It's Official - America Now Enforces Capital Controls

[Jingthing]

Does anyone understand the dollar limits on this law, assuming they do figure out how to enforce it?

For example, if you SWIFT 9,000 nothing happens, or does it?

If you SWIFT 20,000 but your bank account is under 50K, then what?

Is there any relation to the 50K USD thing and the withholding of the SWIFT transfers?

If this is going to happen with all SWIFTs regardless, I am still wondering if we should be contacting our Thai banks and giving them our SS numbers. I don't want to be shocked with a withholding. I can't imagine the Thai banks are going to want to deal with this though.

Edited March 29, 2010 by Jingthing

[Naam]

Forgot to warn everyone. Nearly all USD transaction go through intermediary banks located within the US, so even if you send a USD transfer from outside the US, you'll still likely get nicked by this law.

that is correct if you delete "nearly" because ALL USD transfers go via the United States (NY) even transfers from one bank to the other which are located in the same building (e.g. Singapore).

sidenote: all EUR transfers go via Frankfurt, Germany.

[flying]

Does anyone understand the dollar limits on this law, assuming they do figure out how to enforce it?

Your reading comprehension

Read it again....Greg posted the facts & they are there to see.

http://www.thaivisa.com/forum/It-s-Officia...55#entry3456155

I am still wondering if we should be contacting our Thai banks and giving them our SS numbers.

Go for it........... with folks like you the govt need not worry that it will have much trouble to direct the herd.

Edited March 29, 2010 by flying

[JimGant]

Come on, get a grip. This is all about adding "muscle" to get back-taxes from tax cheats. If you don't have over $50k in Thai accounts, you're not even on the radar, let alone a "person of interest."

And to become the latter, you'll have to be not only over that $50k threshold, but also be real non-cooperative when asked for personal information. At that point, if I were your Thai bank cooperating with the IRS, I'd shut you down -- long before any question of 30% withholding becomes a possibility.

And will it be too costly for Thai banks to cooperate with the IRS? Not if the threshold is $50k, which will weed out most of us bums from consideration. And then, since it won't be too costly, I think Thai banks will want to stay in the US's good graces, and thus go along with all of this.

Obviously the IRS is taking a chapter from Thailand -- and trying to identify the "unusually rich" folks. If your 1040 (or lack thereof) shows you as a low earner -- but your Thai bank reports a fat bank account, that should raise a flag. And, of course, the first thing the IRS will look for is whether you've paid taxes on the now-reported earnings from your fat bank account. Next, they'll see if you've filed your TD F90-22-1, reporting that you had over $10k in Thailand (nice, stiff income source for Uncle Sugar with the fines for not filing this form). And, finally, when this is implemented ((12/31/2012), you'll have to report foreign accounts over $50k on your Form 1040 (but you'll still have to file the TD F90, as this is for a separate branch of the Treasury from the IRS). Go figure.......

So, unless you're a tax cheat -- and a pretty blatant one at that -- don't worry about any 30% withholding. (Which just happens to be the only IRS flat tax, normally used for withholding on FDAP income of nonresident aliens.) No, Uncle is after much bigger fish than us. And when he finds some obvious slimy fellas, that 30% withholding tool is actually kind of slick.

But if you haven't filed your TD F90 yet (or ever), looks like a good time to see the light. Otherwise, relax (and SWIFT as much as you like -- only the newly identified tax cheats will have SWIFT transfers affected).

[tutsiwarrior]

Forgot to warn everyone. Nearly all USD transaction go through intermediary banks located within the US, so even if you send a USD transfer from outside the US, you'll still likely get nicked by this law.

that is correct if you delete "nearly" because ALL USD transfers go via the United States (NY) even transfers from one bank to the other which are located in the same building (e.g. Singapore).

sidenote: all EUR transfers go via Frankfurt, Germany.

so...if my european employer transfers my salary in USD to my UK USD account it will pass through a US bank?

and...any transfer that I make from my euro account in the UK to Thailand shall pass thru Frankfurt?...similarly for USD from the UK account to Thailand must pass thru the US?

I know that banks use intermediaries to transfer funds as when in saudi euros that are transferred to Thailand pass thru a bank in Germany but I thought that this for the transferring bank's convenience and not required by any currency transfer law...

oh, naam...why do you wanna make my life complicated?...I thought you was my fren'...

[Naam]

Forgot to warn everyone. Nearly all USD transaction go through intermediary banks located within the US, so even if you send a USD transfer from outside the US, you'll still likely get nicked by this law.

that is correct if you delete "nearly" because ALL USD transfers go via the United States (NY) even transfers from one bank to the other which are located in the same building (e.g. Singapore).

sidenote: all EUR transfers go via Frankfurt, Germany.

1. so...if my european employer transfers my salary in USD to my UK USD account it will pass through a US bank?

2. and...any transfer that I make from my euro account in the UK to Thailand shall pass thru Frankfurt?...similarly for USD from the UK account to Thailand must pass thru the US?

3. I know that banks use intermediaries to transfer funds as when in saudi euros that are transferred to Thailand pass thru a bank in Germany but I thought that this for the transferring bank's convenience and not required by any currency transfer law...

4. oh, naam...why do you wanna make my life complicated?...I thought you was my fren'...

1. yes

2. yes

3. leave the thinking to horses. they have big heads and big brains.

4. don't worry, i will always be your friend

[BEENTHEREDONETHAT]

If your money is in a credit union I assume these laws don't apply unless you wire the money in US dollars and then they use a correspondent bank to do that.

So the question is can u use credit unions (in foreign countries) to avoid this problem?

[ding]

Just a tip of the hat to gregb, thanks for all! It is possible I'll be affected but if that's the case... in my case, it's a good problem for a peon like myself to have.

Looks like I'll keep my house here to help income there, at least until this bankster country trainwrecks completely.

[chiang mai]

Wow, if that interpretation of the new law is correct it's a pretty horrendous step, no private or public US outbound payments can be made other than to a US approved bank globally, and they say Thailand is amazing!

[flying]

Wow, if that interpretation of the new law is correct it's a pretty horrendous step, no private or public US outbound payments can be made other than to a US approved bank globally, and they say Thailand is amazing!

Yeah well wait till you see the wall they are building Will make Berlin & China look tiny

It starts in California goes down pass Mexico around Florida & comes up at New York.

They say they will leave the north open to Canada for now though....They figure you will end up in Alaska if anything

[Carmine6]

...

This means that a bank, say Bangkok Bank, has an account holder, say you, who doesn't want to provide a SSN, there has to be some kind of central reporting system that Bangkok Bank can inform about your recalcitrant status, and then the sending bank is responsible for checking this and doing the 30% withholding.

...Otherwise, what is Bangkok Bank supposed to do? Send a FedEx to every single bank in the world saying "hey guys, if on the off chance someone wants to wire USD to this particular account at my bank, you need to withhold 30% and send it to the US government". Somehow I do not find that realistic.

...This looks god awful complicated. I can see a couple of years of development effort in this specification.

It is not quite that complicated, but it is how they can impose reporting requirements even where they have no actual jurisdiction. The foreign banks themselves, such as Bangkok Bank, are required to enter an agreement to withhold the 30% from the transfer, and do the required reporting. If they don't enter into the agreement and comply, then that bank will be labeled as not complying, and then the sender in the US would withhold 30% of transfers to that bank. On a practical level, if the receiving bank isn't in compliance, how does the sender know any account isn't subject to the tax? Seems like they'd withhold 30% of all transfers to that bank.

SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL INSTITUTIONS

‘(a) In General- In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (, the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.

But here's an important definition:

‘SEC. 1473. DEFINITIONS.

‘(A) IN GENERAL- The term ‘withholdable payment’ means--

‘(i) any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States, and

‘(ii) any gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States.

( EXCEPTION FOR INCOME CONNECTED WITH UNITED STATES BUSINESS- Such term shall not include any item of income which is taken into account under section 871((1) or 882(a)(1) for the taxable year.

‘© SPECIAL RULE FOR SOURCING INTEREST PAID BY FOREIGN BRANCHES OF DOMESTIC FINANCIAL INSTITUTIONS- Subparagraph ( of section 861(a)(1) shall not apply.

What this seems to do is extend the withholding requirement that exists for foreigners with financial accounts in the US, to US citizens living overseas, unless their banks are in compliance. It is trying to trap taxable funds not transfers of cash in the bank. Although don't count on the intent to determine policies. Regular transfers from a US bank account might get caught up by some banks. It's also entirely likely that many banks will set their balance requirement to well below the $50,000 minimum before they ask for a tax id.

Here's the text:

http://www.opencongress.org/bill/111-h2847/text

Edited March 30, 2010 by Carmine6

[cloudhopper]

I suspect that the Thai banks have already been fully cooperating with the US and predict that we will see no effect whatever here.

I am going to wire 40k USD into my Thai account in a few days and I will report if there is any change from before (i.e. no questions on amounts below 50k and asking me what I was using it for on amounts over that).

[LungKen]

This is getting ridiculous. I welcome someone with actual KNOWLEDGE about what this news specifically means to post here. Not interested in theories and speculation.

It means that any and all foreign banks based on any American soil when they send monies in the amount

in excess of $10,000US they are to withhold 30% and report said amount to the US gov. and the IRS for

tax accountability as well as the legitimacy of the monies. If by law thay do not or can not do this thay are

to close the account....and the US gov. will an has done so in the past and now it is the Law and has been written so.

[Naam]

Wow, if that interpretation of the new law is correct it's a pretty horrendous step, no private or public US outbound payments can be made other than to a US approved bank globally, and they say Thailand is amazing!

most of the multinational banks have since years the "Q.E." (qualified intermediary) status, meaning they report to the IRS with Forms 1099 all income of any account holder who is liable to share his proceeds with the IRS. a different form (don't remember the nunmber) was used for all transactions for capital gains tax purpose. we (my wife and me) encountered this "problem" when living in the U.S. and opted to be "U.S. persons" although we are both german citizens. at that time our bank in Luxembourg explained the consequences and gave us ample time to make some small tax optimising adjustments.

the procedure is internationally still the same but i doubt that any bank in Thailand complied until now with this regulation although Bangkok Bank has a branch in N.Y. and should therefore possess Q.E. status. perhaps a TV-member who is a U.S. citizen and banks with Bangkok Bank could shed some light on how it has been handled until now in Thailand.

[chiang mai]

Wow, if that interpretation of the new law is correct it's a pretty horrendous step, no private or public US outbound payments can be made other than to a US approved bank globally, and they say Thailand is amazing!

most of the multinational banks have since years the "Q.E." (qualified intermediary) status, meaning they report to the IRS with Forms 1099 all income of any account holder who is liable to share his proceeds with the IRS. a different form (don't remember the nunmber) was used for all transactions for capital gains tax purpose. we (my wife and me) encountered this "problem" when living in the U.S. and opted to be "U.S. persons" although we are both german citizens. at that time our bank in Luxembourg explained the consequences and gave us ample time to make some small tax optimising adjustments.

the procedure is internationally still the same but i doubt that any bank in Thailand complied until now with this regulation although Bangkok Bank has a branch in N.Y. and should therefore possess Q.E. status. perhaps a TV-member who is a U.S. citizen and banks with Bangkok Bank could shed some light on how it has been handled until now in Thailand.

I understand the part about multi-national banks Naam, but when I take it to the next level and consider non-multinational banks are now involved in this loop it comes as a shock that they are now being forced, er, coerced perhaps, into participating.

[Naam]

I understand the part about multi-national banks Naam, but when I take it to the next level and consider non-multinational banks are now involved in this loop it comes as a shock that they are now being forced, er, coerced perhaps, into participating.

perhaps it is not as serious as it looks now and panic might not be warranted. but somehow i am happy for those of my american friends who live abroad and followed some years ago my advice "get your things out before it gets even tougher". that was during the Bush administration, Patriot Act and similar goodies.

[Carmine6]

This is getting ridiculous. I welcome someone with actual KNOWLEDGE about what this news specifically means to post here. Not interested in theories and speculation.

It means that any and all foreign banks based on any American soil when they send monies in the amount

in excess of $10,000US they are to withhold 30% and report said amount to the US gov. and the IRS for

tax accountability as well as the legitimacy of the monies. If by law thay do not or can not do this thay are

to close the account....and the US gov. will an has done so in the past and now it is the Law and has been written so.

There's no $10,000 threshold mentioned anywhere in the legislation that I can find. The OP mentioned that amount for some reason. $10,000 is a threshold for several different bank reporting situations such as depositing cash in a bank or making an international wire transfer, but not for this legislation.

They are trying to withhold taxes on potentially taxable disbursements such as interest, dividends, wages, etc. So any amount is subject to this, with the way out being the bank and customer meeting the reporting requirements.

Feel free to search for any limit yourself in the text. Starts at Sec. 1471.

http://www.opencongress.org/bill/111-h2847/text

[Langsuan Man]

I suspect that the Thai banks have already been fully cooperating with the US and predict that we will see no effect whatever here.

I am going to wire 40k USD into my Thai account in a few days and I will report if there is any change from before (i.e. no questions on amounts below 50k and asking me what I was using it for on amounts over that).

I just wired $106,000 into my SCB account last Thursday and all that happened was a phone call from them (SCB) asking what it was for so that they could fill out the Exchange Certificate, which they emailed me as an attachment, I signed and returned to them, once again, as an attachment

At least Thai banks are willing to accept a signed form via an email attachment, where my US bank insisted on a FAX

[Lost in LOS]

this is the tip of the iceberg for whats coming. I had been warned by several people for the last year, one of them being Naam. There are more things in the works, america is desperate and the econmy is in the tank. They have maxed out their credit card and now can even pay the minimum payments

side note

2 of my friends came through American customs to here four days ago. there were armed, officials, maybe FBI, they weren't sure. The questioned everybody. Did they ask about drugs? no. Did they ask about women? No All they asked everybody, not in a friendly manner, was how much money are you carrying. They searched several people and every woman's purse. Now I can see why.

I was afraid if Obama was elected he would do what he said he was going to.....distribute the wealth. He has exceeded my worries. And for him not to get re-elected might be tough, more than half of the US population dont pay taxes. If you ask someone who doesn't pay taxes do you want a lot of free stuff from the rich which you wont have to earn or pay for, elect me. Who do you think they will vote for.

[Naam]

this is the tip of the iceberg for whats coming. I had been warned by several people for the last year, one of them being Naam. There are more things in the works, america is desperate and the econmy is in the tank. They have maxed out their credit card and now can't even pay the minimum payments

it's not limited to the U.S., for Europeans the writing is on the wall as well. until now we Europeans enjoyed being tax free if living out of €U-land in countries which levy no or very low taxes. but i am sure our politicians are eager to copycat the U.S. taxing citizens on their worldwide income no matter where they live. although it might take years to get that legislation passed, provisions/preparations should be made now and not in the last minute when the sh*t has hit the fan.

[lannarebirth]

this is the tip of the iceberg for whats coming. I had been warned by several people for the last year, one of them being Naam. There are more things in the works, america is desperate and the econmy is in the tank. They have maxed out their credit card and now can't even pay the minimum payments

it's not limited to the U.S., for Europeans the writing is on the wall as well. until now we Europeans enjoyed being tax free if living out of €U-land in countries which levy no or very low taxes. but i am sure our politicians are eager to copycat the U.S. taxing citizens on their worldwide income no matter where they live. although it might take years to get that legislation passed, provisions/preparations should be made now and not in the last minute when the sh*t has hit the fan.

Correct. I think some or even many "offshore" schemes are probably going to come undone as well.

[colibra2]

Hey guys didn't mean to get you all upset. I think from what I have been reading around the net. They want to know if you move over $10,000, just like at the airports if you have over $10,000 in cash that your carrying. So I would look for this to apply to any transfer that is 10,000 or over. Seems to me that I read about a link in this bill to another bill which clarifies that this will be the case. I will see if I can track it down.

To any one out there if your planning on leaving the good old USA. Better get out now. If your out of the country and your a US citizen you might want to think about what you would do if they canceled all passports. From what i hear this is there intension. No link sorry. Good luck to all of you.

YES WE CAN.

[NovaBlue05]

Why cancel passports? It's not like they want the people, they just want the peoples money. Best case for them is they secure access to our money but keep us outside where we can't use programs like medicare.

[flying]

side note

2 of my friends came through American customs to here four days ago. there were armed, officials, maybe FBI, they weren't sure. The questioned everybody. Did they ask about drugs? no. Did they ask about women? No All they asked everybody, not in a friendly manner, was how much money are you carrying. They searched several people and every woman's purse. Now I can see why.

This actually really took off since last Jan/Feb 09

When I went through they questioned my wife & I.

They were quite adamant about it & almost upset when I joked each or combined....

Anyway they pulled us out of line & made us fill forms. They did not ask to see it though or count it.

Perhaps they are up to that now

[Carmine6]

Hey guys didn't mean to get you all upset. I think from what I have been reading around the net. They want to know if you move over $10,000, just like at the airports if you have over $10,000 in cash that your carrying. So I would look for this to apply to any transfer that is 10,000 or over. Seems to me that I read about a link in this bill to another bill which clarifies that this will be the case. I will see if I can track it down.

To any one out there if your planning on leaving the good old USA. Better get out now. If your out of the country and your a US citizen you might want to think about what you would do if they canceled all passports. From what i hear this is there intension. No link sorry. Good luck to all of you.

YES WE CAN.

The $10,000 reporting threshold on international wires has been around for a while. However there was no withholding requirement, banks were just to report those transfers.

I think you are wrong about the $10,000 threshold applying in this case. It seems to be any amount, however seems to relate to potentially taxable distributions, not someone wiring money from their US bank account to their account in Thailand or another country. However any third party transfer could be rent or compensation, so those could fall under this depending on how they write the regulations.

Here again is the list of "Withholdable Payments":

(i) any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States, and

‘(ii) any gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States

[Jingthing]

So if 30 percent is withheld, then what? How can you get it back?

I am not a lawyer and I still don't understand exactly what this law is going to mean to me and people like me (doing SWIFT transfers from a US account in my name to a Thai bank account in my name).

Edited March 30, 2010 by Jingthing

[Jingthing]

I suspect that the Thai banks have already been fully cooperating with the US and predict that we will see no effect whatever here.

I am going to wire 40k USD into my Thai account in a few days and I will report if there is any change from before (i.e. no questions on amounts below 50k and asking me what I was using it for on amounts over that).

I just wired $106,000 into my SCB account last Thursday and all that happened was a phone call from them (SCB) asking what it was for so that they could fill out the Exchange Certificate, which they emailed me as an attachment, I signed and returned to them, once again, as an attachment

At least Thai banks are willing to accept a signed form via an email attachment, where my US bank insisted on a FAX

I don't think that had anything to do with the new US law. It is about the Thai exchange certificate, such as when buying condos.

Edited March 30, 2010 by Jingthing

[BEENTHEREDONETHAT]

It is possible that the banks say the hel_l with it, we don't want to do the IRS's book keeping for them, we will close all US passport holders accounts. So you would have no way to get your money into thailand or be able to cash your SS check.

Any thoughts on what to do if that happens? Short of moving.

[Jingthing]

It is possible that the banks say the hel_l with it, we don't want to do the IRS's book keeping for them, we will close all US passport holders accounts. So you would have no way to get your money into thailand or be able to cash your SS check.

Any thoughts on what to do if that happens? Short of moving.

Thailand without American expats? I think we will hardly be missed.

Does this law take effect immediately? How can the foreign banks be expected to comply with this instantly?

Please people, report your experiences here starting now with SWIFTS from the US, whether they are uneventful or if something bad happened, including the Thai bank you use. This could be very serious for Americans here, and we should try to help each other share information so we can figure out what is actually happening, and what we can do, if anything, to prevent problems. If some Thai banks are playing ball and others aren't, we need this information so we can switch banks. Of course people should be filing their annual treasury forms.

Edited March 30, 2010 by Jingthing

[Jingthing]

I suspect that the Thai banks have already been fully cooperating with the US and predict that we will see no effect whatever here.

I am going to wire 40k USD into my Thai account in a few days and I will report if there is any change from before (i.e. no questions on amounts below 50k and asking me what I was using it for on amounts over that).

Yes, please report. Some questions. I assume your Thai bank doesn't have your US SS number, correct? Has your account gone over 50K in the year and will it with this wire? What Thai bank? Does your US bank send through a second US based Thai bank?

Edited March 30, 2010 by Jingthing