WASHINGTON (Sputnik) – The Foreign Account Tax Compliance Act (FATCA) violates privacy rights of US citizens as well as has a bad effect on the American economy, Senator Rand Paul said in a statement.
“FATCA is in complete violation of every Americans' constitutional right to privacy and adds burdensome regulations that negatively impact our economy,” Paul, the likely presidential candidate, stated on Wednesday.
“It is a defective law which disregards the mutual respect of sovereignty among nations and drains money from the federal treasury, on top of discouraging overseas investment in the United States,” the lawmaker explained.
Paul reintroduced a bill on Wednesday to repeal anti-privacy provisions of the FATCA. The bill was initially introduced by the senator in 2013.
"My bill will reverse the negative aspects FATCA has on the economy, prevent the government from bulk collecting US citizen's financial data, and preserve the constitutional rights for all Americans," Paul said.
Foreign banks are due to begin transferring annual reports to the US IRS in March 2015.
Failure to comply with FATCA could result in the bank in question being levied with higher commission for payments processed via correspondent accounts in US banks. If the bank fails to comply, the US will impose a 30 percent withholding tax on all its transactions concerning US securities.
Experts raised concerns that the FATCA is a significant factor that catalyzes the process of more and more Americans to renounce their citizenship. According to the Treasury Department, around 3,415 Americans renounced their citizenship in 2014, up from 2,999 in 2013.