Interesting article on Bloomberg.com tonight.

Now you know why opening a new bank account or, horror of horrors, trying to apply for an investment/brokerage account, is such a nightmare if you are U.S. Person (defined as a U.S. citizen or a Green Card holder) living outside the U.S.

It also explains why many U.S. financial institutions are closing the accounts of U.S. Persons with a non-U.S. address.

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https://www.bloomberg.com/…/why-thousands-of-u-s-expats…

‘The U.S. is almost unique in the world in taxing based on citizenship rather than residency. It’s also uniquely parochial in being unable or unwilling to distinguish between, say, a rich American living stateside and stashing money offshore and, for example, a middle-class American married to a German and teaching elementary school in Berlin. The hell starts with that conflation.

Before 2010 America’s citizen-based taxation didn’t necessarily disrupt the lives of expats like this schoolteacher. That’s because few expats even knew about the horrendously complex reporting rules or bothered with them. But FATCA required them to make new and redundant disclosures or face the prospect of tens of thousands of dollars in fines or even prison. It also required their foreign banks, brokers and insurers to report on them to the IRS, or face draconian sanctions.

Unsurprisingly, many foreign banks and brokers therefore stopped taking “U.S. persons” or green-card holders as customers. So American expats have increasingly been locked out of retail finance in their host countries.

Worse, the European Union then started passing laws with bureaucratically sublime names such as MiFID II and PRIIPs that imposed new rules on everything from mutual funds to life insurance. This scared the U.S. banks and brokers of American expats living in Europe, so they also started kicking out their customers with foreign addresses. Many Americans overseas are financially marooned.’