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“I know what lies ahead.”

The following is from an entrepreneur friend I’ve blogged about before. What he’s going through is a direct result of FATCA. You and me? We might not think we’re rich enough to be affected by this horrible, impossible law. If we have few or no offshore assets, we might think we have nothing to worry about.

But in the long run, we’re all hurt as American citizens become worldwide pariahs, as avenues of freedom are closed off, and as stupid government tricks push our commerce and technology into fear-created backwaters.

Anyhow, from my friend:

I’ve already whined to you about having to close my Swiss bank account. That process has been started. It will end up costing me about $10,000 in travel and fees. I’m moving the money from accounts denominated in Swiss Francs to a firm that will warehouse gold bullion for me – for a fee. I kept gold in my Swiss safe deposit box for annual fee of $150 – and no one, no one at all, know what was inside. Now I will pay a fee to buy bullion, plus about 1.5% of the value of the gold to the new firm every year, and they will know exactly what I have at all times.

It’s better than nothing, but it’s a major loss of money, privacy, and control.

I also had Swiss Travel Cash cards. These were very cool. You pay a small fee to load a card from your Swiss account. You can have cards for dollars, Euros, or Swiss Francs. You can have them for meatspace credit cards, or internet purchases, or as an iPhone app. I had dollar and Euro credit cards. Each card can hold up to 10,000 units of currency. There are no additional fees. The cards have no names on them, just a European mastercard number. You can use them anywhere mastercard is accepted, with a 4-digit pin. See here.

When a close friend was going through a nasty divorce, her wealthy in-laws paid a pack of lawyers to freeze all her assets, the better to steal the house and get custody of the kids, I handed her my dollar card and whispered the pin in her ear. She was able to hire her own lawyers and sort things out. I was repaid in full. The kids are with her. There were no records of the spending, no way for the other sharks to get at this money.

Now its gone. I got a polite but firm email stating that I have to close out all Swiss Travel Cash cards by June 1. Like closing the Swiss bank accounts, this applies to all US citizens.

I realize there won’t be much sympathy for a rich one-percenter. Actually I’m just breaking into the 10% class, the ones who make 43% of US AGI and paid 70.5% of total income taxes. But once the idea of class war is accepted, the lines get blurry. It really doesn’t matter if I’m in the 1%, 5%, 10%, or even 20%.

What matters is that I’ve been cut out of the herd, and forced into a series of ever tighter chutes, and I know what lies ahead.

I read libertopia dreamers who write about anonymous digital cash. It’s not a dream, it is cold plastic reality, but it is being denied to Americans while the rest of the world moves ahead.


  1. Alex
    Alex March 14, 2012 8:10 am

    Time to get a secondary citizenship from one of the european (or east-european, or non-european) countries (thinking of Iceland, Ireland, Switzerland, Spain, all Latin America, some Cayman Islands).

    Then she can choose which papers to use when opening bank accounts. With money, getting second citizenship is not a problem.

  2. Claire
    Claire March 14, 2012 9:03 am

    Alex — “With money, getting second citizenship is not a problem.”

    Very true.

    Getting money is the problem. But I totally agree. If I had the stuff, I’d do what you suggest. Still, it can be difficult even for someone as relatively well-off as my friend, and I could easily see reasons not to do it.

  3. Gus S. Calabrese
    Gus S. Calabrese March 14, 2012 11:46 am

    Tell your friend I feel very sorry for them

  4. JFP
    JFP March 14, 2012 1:47 pm

    I’ve seen visa/mastercards you can buy in walmart that act like gift cards or debit card versions. I don’t know if you have to give ID info when buying them though.

  5. Claire
    Claire March 14, 2012 1:55 pm

    JFP — I know those cards. Not bad for some purposes — but not in the same league as a card that enables you to anonymously and tracelessly tap into your Swiss bank account. Sigh.

  6. Eric Oppen
    Eric Oppen March 14, 2012 11:37 pm

    If someone is of Irish descent (any parent or grandparent born there) they’re entitled to claim an Irish passport. Those things are real useful for lots of things, not just dealing with foreigners who’re sick of US interference. Try contacting the Irish embassy or consulate and ask them what level of documentation is required.

    Some other European countries do this, too. ISTR that the child of an Italian citizen has a right to Italian citizenship, no matter where born, and Germany took in lots of ethnic Germans after WWII—that might still be an open deal, although I don’t know and the Germans are a bit twitchy about too many foreigners coming in.

    In Asia, I _think_ that both Taiwan (Republic of China) and the “People’s” “Republic” of “China” will often give citizenship and passports to people of Chinese descent. I’d be very leery of the PRC, but Taiwan might not be a bad option.

  7. EN
    EN March 14, 2012 11:44 pm

    I’d be leery of Germany. They are politically correct to a fault… but I’ll leave my personal opinions about how Germans view freedom at the door. one thing that might not be so bad is going to Greece. There are many unsavory things that are happening their right now but we’re talking about a culture in which over half the people are now surviving on the black market. I’m seriously thinking of this. And it is beautiful.

  8. MJR
    MJR March 15, 2012 8:42 am

    After reading that I would strongly say three words… Time to leave. Find another home and don’t look back as hard as that sounds. For some other ideas you might like to look at

  9. Laird
    Laird March 15, 2012 10:11 am

    The problem with “leaving” is that it’s not so simple. The US is one of the few countries which asserts a right to tax its citizens anywhere in the world, even if you haven’t lived here for years. Renouncing your citizenship is very difficult, expensive, and takes several years at best. This is, of course, intentional: they don’t want you getting away. In the government’s eyes we’re all tax cows to be milked, not citizens to be respected.

    Claire, I’d be interested in learning your reasons not to have a second citizenship if one is able to get it, because frankly I can’t think of any good ones.

  10. Ellendra
    Ellendra March 15, 2012 12:26 pm

    JFP: I tried one of those cards recently. You don’t have to give your info to buy it, but you do in order to activate it. Even creepier, when I went to activate mine, they started asking for my BROTHER’S personal info!!!!!!!!

    Needless to say, my browser “suddenly crashed” preventing me from answering any of those questions.

  11. Jorge
    Jorge March 15, 2012 5:25 pm

    You do not have to be rich to be affected. Just be a US citizen and live outside the US. Banks where I live are taking one of two approaches. Approach 1) If you are a US citizen, close your account. Approach 2) require you to sign a form “voluntarily” allowing them to report your information to the US IRS. Does not matter how much money you have. Most US citizens living here are retirees living off Social Security. Not exactly the top 1%.

  12. Claire
    Claire March 16, 2012 2:49 pm

    Laird, you wrote: “Claire, I’d be interested in learning your reasons not to have a second citizenship if one is able to get it, because frankly I can’t think of any good ones.”

    Um … good question.

    I have to say that if I could afford a second citizenship in a country that might offer some protective benefits, I surely would. But off the top of my head, a few reasons why NOT to:

    * In my friend’s case, he couldn’t get a second citizenship quick enough to save him from the troubles he’s already in.

    * The reach of the U.S. government is so long that having citizenship in a second country might not help you if the fedgov is really after you.

    * The countries that sell citizenship are all smaller and weaker than the U.S. and could be forced by the fedgov to bend under pressure. They might sell out their “citizenships” as easily as countries are selling out their bank customers.

    * As the U.S. slides farther into hysteria, having a second citizenship could make you look like a “suspicious person.”

    * In most cases (Dominican Republic excepted), getting a second citizenship is a very expensive process. Somebody who’s just in the top 10% of income-earners like my friend might wonder if alternative citizenship is worth what he’d have to pay for it. (Though I should also note that, as an entrepreneur, he might be able to get citizenship by building a business in another country.)

    There’s probably more. That’s all that comes to mind right now.

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