Sun, 10 Dec 2023

BRUSSELS, Belgium (CN) - The Belgian government faced off against one of its own agencies on Wednesday, defending an arrangement to send tax information to the United States that the country's privacy watchdog calls unlawful.

The government is appealing a decision from the Belgian Data Protection Authority that prohibited transferring the financial information of Americans residing in Belgium to the U.S. Internal Revenue Service, finding doing so violated EU data privacy law. 

"There is no differentiation of the data shared, which the [European Court of Justice] has explicitly forbidden," said lawyer Vincent Wellens, who represents the France-based Association of Accidental Americans, which filed a 2020 complaint with the data authority.

The fight is the latest attempt by so-called accidental Americans - people who have U.S. citizenship but little connection to the country otherwise - to remove Washington's influence on their lives. 

In May, the data protection authority took issue with the bulk transfer of financial information from the Belgian tax office to the U.S. under the Foreign Account Tax Compliance Act. 

Looking to crack down on Americans hiding assets abroad, Congress passed legislation requiring international financial institutions to report information on the holdings of U.S. citizens to the IRS. To ensure compliance, Washington has signed a series of bilateral agreements with more than 100 other countries to share Americans' foreign tax information directly with the IRS. 

The Belgian privacy watchdog concluded the country's agreement violated the EU's General Data Protection Regulation. Belgium argues the bilateral agreement is above board and predates the EU directive. 

While the sweeping privacy regulation allowed some preexisting agreements that fell short of the new standards to remain, the organization violations couldn't continue indefinitely. "Article 96 cannot be intended to allow that international agreements remain contrary to the GDPR over time," Hielke Hijmans of the data authority said at the time, referring to the part of the regulation that grandfathered in earlier deals. 

The group representing accidental Americans lost another legal attempt to rid them of Belgium's requirements last year but are planning to bring another case in France later this year. "We are moving things forward," Fabien Lehagre, who heads the action group and is himself an accidental American, told Courthouse News. 

Meanwhile, the financial fates of those like Thomas Lambert hang in the balance. 

Lambert, a Belgian national, found out he was technically American when he was denied a bank account in Hungary after moving there several years ago. He was born in Texas where his father, a Belgian Air Force officer, was briefly stationed as part of a NATO exchange. The 49-year-old left the U.S. as a child and has never returned. 

Since he last spoke to Courthouse news in 2020 as part of a story about accidental Americans, Lambert has begun the process of renouncing his U.S. citizenship. In 2010, the U.S. hiked the cost to apply for denaturalization from $450 to $2,350 - a fee Lambert says he couldn't afford.

Last month, however, the State Department announced it would reduce the fee back to $450, giving Lambert hope he could finally resolve his citizenship troubles. 

 "I'll believe it when I see it," he said.

Source: Courthouse News Service

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