[throwaway676890]

>Their American status can make them untouchable by many banks. Many foreign banks do not want American account holders.

This is an understatement.

Some years ago, I was a citizen of Pakistan and had a green card in the US. I never had any accounts in Pakistan. My father in Pakistan had passed away, and I traveled there to visit family. All of my share of the inheritance money was sitting in my brother's account in Pakistan. So we went together to a bank to open an account in my name and transfer my share of the inheritance over.

Now in Pakistan people have an ID card similar to the Social Security Card. They provide a different one for overseas Pakistanis. So when they asked for my ID card, I gave them my overseas ID card. Things were going smoothly until the person got to the address field.

"Oh, I see you live in the US?"

"Yes."

"Sorry, we cannot open a bank account for you."

I talked a bit more, and explained to them that I'm a Pakistani citizen, and not a US one. Nope. The laws were clear. No bank accounts for US based persons without special approval from some senior officials.

I asked would this apply even if I didn't have a green card and was merely a student in the US?

Yup.

The reason they gave me? US tax laws.

[miscreanity]

The cost and risk banks take to ensure that US citizens comply with US law is absurdly draconian. It is massively safer for a bank to simply deny participation than to risk fines and expulsion from the global financial system that would effectively cripple it. Banks and other businesses globally are forced to become extensions of the US government without receiving funding to do so.

This is economic warfare. The United States is a great place and the people are amazing (as people have been everywhere I've travelled), but the institutions have essentially enslaved the population and strong-armed the rest of the world.

Thankfully, it ends soon with internal reform or collapse under its own paranoia and resource-intensive policing. I'm expecting this within a decade and am hopeful that it is the former.

[throwaway676890]

Do you have any details about this? My impression was that the Pakistani government felt that requiring US based people to report details of foreign accounts was a way to gather intelligence about other countries, and they didn't want to give them a way to do it. I did not think it was that Pakistani banks themselves had any reporting requirements to the US.

[eesmith]

https://www.theguardian.com/money/2014/sep/24/americans-chas...

> The Foreign Accounts Taxation Compliance Act required all foreign banks to disclose the financial information of any American with assets over $50,000 sitting in banks outside of the US.

> Steep penalties add muscle to the law. If a foreign bank – not just in Canada, but anywhere – fails to report even a single US citizen as a customer to the IRS, the US Treasury department would withhold 30% of the banks’ US income as penalty.

[gamblor956]

I actually work in this field, and I interact with banks regularly.

The FATCA requirements are actually quite simple, and the theoretical penalties are just that--theoretical.

As a practical matter, the FATCA US customer report is satisfied by a relative spartan list of names, tax ids, account numbers, and balances. In other words, something a simple report should be able to generate in about .000001 seconds.

If a bank can't handle that type of compliance, you should take your money elsewhere because it indicates serious internal control issues.

[eesmith]

Your answer seems to be that "yes, banks and other businesses globally are forced to become extensions of the US government without receiving funding to do so" (quoting miscreanity) and "Pakistani banks themselves [have] reporting requirements to the US" (quoting throwaway676980) ... so long as they have an account in the US (my link). I believe that includes Swift accounts?

I don't think they are really asking about the ease by which a bank should be able to generate that report, but rather the necessity to do so.

[throwaway676890]

The article is informative. It seems the requirements are only for banks that have a presence in the US. I'm not sure if the bank I went to has a presence in the US. But I can see the Pakistani government simply giving a blanket "No".

[eesmith]

Many banks have SWIFT accounts (see https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban... ). This has been used by the US for purposes that other countries disagree with. As a result, and quoting from that URL:

> In September 2018 the European Union foreign policy head, Federica Mogherini, proposed the development of a new "special purpose financial vehicle" intended to bypass the U.S. controlled Society for Worldwide Interbank Financial Telecommunication payments system - commonly known as SWIFT. The seven founding members of this new system are to be Iran, the European Commission, Germany, France, the U.K., Russia and China - but not the United States.

Web sites like http://non-fatca-banks.com/pk.html list which banks are members of SWIFT, because that means they are exposed to penalties should they fail to follow FACTA reporting laws. For example, the National Bank of Pakistan followed FACTA, see https://www.nbp.com.pk/fatca/index.aspx .