Beep for the U.S. Citizen!

by P. T. Freeman The Nestmann Group, Ltd.

Recently by P. T. Freeman: Are You the Property of Your Government?

I arrived here in the Commonwealth of Dominica earlier this week. It’s always a pleasure to come here; I go through the “residents” line at passport control and the official stamps my Dominica passport with the notation “RR” for returning resident.

I’m here with my friend and colleague Mark Nestmann. We’re here to follow up on pending applications for citizenship in the government’s Economic Citizenship Programme. The Nestmann Group, Ltd. is an authorized agent for this programme – indeed, it is the only company in the United States with this designation. While here, we’re also meeting with our attorney as well as various government officials.

I had a personal reason to visit as well, as I wanted to open an account at a local bank. After calling for an appointment, I went to the bank at the appointed time. Since I’ve had a continuous banking relationship with this particular bank for more than a decade, I didn’t think opening another account there would be difficult, although I knew I would need to update some of the personal information they had on file.

The process turned out to be more complex than I had anticipated. To begin with, I presented the bank representative with my Dominica passport, driver’s license, along with proof of residential address. Since I already have a relationship with the bank, it didn’t require additional reference letters or other aspects of Dominica’s recently updated “Know Your Customer” rules.

However, as the account officer was entering my information into her computer, I heard an audible beep. She frowned, looked closely at the screen, and then looked at my Dominica passport. She then said “uh oh! You were born in the United States?” I told her that yes, I had been born there. “This may be a problem,” she responded. “I’ll have to talk to our compliance department.”

She then asked me what ties I had to the United States, to which I replied “only family. I’m no longer a U.S. citizen.” I also explained that I could prove my non-U.S. citizen status with a CLN, or Certificate of Loss of U.S. Nationality.

The account officer then made a phone call to another department – I assume the compliance department – giving a brief description of the situation. She told the person on the other end that “the client is no longer a U.S. national.” After that she hung up the phone, asked for a copy of the CLN. Once I produced it, she then said “no problem, sir. We’re happy to open this account and have you as a client.”

This is just one more illustration of the fact that Americans are no longer welcome at the vast majority of foreign banks. Even if you produce a valid non-U.S. passport when you try to open an account, your U.S. citizenship – as indicated by the birthplace listed on your passport – may make you ineligible for the account.

The decision to give up U.S. citizenship is a serious one. I took this step nearly 15 years ago. You should take this step only after consulting with your family and professional advisors. But it’s the only way that U.S. citizens and long-term residents can eliminate U.S. tax liability on their non-U.S. income, wherever they live. And while The Nestmann Group, Ltd. has some relationships with foreign banks that still take U.S. citizens, the vast majority of the world’s banks are willing to work only with non-U.S. citizen clients.

For more information on second passports or expatriation, please contact us for a consultation.

Reprinted with permission from The Nestmann Group, Ltd.

P.T. Freeman is a friend, business partner, and former U.S. citizen who now resides in the Caribbean.