Does FATCA violate the TT Constitution?

During a visit to TT, then Prime Minister of Barbados Owen Arthur succinctly and poignantly stated this was a “dangerous doctrine that has no place in the Caribbean …Sovereignty is not divisible. For us it was won after a long struggle by those who believe that ‘massa day done’… “There are those who have argued that sovereignty does not matter, that we are incapable of providing for our own defences against the advances of the drug barons, and that we should surrender our defences on this sphere to the tender mercies of those more capable than ourselves to provide our defence … “This was the very doctrine — the Brezhnev Doctrine — that led to the subjugation of Eastern Europe to domination on the grounds that they could not provide for their own defence.” This was the challenge of the Caribbean and while we eventually signed the Shiprider Agreement we did so after stating the principles of our opposition to it. Having said this, the Shiprider Agreement has made a significant impact in the fight against drugs in the region. Suggesting to some that national sovereignty cannot be absolutely defined or delineated in the New World Order and among the family of nations.

With the exception of the contribution of Prof Hamid Ghany, this lofty philosophical debate however escapes us in the present context of the President Barack Obama-inspired Foreign Account Tax Compliance Act (FATCA).

All we are being fed is that if TT does not implement this law it will have dire economic repercussions for all concerned. The politics of economics is mobilised in an attempt to impose this latest US-driven law in the Caribbean and indeed the world. Absent from this debate is a higher discussion.

The US believes there is a significant amount of its citizens all over the world who are earning income and simply hiding it from their Internal Revenue Services (IRS), and as a result has to force foreign nations to become de facto agents of its IRS for free. There does not appear to be any reciprocal arrangement in place for countries to find out if their nationals are hiding income in the US.

In a few countries such as Canada, China, Russia and Israel where the FATCA law has been challenged in the courts, the issue of national sovereignty has been raised and discussed. FATCA, essentially a tax enforcement law, is an unprecedented extraterritorial expansion into another country by the US. Article 2 of the United Nations Charter, “the principle of sovereign equality,” is fundamental to mutual respect between States and in essence FATCA would remove that.

FATCA appears to violate the unwritten principle of our Constitution that we will not forfeit our sovereignty to a foreign government.

We are TT citizens, the US has no rights over our nationals and we expect our Government to vigorously protect our rights.

We are however unfortunately a small nation unable to withstand the economic sanctions of the US, so we comply. We are not alone as the mightiest of nations have also complied fearing economic sanctions.

The world has submitted to US law because the world is vulnerable to the US economy. This time we don’t have the eloquence of Owen Arthur.