The U.S. wants to know all about financial transactions. While the ostensible reason is to fight
Columbian druglords terrorism, the U.S. government’s urge to tax runs an extremely close second place.
Thanks to my correspondent Don for sending me a link to a news item from the BBC which describes an action of the European Parliament which bars the U.S. from monitoring European bank transactions.
There is a centralized bank messaging system that coordinates information relating to bank-to-bank transfers of funds. It is usually called “SWIFT“. This is one of those obscure but important underpinnings of finance.
The SWIFT organization is based in Belgium, and the United States had secret access to the data until that access was revealed in 2006. Look in the linked BBC or Wikipedia articles for background on how this U.S. anti-terrorism tool was outed by the New York Times and others in 2006. Park your politics at the door. We talk taxation only on this blog. 🙂
The United States wanted continued access to the bank transfer information known within SWIFT. The European Parliament rejected an agreement to allow continued access to SWIFT data.
The cited reason? Privacy concerns for EU citizens.
This makes it a tiny bit more difficult for the U.S. to get its hands on data for financial transactions occurring outside the United States. This in turn makes it a tiny bit more difficult for the IRS to catch tax evaders.