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AMERICANS IN EUROPE

How Americans in Europe are struggling to renounce US citizenship

Americans living in Europe have their reasons for wanting to give up US citizenship but due to the pandemic many are effectively blocked from doing so and it's impacting their lives, writes Elizabeth Anne Brown.

How Americans in Europe are struggling to renounce US citizenship
Photo by Annika Gordon on Unsplash

In March 2020, the US State Department ordered embassies across the world to limit the services they offer to citizens abroad.

Embassies have gradually reopened in step with their host countries, but one service remains off the menu at the major embassies in Europe — the process of renouncing American citizenship. 

For nearly two years, Americans have been unable to begin the process of renouncing their US citizenship. But why, when the US allows dual citizenship with many countries, would anyone want to hand in their passport in the first place? 

Reasons for renouncing 

Some, like Joshua Grant, are disenchanted with American politics and want the right to participate in the political process of their new home country. Originally from Selma, Alabama, Grant has lived in Germany for over a decade and has been attempting to renounce his citizenship since he and his partner married in 2020. (While the US allows dual citizenship with Germany, Germany generally requires naturalized non-EU citizens to cut ties with their country of origin. Although the laws are set to change.) 

Others — like United Kingdom’s Prime Minister Boris Johnson  are so-called “accidental Americans”, US citizens who have spent little to no time in the United States and only got their American passport through an accident of birth. (Johnson was born in New York while his father was studying at Columbia University). 

The reason Johnson eventually renounced his citizenship, and far and away the most common reason for it is tax-related, since all US citizens – even if they have never earned money in the US and have barely spent any time there – are expected to file an annual tax declaration with the IRS.  

And recent legislation has made things even more complicated for US citizens abroad. The Foreign Account Tax Compliance Act (FATCA) of 2010 has made it mandatory for foreign banks to report accounts held by US citizens to the IRS – or face penalties themselves. 

Are you an American living in Europe trying to renounce your US citizenship? We’d like to hear from you and to hear how it’s affected your life. Please email us at [email protected]

European banks were expected to comply with FATCA by 2020. As financial institutions have become stricter about reporting accounts to the IRS in the leadup to the 2020 deadline, some American citizens abroad have faced a higher tax burden.

Other US citizens have found European banks reluctant to allow US citizens to open accounts, or even bar them altogether. Coupled with new taxes introduced under ex President Donald Trump and his successor Joe Biden, it’s made the prospect of returning their US passport attractive to many. 

How many Americans renounce citizenship yearly? 

The pent-up demand for appointments to renounce citizenship is difficult to calculate, experts say, considering we don’t even have firm numbers on how many Americans undertake the process each year. 

The IRS publishes a quarterly list of names of people who have successfully expatriated, but they’ve acknowledged the list is problematic – it often includes people who returned their green cards rather than renounced citizenship, and some names aren’t published until months or years after the event. Some lawyers interpret the statue to mean only expats over a certain income threshold need to be included in the list, while others argue it should include every case. The IRS hasn’t made clear what criteria they consider for inclusion. 

The FBI also tracks expatriations in the National Instant Criminal Background Check Index, and the FBI and IRS’s tallies vary wildly. For example, in 2020, the IRS reported 6,705 expatriations while the FBI only added 3,764 names to their list. 

Several outlets—including the Guardian and Axios—have cited an estimate by a in international tax lawyer based in Poland that as many as 30,000 expatriation applications would have been filed since March 2020 if embassies had been open for business as usual. Given that successful expatriations have ranged between 1,000 and 6,000 a year since the early 2000s, this would represent an unprecedented increase. 

District Court lawsuit 

Joshua Grant says that his delayed expatriation has been more a frustration than a practical issue — he’s lived in Germany for more than a decade and has already established permanent residency.

“It’s not so much that I’m impaired, it’s more psychological,” Grant says. “I just want to move on with my life”

“More than a year into this process, I really thought I was going to be able to vote in the last German election.” 

But for some, the shutdown of applications has had serious financial consequences. 

Some “accidental” US citizens living in Europe have had bank accounts closed and mortgages denied as banks come into compliance with FATCA, the Washington Post reported in mid-2020. If they could only renounce their unwanted US citizenship, they say, things could return to normal. 

In late 2020, group called the Association of Accidental Americans filed a lawsuit against the State Department in a US District Court in Washington, DC, alleging mishandling of the expatriation process. According to leader Fabien Lehagre, the suspension of services for renouncing citizenship even as embassies resume non-immigrant visa services to foreign nationals is unconstitutional. 

“Giving up nationality, or voluntary expatriation, is a natural right which all men have,” Lehagre writes on the AAA website. “The US administration is not above the laws and Constitution of the United States. It cannot deprive us of the fundamental right of renunciation.” 

Lawyer for the AAA Marc Zell told The Local: “The lawsuit has made an impact.

“This comports with information we have received from other sources. We are open to resolving this dispute consensually.  What is important is that US citizens, accidental Americans and others, are able to exercise their fundamental right to expatriate as soon as possible. Our lawsuit is one way to make this happen.”

When will renunciation appointments be available? 

A spokesperson for the State Department didn’t directly respond to questions from The Local as to why appointments to renounce citizenship remain off-menu when other services that require in person appointments have been reintroduced.

“The health and safety of both our workforce and customers remains paramount,” the spokesperson said. “US embassies and consulates are working to resume routine services on a location-by-location basis depending on a wide variety of factors, including public health data, host country and local mandates, and local conditions.”

Asked why none of the major US embassies offer expatriation appointments even as the risk of Covid has subsided in several European countries, the spokesperson said that the Department wouldn’t comment since “this is the subject of ongoing litigation,” seemingly referring to the Association of Accidental Americans lawsuit. 

Are you an American living in Europe trying to renounce your US citizenship? We’d like to hear from you and to hear how it’s affected your life. Please email us at [email protected]

Member comments

  1. Renounce your US citizenship? You’d have to be bonkers.

    I’ve almost landed US citizenship twice in my life. Both times I was close – but no cigar as they say.
    A Swedish passport is good too, as it opens up the EU. But there is nothing like a US passport.

  2. Anyone who gives up their US citizenship is bonkers. Nutso.
    It’s a huge advantage to have US citizenship. It opens up work and living opportunities unlike any other. All you have to do is file your tax papers every year. If you’ve been paying taxes in Europe, which are higher, you don’t owe US anything. It’s just the small matter of filing. And that is pretty easy.

    Keep it. Don’t give it up and be sorry later.

    Jack.

  3. That’s twice the local has deleted a comment about the silliness of denouncing US citizenship.
    It is a great passport. One of the best.
    Don’t denounce.

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EUROPEAN UNION

How Europe plans to ease long-term residence rules for non-EU nationals

Non-EU citizens living in the European Union are eligible for a special residence status that allows them to move to another country in the bloc. Getting the permit is not simple but may get easier, explains Claudia Delpero.

How Europe plans to ease long-term residence rules for non-EU nationals

The European Commission proposed this week to simplify residence rules for non-EU nationals who live on a long-term basis in the European Union.

The intention is to ease procedures in three areas: acquiring EU long-term residence status, moving to other EU countries and improving the rights of family members. 

But the new measures will have to be approved by the European Parliament and the EU Council, which is made of national ministers. Will EU governments support them?

What is EU long-term residence?

Non-EU citizens who live in EU countries on a long-term basis are eligible for long-term residence status, nationally and at the EU level. 

This EU status can be acquired if the person has lived ‘legally’ in an EU country for at least five years, has not been away for more than 6 consecutive months and 10 months over the entire period, and can prove to have “stable and regular economic resources” and health insurance. Applicants can also be required to meet “integration conditions”, such as passing a test on the national language or culture knowledge. 

The EU long-term residence permit is valid for at least five years and is automatically renewable. But the status can be lost if the holder leaves the EU for more than one year (the EU Court of Justice recently clarified that being physically in the EU for a few days in a 12-month period is enough to maintain the status).

READ ALSO: IN NUMBERS: How many non-EU citizens live in European Union countries?

Long-term residence status grants equal treatment to EU nationals in areas such as employment and self-employment or education. In addition, EU long-term residence grants the possibility to move to other EU countries under certain conditions. 

What does the European Commission want to change?

The European Commission has proposed to make it easier to acquire EU long-term residence status and to strengthen the rights associated with it. 

Under new measures, non-EU citizens should be able to cumulate residence periods in different EU countries to reach the 5-year requirement, instead of resetting the clock at each move. 

This, however, will not apply to individuals who used a ‘residence by investment’ scheme to gain rights in the EU, as the Commission wants to “limit the attractiveness” of these routes and not all EU states offer such schemes. 

All periods of legal residence should be fully counted towards the 5 years, including those spent as students, beneficiaries of temporary protection or on temporary grounds. Stays under a short-term visa do not count.

Children who are born or adopted in the EU country having issued the EU long-term residence permit to their parents should acquire EU long-term resident status in that country automatically, without residence requirement, the Commission added.

READ ALSO: Why it may get easier for non-EU citizens to move to another European Union country

EU countries should also avoid imposing a minimum income level for the resources condition but consider the applicant’s individual circumstances, the Commission suggests.

Integration tests should not be too burdensome or expensive, nor should they be requested for long-term residents’ family reunifications. 

The Commission also proposed to extend from 12 to 24 months the possibility to leave the EU without losing status, with facilitated procedures (no integration test) for the re-acquisition of status after longer absences.

A person who has already acquired EU long-term residence status in one EU country should only need three years to acquire the same status in another EU member state. But the second country could decide whether to wait the completion of the five years before granting social benefits. 

The proposal also clarifies that EU long-term residents should have the same right as EU nationals with regard to the acquisition of private housing and the export of pensions, when moving to a third country. 

Why make these changes?

Although EU long-term residence exists since 2006, few people have benefited. “The long-term residents directive is under-used by the member states and does not provide for an effective right to mobility within the EU,” the Commission says. 

Around 3.1 million third-country nationals held long-term residence permits for the EU in 2017, compared to 7.1 million holding a national one. “we would like to make the EU long-term residence permit more attractive,” said European Commissioner for Home Affairs Ylva Johansson.

The problems are the conditions to acquire the status, too difficult to meet, the barriers faced when moving in the EU, the lack of consistency in the rights of long-term residents and their family members and the lack of information about the scheme.

Most EU member states continue to issue “almost exclusively” national permits unless the applicant explicitly asks for the EU one, an evaluation of the directive has shown.

READ ALSO: Pensions in the EU: What you need to know if you’re moving country

This proposal is part of a package to “improve the EU’s overall attractiveness to foreign talent”, address skill shortages and facilitate integration in the EU labour market of people fleeing Ukraine. 

On 1 January 2021, 23.7 million non-EU nationals were residing in the EU, representing 5.3% of the total population. Between 2.25 to 3 million non-EU citizens move to the EU every year. More than 5 million people have left Ukraine for neighbouring states since the beginning of the war in February. 

Will these measures also apply to British citizens?

These measures also apply to British citizens, whether they moved to an EU country before or after Brexit. 

The European Commission has recently clarified that Britons living in the EU under the Withdrawal Agreement can apply for a long-term residence too.

As Britons covered by the Withdrawal Agreement have their residence rights secured only in the country where they lived before Brexit, the British in Europe coalition recommended those who need mobility rights to seek EU long-term residence status. 

These provisions do not apply in Denmark and Ireland, which opted out of the directive.

What happens next?

The Commission proposals will have to be discussed and agreed upon by the European Parliament and Council. This is made of national ministers, who decide by qualified majority. During the process, the proposals can be amended or even scrapped. 

In 2021, the European Parliament voted through a resolution saying that third-country nationals who are long-term residents in the EU should have the right to reside permanently in other EU countries, like EU citizens. The Parliament also called for the reduction of the residency requirement to acquire EU long-term residence from five to three years.

READ ALSO: COMPARE: Which EU countries grant citizenship to the most people?

EU governments will be harder to convince. However, presenting the package, Commission Vice-President for Promoting our European Way of Life, Margaritis Schinas, said proposals are likely to be supported because “they fit in a broader framework”, which represents the “construction” of the “EU migration policy”. 

National governments are also likely to agree because large and small employers face skill shortages, “especially in areas that are key to our competitiveness, like agri-food, digital, tourism, healthcare… we need people,” Schinas said.

The article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.

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