I posted the following comment at Opinio Juris.There is something strange at work here. The IGAs which you indicate are vulnerable to a Constitutional challenge under the Treaty Clause are not part of FATCA. They were developed by the Treasury as the most efficient method to implement the statute.Accordingly, even if the Constitutional challenge were successful under the Treaty Clause, it would presumably only strike down the IGAs, but this would leave the validity of FATCA unaffected.Under this scenario, the first “victims” of the challenge would be the foreign financial institutions finding that they have to directly register with and make full disclosures to the IRS instead of to their national revenue agencies, and could not rely on an agreed framework under their respective national laws to achieve compliance with the statute. It could very well be that without IGAs the Treasury and the IRS determine that they are incapable of implementing the law with their limited (and stretched) resources, but this is a different matter altogether.
Published May 10, 2014 by Ted Baumann
I agree with you Ted. If the iGAs are a no-go, then FATCA as written stands. Treasury could decide to forge ahead even after acknowledging the impossible position in which they have placed foreign financial institutions under the laws of their own countries. Or Treasury could decide that the information they seek is important enough to warrant complying with the rule of law through the established treaty making process. As things stand now all I see are procedural irregularities all around, and not just in the US. The precariousness of that position on a global basis seems increasingly evident.
Published May 12, 2014 by Allison Christians