Many US citizens living in the UK and EU are being denied banking facilities

Many US Citizens living in the UK and EU are being denied banking facilities thanks to US legislation which causes banks to consider US citizens customers as an unacceptable risk, irrespective of their financial probity.

Consultant John Havard said: For some years, many US citizens living in the UK and EU have suffered the same fate as that recently chronicled by Nigel Farage – that is, the summary withdrawal of existing banking facilities.

A piece of US legislation called (FATCA),Foreign Account Tax Compliance Act causes many British and European banks to consider US citizens customers as an unacceptable risk, irrespective of their financial probity. FATCA requires non-US banks to report information to the US on accounts held by US citizens. This applies even if a US citizen lives outside the US and has, at best, only limited financial links to the US. Failure to comply with this requirement can result in the non-US bank being barred from doing any business in the US.

Moreover, many people affected by this draconian penalty can be so-called ‘Accidental Americans’ – that is, someone who acquired US citizenship at birth, because their non-US parents happened to be temporarily living in the US at that time (e.g., Boris Johnson, prior to his reported renunciation of US citizenship).“Consequently, some banks in the UK and Europe have opted for the ‘simple life’ of not offering banking facilities to any US citizens.

In the Netherlands, one affected individual took the local bank to court in 2022 for the withdrawal of his banking facility. The Dutch court ruled that forcible closure of the account was in breach of local law. No similar cases have been reported in other countries.

It now appears that UK and EU banks complying with FATCA and providing the US authorities with information about their US citizen customers may be in breach of local GDPR (data protection) requirements. In this regard:

• A Belgian Court has recently held this to be the case under GPDR as incorporated in Belgian Law.
• A similar case is listed in the French Courts.
• In the UK, a US citizen is apparently attempting to ‘crowd fund’ a similar action.

These GDPR developments threaten banks that still have US citizen customers in a Catch-22 situation: breach FATCA by not reporting or breach GDPR by reporting.

Unless there is a relaxation of the US penalties regime, UK and EU banks that still have US citizen customers may come to view this GPDR associated-risk as a decisive factor in withdrawing banking facilities from all US citizens.

Would you like to know more?

If you would like to discuss the above, please get in touch with your usual Blick Rothenberg contact or with John Havard via his profile.