fought rights needed to balance the unequal power between state and individual are being abandoned in the populist rush to protect the state against multinational tax dodging. Central to this argument is the claim that states are not hapless victims of ruthless tax managers and CEOs, rather they are the very architects of the system. He worries, I think, that suspending taxpayer rights to get at the big bad corporations will ultimately result in suspending rights for individuals, setting up the conditions for states to abuse their power. Here are a few excerpts (footnotes omitted):

There is no doubt that taxation is one of the areas where the balance between the legitimate exercise of Government power and the illegitimate violation of citizens’ rights is most challenging. 

...The transformation of the majority of modern States into Fiscal States – i.e., States that depend on tax collection to obtain the resources to fund all its activities – has changed the nature of the obligation to pay taxes. Some authors have begun to argue that there is a fundamental or constitutional obligation to pay taxes.

However, this line of thought, to which we subscribe, has been used to support an inversion of the whole structure of tax systems. Legal principles that are, at their core, protections of taxpayers against the State have been transformed into protections for the State against taxpayers. 

Let’s consider, for instance, the principle of transparency, which is at the center of modern constitutional, administrative, financial, and tax law. It is, first and foremost, a protection for the citizens against the State, establishing as a goal a state of affairs that guarantees full disclosure of a government’s actions to its citizens. 

The principle of transparency is not a one-way street. It also applies to citizens, requiring disclosure and combating opaque situations that prevent the due application of laws in general. Nevertheless, one should not forget: State and Government transparency come first. 

This maxim seems to have been forgotten by those now in charge of reshaping the international tax regime. 

...[OECD Director Pascal Saint-Amans recently] stated that, "Transparency, from my perspective, is transparency from the taxpayer to the Tax Administration, and maybe the other way around as well. ..."  

We should make no mistake: once legal principles have been mutilated and taxpayers’ rights overturned, effects will be felt by all taxpayers – individuals and legal entities alike. 

...Both the Global Forum’s and BEPS’ work share a common feature: they are aimed at optimizing States’ tax collection. The taxpayer – the citizen – is not in their focus. This is unacceptable. There is nothing more urgent than recovering the protagonist role of the taxpayer in taxation, where he rightfully belongs. This does not mean that their focus is completely misguided. It means that they need to find a way to achieve their rightful objectives without leaving taxpayers’ rights behind.

More at the link above; worth the read.

Uncle Sam Wants...Who? At UBC Law This Week

This week I will be in Vancouver to present a paper at the UBC Allard School of Law. The paper, "Uncle Sam Wants...Who? A Global Perspective on Citizenship Taxation," is now available in draft form on SSRN. Here is the abstract:

Across the globe, banks are flagging accounts with indicia indicating their owners may be “US Persons,” making it possible for the United States to enforce its taxation of nonresident citizens extraterritorially for the first time in history. The indicia method constitutes a mining expedition for US citizens carried out by foreign banks and governments. Establishing a tax jurisdiction in this manner is unprecedented and has significant practical and normative consequences. In the case of so-called “accidental Americans,” it violates one of the most fundamental and universally- acknowledged tenets of taxpayer rights, namely, the right to be informed about what the law requires. Third party indicia-searching should be universally rejected as a means of identifying a taxpayer population. Instead, the United States itself is responsible for cataloguing, informing, and educating its global population of taxpayers. Those who don’t belong in the system should be allowed to opt out without cost.

I welcome comments on this work in progress.

Understanding the Accidental American: Tina's Story

Tax Analysts has published my talk on taxpayer rights and citizenship-based taxation as enforced via FATCA, which I gave in November at the International Conference on Taxpayer Rights in Washington DC, organized by National Taxpayer Advocate Nina Olson. Tax Analysts' content is normally gated but they have made this column available on their free site.

FATCA, Citizenship-Based Tax, and Taxpayer Rights

I recently sat down with Bob Goulder of Tax Analysts to talk about FATCA, citizenship-based taxation, renunciation, and taxpayer rights.

Global Justice Post-2015

The Global Justice Program at Yale University is currently hosting a conference exploring the post-2015 agenda for human rights and global justice. List of speakers and topics:

Day One: October 30 

Panel 1: Global Tax Fairness: Allison Christians, Manuel Montes, Erika Siu; Chair: Zorka Milin)  

Amartya Sen Prize Contest Ceremony 

Panel 2: Illicit financial flows, human rights and the post-2015 agenda - Discussion of Independent Expert’s Report: Juan Pablo Bohoslavsky, Nicholas Lusiani, Léonce Ndikumana, Esther Shubert; Chair: Tom Cardamon 

Panel 3: Addis, Post-2015, and future efforts against Illicit Financial Flows: Tom Cardamone, Steven Dean, Gail Hurley and Jakob Schwab; Chair: Laura Biron 

Day Two: October 31  

Statement of the Health Impact Fund (HIF) and mini-HIF, including discussion: Aidan Hollis, Thomas Pogge; Chair: Alex Sayegh  

Panel 4: Mini-HIF: Piloting the Health Impact Fund: Laura Biron, Aidan Hollis, Peter Maybarduk, Thomas Pogge, Jeffrey Sachs, Richard Wilder; Chair: Tendayi Bloom
Concluding Session on the Health Impact Fund  

Panel 5: Individual Deprivation Measure, Poverty Measurement: Sharon Bessell, Thomas Pogge, Scott Wisor; Chair: Yuan Yuan. 

Day Three: November 1  

Panel 6: Oslo Principles on Climate Change Obligations: Thomas Pogge, Jaap Spier, Kira Vinke; Chair: Shmulik Nili 

Panel 7: Sustainable Development Goals (Daniel Esty, Thomas Pogge, Jeffrey Sachs; Chair: Corinna Mieth.

I presented yesterday on the topic of "Global Tax Fairness." I discussed the connection between taxation and human rights, highlighting the challenges for the realization of rights and justice that are posed by tax competition and exploring whether and how systemic change is possible. I have a couple of works in progress on the topic and will post drafts when ready.

In the meantime, I'm experimenting with making my powerpoint presentations available online (along with other resources in the future). You can view a list here: see pull down menu entitled "resources". Comments and suggestions are welcome.

Engineers Without Borders Panel on "Illicit Financial Flows"

Tomorrow I will be participating on a panel on "Illicit Financial Flows" at the Engineers Without Borders 2015 National Conference, currently taking place in Montreal. The goal of the session is to discuss the nature and impact of so-called illicit financial flows in Canada, the United States, and the world's developing countries.

I have been asked to address the question "what promising policy instruments or reforms could potentially curb outflows of illicit finance?" The use of the term illicit in this context seems to be an attempt to elide the distinction between avoidance and evasion. Those familiar with my work know that I approach this terminology with caution because I think it is a mistake to conflate evasion and avoidance into a single category for purposes of advocating generalized policy reform. In a paper I published last year on Evasion, Avoidance, and Taxpayer Morality, I argued why I think the phenomenon of tax evasion is distinct from tax avoidance, each represents a different type of governance failure, and each requires a tailored response. But I certainly understand the instinct to see both tax avoidance and tax evasion as essentially drains on public resources that we'd like to imagine would otherwise be available for various socially useful projects.

I'll try to lay out the field as I see it in the time allotted. It is a big topic to cover in a limited time. I suppose I could just plug Martin Hearson's very good work on this subject. I am curious as to how Engineers Without Borders came to concern itself with this issue; the rest of the conference focuses on innovative, sustainable, and inclusive development.  I think it is another sign that tax justice advocacy groups, like the Tax Justice Network, are successfully inducing NGOs across a broad spectrum to view taxation as a human rights issue that permeates all facets of social and economic development.

Report by UN Special Rapporteur on Tax and Human Rights

UN Special Rapporteur Magdalena Sepulveda Carmona recently posted this Report of the Special Rapporteur on Extreme Poverty and Human Rights; of interest. Here is the abstract:

In the present report, the Special Rapporteur on extreme poverty and human rights presents fiscal policy, and particularly taxation policies, as a major determinant in the enjoyment of human rights. Taxation is a key tool when tackling inequality and for generating the resources necessary for poverty reduction and the realization of human rights, and can also be used to foster stronger governance, accountability and participation in public affairs. She outlines relevant human rights obligations to guide and inform State revenue-raising practices, including the duty to use the maximum available resources for the realization of economic, social and cultural rights. She also analyses the questions of how the principles of non-discrimination and equality and the duty of international cooperation and assistance should inform taxation policies at the global and national levels. After assessing how revenue-raising policies and practices can be strengthened through a human rights-based approach, she makes recommendations for fiscal and tax policies that are grounded in human rights and can lead to poverty reduction, sustainable development and the realization of transformative rights.

Tax and Human Rights: What's Next? #TJHR

Yesterday we concluded the McGill Tax Justice and Human Rights Research Collaboration Symposium. It was an action-packed three days and I left feeling that what I had set out to generate had in fact been accomplished: a cross-platform, cross-disciplinary conversation on the intersection of taxation and human rights. Everyone learned a great deal about a range of people who want to think about how taxation and human rights concepts work together, and a range of ideas and challenges generated by that exercise. I think I came away with at least a sense of the current landscape of this field, its recurring themes and questions, and where the research is likely to go in the near future. 

I'll write some more on this as I have a chance to reflect on the proceedings and review some of the tape of the sessions I had to miss (running a conference is all too unfortunately more about moving people around and dealing with technology and such than sitting back and listening). We have sought waivers from the conference participants and will be able to upload some of the sessions, or parts thereof, in the coming weeks. We are also in process of obtaining permission to post papers and presentations, and as those come in we will post those as well.  Not all presenters and presentations will be available online but enough, perhaps, to give a sense of what took place over the past three days. Updates on available content will be available at the conference website, linked above. 

As with any conference, what the participants say is only part of the story: the other and more lasting part is the networking and connection building that takes place. I heard from some of the participants about exciting new connections and possibilities for future collaboration. I myself managed to connect with many participants with whom I hope to collaborate again in the future. It is an exciting field and one I believe is gaining momentum. There is much work to be done.

The photo on the conference flyer, reproduced above, is a detail of the grand entrance to Old Chancellor Day Hall at McGill. We added it to the flyer as a tribute to the history of research and learning that goes on in this institution, and as a symbol of openness, welcome, and inclusion that characterizes the Faculty of Law at McGill. I hope and believe that the symposium opened many doors for future collaboration on the subject of tax justice and human rights. 

More updates in the weeks to come. 

Today at McGill Law: Final Day of Tax Justice and Human Rights Research Collaboration Symposium #TJHR

Today is the third and last action-packed day of  conversation among students, academic researchers, and tax justice advocates and activists on the topic of tax justice and human rights. It has been a fascinating and enlightening experience so far. You can continue to follow the proceedings and make comments on twitter at #TJHR. Program and speaker info here.

Here is the final day's lineup:

Time	Topic	Location
08:30 – 09:00	Registration & Arrival Tea/Coffee	Atrium
09:00 – 10:30	6. Reducing Inequality: Tax Avoidance and Capital Flight Ofer Sitbon (PhD candidate, College of Law & Business, Tel Aviv), Moderator - James Henry (Senior Economic Advisor, Tax Justice Network),Kleptocracy and Human Rights - Steven Cohen (Professor, Georgetown University Law Center), Does Swiss Bank Secrecy Violate International Human Rights? - Brigitte Alepin (Partner, Agora Fiscalité), The Foundation - Steven Dean (Professor, Brooklyn Law School), A Tax Regime to Catalyze Social Enterprise Crowdfunding Lee Sheppard (Journalist, Tax Analysts), John Christensen (Director, Tax Justice Network), discussants	Moot Court (room 100)
10:30 – 10:45	Refreshment Break	Atrium
10:45 – 12:00	7. Reducing Inequality: Tax Avoidance and Progressive Taxation Neil Buchanan (Professor, George Washington University Law School), moderator - Chris Odinet (Associate Professor of Law, Southern University Law Center), Taxing Property Owners - Jean-Pierre Vidal (Associate Professor, Dept of Accountancy, HEC Montreal), Ethics in Taxation: what is it, and why should a tax specialist care? - Niko Lusiani, (Senior Researcher, Center for Economic and Social Rights), A Post-2015 Fiscal Revolution: Human Rights in the Struggle to Finance Sustainable Development James Henry (Senior Economic Advisor, Tax Justice Network), Attiya Waris (Senior Lecturer, Faculty of Law, Univ. of Nairobi), discussants	Moot Court (room 100)
12:15 – 14:00	Lunch, Keynote Speaker Attiya Waris (Senior Lecturer, Faculty of Law, University of Nairobi)	Thomson House
14:00 – 15:30	8. Justice in Labour and Capital Migration Samuel Singer (Associate, Stikeman Elliott), Moderator - Aldo Caliari (Director, Rethinking Bretton Woods Project), Unleashing the Potential of Human Rights Standards to Demand Tax Justice - Lynne Latulippe (Professor, University of Sherbrooke), Tax Competition and Paradigm Shift in International Law - Krishen Mehta (Senior Advisor, Tax Justice Network, New York), Can Developing Countries Attract Investment and Still Get a Fair Deal on Tax Justice? - Henry Ordower (Professor, Saint Louis University), Retreat from Progressive Taxation in the Swedish Welfare State: Does Immigration Matter? John Christensen (Director, Tax Justice Network), Neil Buchanan(Professor, George Washington University Law School), discussants	Moot Court (room 100)
15:30 – 15:45	Refreshment Break	Atrium
15:45 – 17:00	9. Environmental Tax Justice Jessica Magonet (BCL/LLB candidate, McGill Faculty of Law), Moderator - Toby Sanger (Senior Economist, Canadian Union of Public Employees), Tax Justice and Climate Change - Tracey Roberts (Visiting Assistant Professor, Seattle University School of Law), Tax – A Better Mechanism to Protect Rights in the Global Commons - Rodolfo Salassa Boix (Professor, National University of Cordoba),Distribution of Ecological Costs Through Environmental Taxes Stéphane Dion (MP for Saint Laurent-Cartierville), Jim Henry (Professor, Saint Louis University), discussants	Moot Court (room 100)
17:00 – 18:00	10. Roundtable on Tax Justice Campaigns and CSO Actions Imad Sabi (Head of Global Partners Program, Oxfam Novib), Moderator - Dennis Howlett (Executive Director, Canadians for Tax Fairness) - Duncan Wigan (Researcher, Copenhagen Business School) - Victoria Harnett (Campaigns & Communications Advisor, Aid & Development Finance at Oxfam International)	Moot Court (room 100)
18:00 – 18:15	Wrap Up and Closing Remarks, Allison Christians (Stikeman Chair in Tax Law, McGill Faculty of Law)	Moot Court (room 100)
18:15 – 20:00	Closing Cocktail	Atrium

Today at McGill Law: Day Two of Tax Justice and Human Rights Research Collaboration Symposium #TJHR

The conversation among students, academic researchers, and tax justice advocates and activists on the topic of tax justice and human rights continues at McGill today. You can follow the proceedings and make comments on twitter at #TJHR. Program and speaker info here.

Here is the day's lineup:

Time	Topic		Location
08:30 – 09:00	Registration & Arrival Tea/Coffee		Atrium
09:00 – 09:15	Welcome remarks: Allison Christians (Stikeman Chair in Tax Law, McGill Faculty of Law); Dennis Howlett (Executive Director, Canadians for Tax Fairness); John Christensen (Director, Tax Justice Network); and Jean Symes (Program and Policy Analyst, Inter Pares)		Moot Court (room 100)
09:15 – 10:00	1. Setting the Stage William Stephenson (Editor in Chief, McGill Law Journal), Moderator - Kim Brooks (Dean and Weldon Professor of Law at the Schulich School of Law at Dalhouse University), Why Justice Matters for Tax Policy - Ignacio Saiz (Executive Director, Center for Human Rights in Economic Policy), The Evolving Norms and Standards of Human Rights - Allison Christians (Stikeman Chair in Tax, McGill Faculty of Law), Who Has Rights, What Rights, and Against Whom?		Moot Court (room 100)
10:00 – 11:15	2. Human Rights and Tax Justice Reports Aldo Caliari (Director, Rethinking Bretton Woods Project), Moderator - Lloyd Lipsett (President and Rapporteur, International Bar Association Task Force on Illicit Financial Flows, Poverty and Human Rights): IBA Human Rights Institute Task Force on Illicit Financial Flows, Poverty and Human Rights Report - Kate Donald (Adviser to the UN Special Rapporteur on Extreme Poverty and Human Rights), UNHRC Report - Adrienne Margolis (Founder and Editor, Lawyers 4 Better Business), L4BB Report David Quentin (Senior Adviser, Tax Justice Network), and Shirley Pouget(Senior Program Lawyer, Int. Bar Assoc. Human Rights Institute), discussants		Moot Court (room 100)
11:15 – 11:30	Refreshment Break		Atrium
11:30 – 12:45	3. Gender and Fiscal Justice Liz Nelson (Partnership Development and Resources Coordinator, Tax Justice Network), Moderator - Annick Provencher (Professor, Faculty of Law, Université de Montréal),From the Invisible Hand to the Invisible Woman - Rhys Kesselman (Professor, School of Public Policy, Simon Fraser University), Income Splitting and Alternatives for Family Tax Cuts in Canada - Kathleen Lahey (Professor, Queen's University Law School), Sex Equality and Tax Justice: Gender Impact of Tax, Benefit, and Other Fiscal Policies Kate Donald (Adviser to the UN Special Rapporteur on Extreme Poverty and Human Rights), Attiya Waris (Senior Lectrurer, Faculty of Law, Univ. of Nairobi), discussants		Moot Court (room 100)
12:45 – 14:15	Lunch, Keynote Speaker Thomas Pogge (Leitner Professor of Philosophy and International Affairs, Yale University) VIA SKYPE		Thomson House
14:15 – 15:45	4. Fiscal Justice: Regional Challenges and Initiatives May Hen (Master's candidate, Simon Fraser University), Moderator - Savior Mwambwa (Policy and Advocacy Manager, Tax Justice Network - Africa), The Reform of the Global Tax System: Keys Issues and Lessons from Africa - André Mendes Moreira (Associate Professor of Tax Law - Federal University of Minas Gerais), Indirect Taxes and Tax Justice - Misabel Machado Derzi (Professor of Tax Law, the Federal University of Minas Gerais), Guerre fiscale, Bourse Famille et Silence - Renaud Fossard (Latindad), Latin American Countries: Local Issues and International Influences Lyne Latulippe (Professor, University of Sherbrooke), John Christensen (Director, Tax Justice Network), discussants		Moot Court (room 100)
16:45 – 16:00	Refreshment Break		Atrium
16:00 – 17:30	5. Reducing Inequality: International Corporate Tax Reform Jo Marie Griesgraber (Executive Director, New Rules for Global Finance Coalition), Moderator - Erika Siu (Tax Research Consultant, International Centre for Taxation and Development), BEPS Monitoring Group Activities: An Update - Michael Knoll (Theodore K. Warner Professor of Law, University of Pennsylvania Law School), Competitive Neutrality and the EU Model - Lee Sheppard (Journalist, Tax Analysts), OECD Initiative on BEPS - Robert Fox (Executive Director, Oxfam Canada), Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform  Samuel Singer (Associate, Stikeman Elliott), discussant		Moot Court (room 100)
17:30 – 17:45	Announcements		Moot Court (room 100)
17:45 – 18:30	Refreshment Break: Atrium	Breakout Session: IBAHRI Update on Tax and the Millennium Development Goals, Moot Court (room 100)

Today at McGill Law: Tax Justice and Human Rights Research Symposium #TJHR

Today is the first day of the Tax Justice and Human Rights Research Collaboration Symposium, a three-day conversation among students, academic researchers, and tax justice advocates and activists on the topic of tax justice: what is it, how is tax connected to human rights or how could it be, and what research needs to be done to further this emerging field? You can follow the proceedings and make comments on twitter at #TJHR.

Here is the day's lineup:

Day 1: Emerging Scholars Symposium

Wednesday, 18 June

Time	Topic	Location
08:30 – 09:00	Registration & Arrival Tea/Coffee	Atrium
09:00 – 09:30	Welcome Remarks: Daniel Jutras (Dean, McGill Faculty of Law)	Room 316
Panel A	Samuel Singer (Associate, Stikeman Elliott), Moderator	Room 316
09:30 – 10:00	Leyla Ates (PhD candidate, University of Wisconsin and Istanbul Kemerburgaz University), Developing Countries And Globalization of Tax Law Making: Turkısh Tax Law Reforms on Fighting Tax Evasion Steven Dean (Professor, Brooklyn Law School), discussant
10:00 – 10:30	May Hen (Master's candidate, Simon Fraser University), Who runs the Cayman Islands? Field notes on elite tax discourse Lyne Latulippe (Professor, University of Sherbrooke), discussant
10:30 – 10:45	Refreshment Break	Third floor lobby
Panel B	William Stephenson (Editor in Chief, McGill Law Journal), Moderator	Room 316
10:45 – 11:15	Regina Duarte (LLM Candidate, Federal Univ. of Minas Gervais, Brasil),Globalization, Tax Competition and Tax Base Erosion: a Matter of Human Rights Henry Ordower (Professor, Saint Louis Univeristy), discussant
11:15 – 11:45	Martin Hearson (PhD candidate, LSE), Why Do Developing Countries Sign Tax Treaties? Lee Sheppard (Journalist, Tax Analysts), discussant
11:45 – 12:15	Montano Cabezas (LLM Candidate, Georgetown University Law Center),Giving Credit Where it is Due: Rethinking the Corporate Tax Paradigm Kim Brooks (Dean and Weldon Professor of Law at the Schulich School of Law at Dalhouse University), discussant
12:15 – 13:45	Stikeman Chair’s Luncheon featuring a keynote talk by James A. Robb, Stikeman Elliott	Atrium
Panel C	Sas Ansari (Phd Candidate, Osgoode University), Moderator	Room 316
13:45 – 14:15	César Alejandro Ruiz Jiménez (LLM Candidate, Vienna University), Right to Property and Taxation Stephen Cohen (Professor, Georgetown University Law Center), discussant
14:15 – 14:45	Juan Agustin Argibay Molina (LLM Graduate, McGill), Trade Mispricing in Argentina: A Case Study Neil Buchanan (Professor, George Washington University Law School), discussant
15:45 – 15:15	Daisy Ogembo (Assistant Lecturer, Strathmore Law School, Nairobi), VAT Refunds and Tax Justice Andre Moreira (Associate Professor of Tax Law, Federal University of Minas Gerais, Brazil), discussant
15:15 – 15:30	Refreshment Break	Third floor lobby
Panel D	Sarah Blumel (Independent), Moderator	Room 316
15:30 – 17:00	Incubator Session: Designing a Research Project, Methodology & Collaboration, and Publishing Adrienne Margolis (Founder and Editor, Lawyers 4 Better Business);Krishen Mehta (Senior Advisor, Tax Justice Network); Gabriel Monette(Réseau Justice Fiscale); and Shirley Pouget (Senior Program Lawyer, International Bar Association Human Rights Institute)
17:00 – 19:00	Cocktail reception	Atrium
19:00 – 20:30	Roundtable on Tax Justice and Human Rights: Open to the Public Allison Christians (Stikeman Chair in Tax, McGill Faculty of Law), Moderator Featuring Alex Himelfarb (Director, School of Public and International Affairs, York University); Kate Donald (Adviser to the United Nations Special Rapporteur on Extreme Poverty and Human Rights); Attiya Waris (Senior Lecturer, Faculty of Law, University of Nairobi); and Denise Byrnes(Executive Director, Oxfam Québec)

This Week at McGill Law: Tax Justice and Human Rights Symposium #TJHR

This week I am so pleased to welcome to the McGill Faculty of Law an international group of students, academics, researchers, and activists to collaborate on the topic of tax justice: what is it, how is tax connected to human rights or how could it be, and what research needs to be done to further this emerging field. You can find info about the symposium, including the full program and speaker bios, here. I hope that this collaboration will raise interesting questions, inform, educate, and inspire future work on this emerging topic.

I will post each day's program as we get to it this week; we will be on twitter at #TJHR and welcome input from participants whether they are virtual or on the premises.

Netherlands Bank prohibited from discriminating against "US persons"

Here is an interesting development for FATCA: a case in which a small Dutch bank pre-emptively shuttered the accounts of 150 persons in order to avoid having to fulfill US FATCA information sharing requirements. Of course, as we well know, denying accounts to "US persons" does not exempt anyone or any entity from FATCA, but only saves the cost of annual information gathering and reporting. From the story:

BinckBank N.V. (h.o.d.n. Alex), een beleggingsbank, maakt verboden onderscheid op grond van nationaliteit door een man vanwege zijn Amerikaanse nationaliteit uit te sluiten van zijn dienstverlening.

Which very roughly translates to "BinckBank NV (DBA Alex), an investment bank, may not discriminate on grounds of nationality by denying services to a man with American citizenship."

From the case, again, very roughly translated:

A man with Dutch nationality lived most of his life in the Netherlands. He is a U.S. citizen because he was born in America. That makes him liable to tax in America, as a "U.S. person." The man has an investment account with Alex. ... Following an agreement between the Netherlands and the United States to exchange financial data, the Bank terminated the services of the man and all other (150) U.S. persons on 1 December 2013. In the course of 2014, [a law to implement an IGA with the United States was] submitted to parliament. The aim of the law is to ensure that U.S. persons who live outside of America file their tax returns with the IRS. As of July 1, 2014, Dutch financial institutions must provide information on U.S. persons to the IRS. Alex does not want to comply with the obligation to provide all transaction data by U.S. persons, because to do this, the bank must make significant adaptations to its administrative systems. Given its small number of U.S. person clients, this adaptation would impose disproportionate costs, with additional disclosure services producing a loss-making operation. According to the bank, the discrimination is not banned because it is based on a generally binding regulation. The bank also argues that the discrimination be allowed to continue, because the financial consequences are unacceptable. 

Verdict

The Board for the Protection of Human Rights ruled against BinckBank, finding that terminating service to the man constituted unlawful discrimination on grounds of nationality.

Reasoning

The bank states that U.S. persons can no longer hold accounts. The bank therefore denies its services to people with U.S. citizenship. This is direct discrimination on grounds of nationality. Direct discrimination is prohibited, unless the law makes an exception, such as in a generally binding regulation that compels a distinction. The Board considers that the bank does not oblige the agreement and the law envisaged does not allow for exclusion of individuals with U.S. citizenship. The bank has merely chosen for commercial reasons to deny service to Americans. The Board therefore dismisses the bank's statutory exception. The Board also considers that there is no reason to make the ban on the use of direct discrimination on grounds of nationality. This decision was made on the grounds of reasonableness and fairness.

My informal translator had a little trouble with the last paragraph; suggestions welcome.

From this we can see that small institutions are between a rock and a hard place, at least in the Netherlands and likely many other places as well, but only to the extent that foreign governments employ their human rights regimes to step in and protect Americans from the skewed incentives created by American law. I note that the Netherlands, along with most other IGA partner countries (but not Canada) has included an express provision forbidding discrimination, but this applies only to institutions that are not required to register because they are exempt:

Annex II: Non-Reporting Netherlands Financial Institutions And Products
II. Deemed-Compliant Financial Institutions.
A. Deemed-Compliant Financial Institutions
1. Financial Institutions with a Local Client Base
j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified U.S. Persons and who are residents of the Netherlands.

I had assumed this meant that it would be ok for FIs that are required to comply with FATCA to turn away US customers, as appears to be a growing practice. Not so, if foreign governments can be relied upon to force their own institutions to bear the costs of lending assistance to the United States in perfecting its extraterritorial tax claims, under the mantle of protecting US persons' rights against discrimination in these foreign territories. 

I note that in this case the discrimination claim was mounted by the accountholder to preserve his right to banking services. I await the inevitable barrage of cases that surely must arise as individuals assert other discrimination-based claims in connection with the highly problematic U.S. tax regime.

As a not insignificant aside, it is worrying to me that here we have a foreign court explaining that the purpose of FATCA is "to ensure that U.S. persons who live outside of America file their tax returns with the IRS." I have seen absolutely no evidence that this is the case; I have seen absolutely nothing in any iteration of FATCA to suggest that the idea behind this legislation was to perfect US taxation on those living abroad with US status as citizens or otherwise. Rather, the aim of FATCA was to stop Swiss bankers selling tax evasion to Americans living in America. 

This may seem like an insignificant point but I believe it is important because one day we will look back and reflect upon what will surely turn out to have been a spectacular mistake: that FATCA induced governments around the world into a headlong rush into global automatic information exchange on the strength of an unexamined idea about which taxpayers belong to which countries. One day we are going to have that discussion, and it will need to be remembered that when the world jumped on the FATCA bandwagon, no official in any government apparently considered whether it was right, or good, or just, for the US to impose its income taxation on the basis of legal status. I think when that discussion finally takes place, that omission will be seen as fatal.

Call for Papers: Tax Justice & Human Rights Symposium, McGill, June 2014

We invite paper proposals for a Tax Justice and Human Rights Research Collaboration Symposium, to be held at the McGill Faculty of Law, Montreal, Quebec, from Wednesday to Friday, 18-20 June 2014.

The symposium will explore the fundamental connections between taxation and human rights by providing a forum for collaboration among students/emerging scholars, academics, civil society organization representatives, tax justice advocacy groups, tax policy makers, and researchers from around the world. The symposium seeks especially to bring developing-world perspectives into the discourse and to foster scholarly work for dissemination both within and beyond the academic setting.

The plurality of experience, in terms of training, background, country of origin, and area of expertise, will ensure that discussions and activities at the conference will have real-world impact. Indeed, there is a need within the tax-policy world for more cross-pollination between academic researchers and on-the-ground decision-makers. The connections and networking that we envision will take place at this conference should allow for meaningful discussions for years to come.

Paper proposals must be between 300-500 words in length and should be accompanied by a short résumé.

Please submit your proposal to the conference convener Professor Allison Christians, at [allison dot christians at mcgill dot ca].

Deadline for submissions: 30 April 2014. Successful applicants will be notified in early May 2014.

An initial 3-5 page sketch of the paper must be submitted by the end of May for circulation among panelists and feedback from the conference committee, but completed papers are not required; rather, we seek a readiness to collaborate and develop new heuristics for thinking about taxation and human rights. 

Conference fees for presenters will be covered by the conference organizers; travel and accommodation bursaries may be available to scholars and tax justice advocates from the Global South in connection with support from the Tax Justice Network, Canadians for Tax Fairness, Halifax Initiative, and other partners.

Please visit the Symposium's page on the Stikeman Chair in Tax Law website for more information. 

Tomorrow at McGill Law: Panel on Distributive and Labour Justice

Catherine Lu of McGill and Pablo Gilabert of Concordia will be presenting on the topic of global principles of distributive and labour justice tomorrow at 12:30 pm as part of McGill Law's Speaker Series on Economic Justice, sponsored by the Centre for Human Rights and Legal Pluralism. I will be moderating the discussion. This event is free and open to all, details:

Date: 14 March 2014
Time: 12:30-14:30
Location: Room 609 New Chancellor Day Hall
3644 rue Peel
Montreal Quebec Canada , H3A 1W9

I have started reading Catherine Lu's 2006 book, Just and Unjust Interventions in International Law: Public and Private. In it, she argues that the concept of state-to state intervention as a moral problem rests on an image of sovereignty as privacy, and therefore uses the same imagery of intrusion that we see in the domestic privacy context as a basic element. The domestic case against government intrusion into private affairs of individuals and social groups (family) involves balancing between curbing domestic abuse and government intruding too deeply into family lives.  Lu argues that the same principles animate the question of legitimacy in intervention, making similar normative claims to privacy accorded to families in the domestic realm. Lu thus argues that:

The concept of intervention .. assumes some distinction between private and public domains. In the Westphalian model of interstate relations, the posited sovereignty of states functions like privacy to give states a right to be free from interference by outside parties --especially other states, as well as non citizens, nongovernmental organizations, and even the international community -- in their own internal affairs."

The public/private argument is an interesting and I think controversial position that adds to a discourse about sovereignty that we see being challenged all the time in taxation, including (especially of late) in taxation. Consider the OECD's project on BEPS, the US imposition of FATCA on the rest of the world, the rise of global tax justice activism, the addition of taxation to the corporate social responsibility discourse, and the UN tax group's attempt to change the conversation on transfer pricing. There are many other examples in recent and not so recent history.

It will be interesting to discuss the pressures involved in the area of labour. I have viewed it as essentially necessary for states to trap labour in order to extract enough revenues to pay for the state (in the form of taxation or otherwise). It is clear that governments have come to rely on labour as their primary resource of such revenues over the past century, so cannot let labour move as capital does, footloose and free of obligation.

Economist: It would be terrible if people stopped depending on their employers for their health care.

Casey Mulligan says if the law actually applies to Congress, look for it to be far too bountiful, in a Speenhamland kind of way (see also Polanyi). The state, it seems, must do all it can to avoid producing healthy shirkers amongst the general populace, even if that requires dispensing a certain amount of injustice. A sad commentary on both human flourishing and the rule of law, is it not?  Excerpts:

To promote economic efficiency and the goal of universal health coverage, perhaps members of Congress should not be required to enroll in the new insurance exchanges.

...Because members of Congress are accustomed to high-quality medical care provided to them through federal employee benefit programs, one might expect that they would push for top quality care to be delivered through the exchanges too.

...If the exchange plans were good enough, people who are rushing to find a job, and people considering leaving their job, would no longer have to see employment as their only means of obtaining top quality, subsidized coverage. As a result, some of those would work less (see the Congressional Budget Office on some of health reform’s work incentives, and a 1994 explanation from Alan Krueger and Uwe E. Reinhardt). 

...Although politically incorrect and perhaps unfair, allowing members of Congress to keep their federal employee coverage might be the best thing for universal coverage and reducing the impact of the Affordable Care Act on the federal budget. 

Add to summer reading list: Multinationals and Human Rights

John Ruggie has published Just Business: Multinational Corporations and Human Rights.  Abstract:

One of the most vexing human rights issues of our time has been how to protect the rights of individuals and communities worldwide in an age of globalization and multinational business. Indeed, from Indonesian sweatshops to oil-based violence in Nigeria, the challenges of regulating harmful corporate practices in some of the world's most difficult regions long seemed insurmountable. Human rights groups and businesses were locked in a stalemate, unable to find common ground. In 2005, the United Nations appointed John Gerard Ruggie to the modest task of clarifying the main issues. Six years later, he had accomplished much more than that. Ruggie had developed his now-famous "Guiding Principles on Business and Human Rights," which provided a road map for ensuring responsible global corporate practices. The principles were unanimously endorsed by the UN and embraced and implemented by other international bodies, businesses, governments, workers' organizations, and human rights groups, keying a revolution in corporate social responsibility. 

Just Business tells the powerful story of how these landmark "Ruggie Rules" came to exist. Ruggie demonstrates how, to solve a seemingly unsolvable problem, he had to abandon many widespread and long-held understandings about the relationships between businesses, governments, rights, and law, and develop fresh ways of viewing the issues. He also takes us through the journey of assembling the right type of team, of witnessing the severity of the problem firsthand, and of pressing through the many obstacles such a daunting endeavor faced.

Excellent timing, with all the world watching whether and how governments are going to increase transparency with respect to MNCs and their local and global dealings.