Home Expat Blogs The Long Arm of U.S. Law and Expats

The Long Arm of U.S. Law and Expats

2802
0
Passport and gavel
Credit: Dani Simmonds | Thinkstock
Spencer McMullen blogs on Expats In Mexico
Spencer McMullen

Whether you’re living in Mexico or planning to move here, you may not know that U.S. law still applies to you. In this blog I’ll cover some of the more common laws that affect expats in Mexico.

FATCA / FBAR

Provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.

FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts and focuses on reporting certain foreign financial accounts and offshore assets. It also requires foreign financial institutions to disclose information about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest. FATCA’s objective is the reporting of financial assets.

You should know that the new IRS Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts). Individuals must file each form for which they meet the relevant reporting threshold.

Exportation of Computers and/or Software

The key to determining whether an export license is needed from the Department of Commerce is knowing whether the item you intend to export has a specific Export Control Classification Number (ECCN). The ECCN is an alphanumeric code, e.g., 3A001, that describes the item and indicates licensing requirements. All ECCNs are listed in the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR), which is available on the Government Printing Office website. The CCL is divided into ten broad categories, and each category is further subdivided into five product groups.

Moving Your Vehicle from the U.S. to Mexico

Image credit: Anton_Sokolov | Thinkstock
Image credit: Anton_Sokolov | Thinkstock

The U.S. Census Bureau revised it’s regulations on March 14, 2013. One of the changes specified that used self-propelled vehicles must be filed in the AES 72 hours prior to export, no matter the value or country of ultimate destination. This change became enforceable October 3, 2014. You do not need to file if you are temporarily visiting the U.S., Canada or Mexico with your vehicle.

International Traffic in Arms Regulations (ITAR)

The Department of State is responsible for the export and temporary import of defense articles and services governed by 22 U.S.C. 2778 of the Arms Export Control Act (AECA); (see the AECA Web page) and Executive Order 13637). The International Traffic in Arms Regulations (ITAR, 22 CFR 120-130) implements the AECA. The ITAR is available from the Government Printing Office (GPO) as an annual hardcopy or e-document publication as part of the Code of Federal Regulations (CFR) and as an updated e-document.

Extraterritorial Sexual Exploitation Of Children

The extraterritorial sexual exploitation of children is the act of traveling to a foreign country and engaging in sexual activity with a child in that country. Federal law prohibits an American citizen or resident to travel to a foreign country with intent to engage in any form of sexual conduct with a minor (defined as persons under 18 years of age). It is also illegal to help organize or assist another person to travel for these purposes. This crime is a form of human trafficking, also referred to as child sex tourism. Convicted offenders face fines and up to 30 years of imprisonment.

Office of Foreign Assets Control (OFAC)

The U.S. government posts a blacklist of terrorist and criminal organizations and their affiliates. U.S. citizens can be subject to sanctions for doing business with these individuals and groups. You can get in trouble by renting a commercial space from a prohibited entity or doing business with them, so better to check and be safe.

The Office of Foreign Assets Control of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.

Foreign Corrupt Practices Act (FCPA)

The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. (FCPA), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.

The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.

Things You Should Keep in Mind if You Become a Mexican Citizen

Image credit: Charles Taylor | Shutterstock
Image credit: Charles Taylor | Shutterstock

When you renew your passport, you should read the fine print on Expatriating acts and notifications.

Passport applications require that you disclose that you acquired another nationality by attaching an explanatory statement. It also mentions that the IRS will be notified that you are living abroad.

The signature page part states: “I am a citizen or non-citizen national of the United States and have not, since acquiring U.S. citizenship or nationality, performed any of the acts listed under “Acts or Conditions” on page four of the instructions of this application (unless explanatory statement is attached).”

Under other Acts or Conditions it says: ” I have not, since acquiring United States citizenship/nationality, been naturalized as a citizen of a foreign state; taken an oath or made an affirmation or other formal declaration of allegiance to a foreign state; entered or served in the armed forces of a foreign state; accepted or performed the duties of any office, post, or employment under the government of a foreign state or political subdivision thereof…”

Also under Federal Tax Law disclosures the U.S. Department of State must provide your Social Security Number (SSN) and foreign residence information to the U.S. Department of Treasury.

If you have questions about the content in this blog or other legal questions on your mind, you can leave a comment and I will get back to you.