Submitted by ‘Kevnice’ via ForeignByNature.com,
In April 2012, I returned to Switzerland – my country of birth – to commence a new phase of my adult life.
Naturally, one of the first steps to undertake when establishing oneself in a new country is to open a bank account.
I went down to the local Raiffeisen bank branch in the village of Aesch, Luzern, where my relatives and ancestors had lived and worked as farmers for over 10 generations.
At the bank I received the standard application forms required to open a basic checking account. The form asked me about my nationality. I marked Swiss as my nationality, and the United States as my second nationality.
The clerk reviewed the forms I had submitted. After careful consideration and some internal discussion she said, “I am sorry, we cannot open a bank account for you because you are a US citizen”.
“But I am a Swiss citizen!” I complained, in Swiss-German.
“I know, but you have the US nationality. Earlier this month we received a directive from top management not to open any more accounts for US passport holders, even if they are also Swiss. I am really sorry, but we cannot do anything for you”, she said.
I left the bank angry and confused.
I checked with several other banks. It was the same story with all of them.
I told the story to my Swiss relatives. They all had the same reaction: “But you’re Swiss!”
Nobody could understand.
At that time I was completely ignorant of FATCA, the global taxation of US citizens, the requirement to report foreign bank account balances over 10,000 USD to the US Treasury (FBAR), and all these compliance matters that – at least among US expats – have become hot button topics in recent years. I left the US at the age of 22 after university, never having really worked there beyond the part time student job, and had been living in Japan and Taiwan for the previous 7 years teaching English before moving to Switzerland.
It’s not as though the US government gives you an exit interview when you leave the country, explaining to you how to comply with all of their cumbersome laws. The burden is on you – the taxpayer – to inform yourself, or face heavy penalties – up to $10,000 for each year of non-compliance.
You’re guilty until proven innocent.
Suddenly, I realized that I had technically been non-compliant with the US for years, although I never made much money.
I was furious. What right did the US government have to try to tax me or make me declare anything to them, not having lived there for almost 10 years? No other developed country in the world requires this. I didn’t make enough money to actually have to pay US tax (you can exclude around $100K as foreign income), but the very principle of having to comply enraged me.
This was when I first considered renouncing my US citizenship.
I contacted the embassy in Bern, who quickly sent me an information package. All I had to do was back-file five years of returns (I could exclude all my earnings from US taxation), make an appointment at the US embassy in Bern, and pay a $450 administration fee. As I was already a citizen of Switzerland at birth I wouldn’t have to pay any exit tax. It only took 2-3 weeks to receive an appointment. It seemed quick and easy.
However, I hesitated.
What about my mother? She still lived in the US. What if she got sick or something? What if Switzerland or Europe becomes a terrible place to be in the future? What if the EU breaks up?
I thought it might be wise to keep my US citizenship, just in case. A second nationality is like an insurance policy against economic and social decline in the country of your first nationality.
But what to do, exactly? Should I go through the rest of my life outside of the US lying about it, maintaining that I am only Swiss?
I had been non-compliant for years already and had never heard anything from the US authorities. Maybe I could just continue under the radar forever?
Or should I just swallow my dignity and comply with all their rules? I only had to file a simple tax return and the FBAR form. As mentioned, I made too little money to owe tax anyway.
How did this concern my wife? What happens when we have children, and I die – wouldn’t they have to pay US inheritance tax on everything I owned? What would be the point of keeping US citizenship if I wasn’t planning on passing it on to my children?
I went back and forth like this in my mind for a couple of years. I couldn’t make a decision. I did not want to lie for the rest of my life, but neither did I want to comply.
Then in September 2014 came the tipping point for me: The US State Department raised the administration fee for renunciations by 522%, from $450 to $2,350!
I realized then that I was dealing with a criminal institution. They were the Mafia – either pay protection money your whole life, or pay one lump sum to get out.
What was preventing them from deciding to raise the fee to $5,000, or even $10,000?
Nothing prevents them. They could do whatever they wanted. There had been record numbers of renunciations over the past few years. It was good business. It’s not like there existed a powerful expat lobby in Washington pressuring them to change their policies on renunciation.
Rage took hold of me again. I was also angry at myself for hesitating on my first instinct and that my hesitation would cost me $2,000.
I let my rage stew for a few months. I researched the various forms of relinquishment, to see if I could find a way out of paying the fee (Renunciation is one type of relinquishment, and certain types of relinquishment do not require payment of the fee).
However I wasn’t ready to pledge allegiance to al-Qaeda and none of the other situations or criteria applied to me, so I finally bit the bullet and made an appointment for renunciation.
The Administrative Process Begins
My appointment was set at the embassy in Bern for February 20, 2015.
I had been told by the embassy beforehand that it generally took 2-3 months to process the Certificate of Loss of Nationality (CLN), the document which officially states that you are no longer a US citizen.
A few days before my appointment, I went to a networking event where I spoke with two insurance professionals who served foreign clients. They both related stories to me of US citizens in Switzerland that had renounced their citizenship. For one client it took the government 1 year to process his CLN. The other client had renounced 18 months earlier and still hadn’t received his CLN.
What the hell was going on?
February 20th arrived. My appointment was at 3 pm so I took the afternoon off work and headed to Bern.
It was an unseasonably warm and sunny day. People relaxed on benches and parks throughout the city as I walked. The sapphire blue sky was completely clear of clouds and there was no haze. You could see the awe-inspiring Alps in the distance with total clarity, the glimmering snowy tops providing a stunning backdrop to the gorgeous architecture of Bern.
I was early for my appointment so I relaxed in one of the parks near some teenagers. I wished I could worry about music and girls and who was cool in school instead of fretting over nationality and tax compliance. I collected my thoughts.
I went to enter the embassy about 15 minutes before my appointment. There were several US flags flying outside. I felt no emotion when I looked at them.
The entrance was guarded by some kind of African military guy wearing a bulletproof vest who opened the door after I rang a bell.
I had my work laptop with me. He gestured toward my laptop bag.
“Is that a laptop? Sorry, no laptops allowed in here”, he said in accented English.
Of course they were concerned with terrorists. I had heard that the Swiss branch of the CIA was headquartered in the same building.
But what the hell? There was never any mention about a No Laptop Policy in the information package I had received from Bern. I thought that it could be rather common for people to have a laptop with them.
I looked around. There was nowhere to put it.
“Uhhh… what do I do then? Where can I put this?” I asked him.
“Go see the lady outside by the security box”, he replied.
I asked her and she told me in Swiss-German that there was a police station a couple of short blocks down the way where I could leave it.
I headed down the street and looked around. I went left, then right. I did not see any police station.
I asked a guy on the street. He didn’t know anything about a nearby police station.
I checked the time on my mobile. I had less than 10 minutes. I didn’t want to be late for this appointment. I thought that they might cancel on me if I was a minute late – you never know with bureaucrats.
I jogged back to the lady at the security box.
“Sorry”, I said, “I looked around but did not see any police station. Can you indicate it again please?”
“It’s that building with the red awning”, she told me while pointing to the end of the street.
I went back to that building. There was something that looked like a bakery with a red awning, but it certainly wasn’t a police station.
I checked my mobile again. 5 minutes until my appointment. I started to sweat.
Next to the bakery there was an apartment building. I checked the entrance and it was open. I ran in there, quickly stashed my laptop bag behind some plants in a common/smoking area on the first floor, and jogged back to the entrance with 2 minutes to spare.
Once inside the building I went through the metal detector and checked my mobile phone in with security. They directed me down some stairs to a basement level.
As I walked into this area a female security guard greeted me.
“Good afternoon. I need to ask you to take off your sunglasses”, she said.
“They aren’t sunglasses”, I said. They are regular prescription glasses that tint when exposed to UV rays.
“What do you need them for?” she asked.
“To move through space”, I informed her.
“Well we don’t allow sunglasses in here. So please take them off until you reach the seating area.”
I took off my glasses and used sonar to find a seat, then put my glasses back on.
Once I regained my vision I saw that there were 3 other renunciants waiting before me, with expressions of resignation on their faces.
I was feeling too somber and involved in my own thoughts to make chit chat. I sat there silently.
While I was waiting, I eavesdropped on a British-accented woman talking with one of the other renunciants. She also had brought a laptop with her and in the course of conversation confirmed that the building with the red awning was indeed a bakery. They permitted her to store her laptop there for 3 Swiss francs.
What kind of an embassy is this? Running a cash-for-laptop-storage scam? Is this the embassy of the leader of the free world or that of a banana republic?
I only had to wait about 5 minutes. First, you go to a window and answer a few basic questions. They give you a pay slip which you then take to another window to make the payment of the $2,350. I got to the payment window which required you to ring a bell to open. I rang the bell and waited about 2 full minutes before someone answered.
I made the payment and they gave me a receipt. Then I took my receipt with me back to the waiting area.
While I was waiting, I watched and heard two other people go through the entire renunciation process, which takes less than 5 minutes. So it was anti-climactic when it was finally my turn as I had just heard everything twice.
My turn. I met with the consul, a big friendly portly man behind a bulletproof window. I had to confirm some information in writing. Then he recited the Oath of Renunciation; I didn’t even need to say it myself. When he finished, I signed a statement which includes the text of the Oath.
I handed over my US passport which he then took and punched a few holes in, invalidating it.
The consul then informed me that it would take 3-5 months before I would receive my CLN. It would be mailed from Washington to the embassy in Bern, and they would contact me when they received it.
He then asked me if I had any plans to travel to the US during this time. I said No.
He explained to me that until I receive my CLN, I would not yet be officially non-American. US immigration law however states that US citizens must enter the United States on their US passport, which the embassy had just confiscated. This meant that it was very likely that I would be barred from entry if I tried to enter the US, unless it was an emergency such as a funeral, in which case they might let me in provided that I could document as much as possible (i.e. provide a death certificate).
I told him that was fine. I didn’t need to enter the US in the next 3-5 months.
That concluded my renunciation. The whole thing was over in about 30 minutes. I grabbed a can of beer on the way to the train station and headed home, feeling the whole experience to be surreal.
Administrative Ping Pong
It was August 2015. Six months had gone by and I had not heard anything from Bern.
My mother suggested that I called the embassy. Of course US consular services are only available for calls during a 2 hour window each day.
Once I got through and identified myself, I explained that I had been told it would take 3-5 months to process my CLN and that now 6 months passed by without news.
“Yeah”, began the counselor, “it has been taking a lot longer lately due to some IT issues. I see that your application is still open but it is somehow hung up in the system in Washington. I am afraid there is nothing we can do about this from here.”
“OK, that’s fine, I will just wait a bit longer”.
I waited longer. The temperature cooled down and the leaves changed color.
Then it was October. My mom was starting to freak out a little and suggested that I call again. I explained that they had said there was nothing they could do. She insisted that I try again.
So I called again.
“Yeah”, began the counselor, “it has been taking a lot longer lately due to some IT issues. I see that your application is still open but it is somehow hung up in the system in Washington. I am afraid there is nothing we can do about this from here.”
“OK, that’s fine, I will just wait a bit longer”.
I practically gave up at this point. My mom started writing letters to her local Congressman.
The leaves fell from the trees and were replaced with snow. Christmas and New Year’s came and went.
Over the holidays, I had an idea. I recalled that a college buddy of mine was in the Peace Corps and had later been placed at the US Department of the Treasury. So I called in a favor. I asked him if he knew anyone in the State Department, specifically US Citizens Services.
It turns out he did. He put me in touch with someone at State named Eric, who knew someone else that handled renunciations.
I wrote an e-mail to the contact. She responded, saying that my case had been resolved already in April 2015 and that Bern should have my paperwork.
Incredulous, I called Bern a few days later in early January 2016.
“Hey Bern, Washington told me that my case had been resolved already 9 months ago and that you should have my paperwork”, I complained.
“That is incorrect”, replied Bern. “It was with Washington until only a few days ago when it was sent back over to us”.
“I see. Do you think that Washington just forgot to click a button or something in the system? And that it came back to you because I contacted them, and they finally moved it forward?” I asked.
“We can’t be sure, but that sounds about right”, they replied.
Sure enough, a week later I finally received my Certificate of Loss of Nationality.
Final Thoughts
My experience with the delays and the experiences of those others I mentioned (plus other similar experiences that I read about on various message boards) left my Spider Sense tingling. While I can never be sure, the conspiracy theorist in me wonders whether certain administrators in Washington don’t intentionally delay finalizing renunciation cases as a form of administrative punishment. They know that you are in administrative limbo and cannot visit the US during this time. Could it be a final, spiteful, parting middle finger in your face from the US government?
That’s the kind of high level service you get for paying exorbitant government fees. You would think that with such a price tag you’d at least get quick service. In the end I needed to use government contacts and pull administrative strings to finally receive the service for which I paid so generously.
It didn’t do much to diminish the impression I had of dealing with a banana republic, rather than the greatest superpower the world has ever known.
- That said, I am truly grateful. I consider myself to be quite lucky.
- I am grateful to have been a citizen at birth of one of the most prosperous, most developed, and most democratic societies in the world. Without Swiss citizenship it would have been a much more difficult decision.
- I am grateful that I did not have any assets or much money when I renounced, which made compliance easier and virtually costless.
- I am grateful that I was not subject to exit tax. For those subject to exit tax, upon renunciation the IRS taxes you as if you had sold all of your assets.
- Finally, I am grateful that I do not have to vote in the 2016 US presidential election.
