Belgian Accidental Americans claim FATCA infringes EU Privacy Law

A group of “accidental Americans” are questioning the compatibility of data transfers to the United States under the Foreign Account Tax Compliance Act (FATCA) before the Conseil d’Etat, Belgium’s highest administrative court to question the compatibility with EU data privacy rules.

“Accidental Americans” are individuals who have negligible ties with the U.S., in particular nationals residing outside the U.S who are U.S. citizens because they were born on U.S. soil or were born abroad to American parents. Because they have U.S. citizenship, they are subject to the reporting requirements of FATCA. That means that Belgian banks must collect information and transmit it to the IRS via the Belgian tax authorities. Banks that fail to send the information risk fines.

The group asked the Finance Ministry to stop the transfer of financial data to the US under FATCA; the Ministry refused. They ask the Council of State to refer a question to the Court of Justice of the European Union.

The Association of Accidental Americans claims that the massive, automatic transfers of data by financial institutions mandated by FATCA are incompatible with the General Data Protection Regulation, which guarantees rights of protection of personal data and the respect of the right to privacy.

The Association filed a similar action in 2019 with the French Conseil d’Etat contesting a decree that implemented the FATCA intergovernmental agreement between France and the United States. The claim was based on alleged violations of the EU’s data protection laws and infringement of the French Constitution for lack of reciprocity. The French Conseil d’Etat rejected the appeal in July 2019, saying that the bilateral agreements between France and the United States were applicable and not defective.

In recent years, the AAA has also filed complaints with data protection authorities in Belgium and the Netherlands, the administrative court in Luxembourg, and the European Commission.