In recent years Americans living outside the United States have increasingly encountered problems opening and maintaining financial accounts both inside and outside the United States. These problems have related both to access to the payments systems and to the ability to open and manage savings vehicles.
The source of these problems has almost always been legislation or regulatory measures which are new or have recently been reinforced and add to regulatory burdens or legal risks for financial institutions. This leads them to discriminate against “US persons” or some subgroup(s) of them, notably those living outside the United States, to minimize costs and risks.
The Banking Committee has been created to work to mitigate these problems by focusing on both advocacy and, without endorsing any identifiable financial institutions, such practical support as we can provide.
Members of the Association of Americans Resident Overseas are U.S. citizens who reside throughout the world. The cross-border flow of capital, goods and people under the laws of the United States and the jurisdictions where we reside, as well as under the rules of bilateral and multilateral agreements, is of crucial importance to our members.
With a new U.S. government in 2017 certain to re-evaluate U.S. participation in multilateral agreements and agencies, the future of U.S. participation in the Asian Development Bank, Asia-Pacific Economic Cooperation forum, the proposed Trans Pacific Partnership, the proposed Transatlantic Trade and Investment Partnership, and the World Trade Organization demand the utmost vigilance by overseas Americans.
AARO monitors cross-border business facilitation issues that impact our worldwide members who are executives and employees of American and multinational companies, as well as overseas-based American citizen entrepreneurs. AARO maintains an ongoing dialogue with U.S. government agencies and personnel with regard to business facilitation issues.
Together with other relevant stakeholders in and outside the United States such as trade associations, chambers of commerce and American citizen social organizations throughout the world, AARO is a leader in seeking positive reform when needed.
The Americans Abroad Caucus is a group of legislators (currently only in the House of Representatives) who, by joining, show they understand and care about their overseas constituents. They value the contribution to their district of these internationally-based citizens and understand the importance to their district of overseas markets.
AARO salutes these Members of Congress and will continue to work with them to bring the concerns of America’s global population to the attention of the U.S. Congress.
AARO also supports all their initiatives to improve the lives of Americans abroad, particularly in the areas of citizenship, voting and equitable taxation.
When AARO was founded, children born abroad of an American parent married to a foreigner were denied U.S. citizenship because of unfulfilled residency requirements. Young adults lost their U.S. citizenship because of similar residency requirements. Americans who acquired another nationality were being stripped of their U.S. citizenship.
AARO has advocated successfully over the years to change these citizenship laws, eliminating the last two (in 1978 and 1991), reducing residency requirements for transmitting citizenship to children born abroad (in 1986 and further in 1994) and facilitating citizenship for minor children whose parents cannot satisfy the reduced residency requirement (in 1994 and 2001).
Today, AARO works to protect these gains in citizenship whenever legislation to weaken them is proposed in Congress, to inform Americans abroad about citizenship and visa regulations, and to help members with their own or their children's citizenship issues.
The enactment of the Foreign Account Tax Compliance Act (FATCA) in 2010, has had a significant impact on the ability of Americans living outside the United States to open and maintain financial accounts. It has increased the burdens on reporting of financial assets held outside the United States, including those located in the jurisdiction of residence of the US citizen.
AARO is committed to bringing the real challenges of Americans living overseas to the attention of our governmental representatives. AARO advocates for simplifications to FATCA reporting that do not detract from the law’s stated goals, such as exempting financial accounts in the country of residence of the taxpayer from FATCA reporting requirements. Together with our banking committee, we work to address the challenges created by FATCA for Americans living overseas and to propose and promote more fair laws and policies.
AARO members from around the globe share stories and perspectives, from economic analysis to human interest. Their reports tell us about the unique challenges they face and the inventive solutions they find their host countries.
We welcome contributions from members everywhere! If you would like to share a story, a lesson learned, an obstacle overcome or a new challenge on the horizon, please use this form to contact us.
We are also interested in articles that appear (preferably in English) in your local press giving more information or new perspectives on issues that AARO is following closely. Feel free to send us links to such articles and, where possible, we will post them for others to read.
Meet AARO volunteers, board members, issue experts and members in distant countries. Here, we will regularly post profiles of the people you might not otherwise meet but on whom AARO depends to fulfil its mission!
They say "it takes a village".... AARO is a global village, then, and here are a few of its faces…
Americans who reside abroad may have complex relationships with the two major US “entitlement” programs, Social Security retirement benefits and Medicare.
An employment history in the US and one or more other countries may create eligibility for pensions in one or more of these countries. This is complicated by the fact that only a couple dozen countries have bilateral agreements with the US that may permit reciprocal recognition of employment in both countries to decide whether a pension has been earned.
The US pensions also provide for spouse, dependent and survivor benefits, but these vary according to the citizenship and/or US residence periods of non-American family members.
The taxation, or not, of US pension income may depend upon bilateral agreements as well.
US Social Security pension amounts reflect average lifetime US earnings and are calculated without knowing the existence of the foreign earnings. Since the pension amounts are not a fixed percentage of these earnings, but instead are progressive, US law currently requires a reduction in the US pension (the Windfall Elimination Provision) to offset this computation anomaly.
With rare and precise exceptions, Medicare provides no health coverage outside the US, but anybody with 10 years of contributions to Medicare may receive Part A (hospital costs, excluding doctors) while in the US, without premium charges. Part B can be purchased, but enrolling after age 65 incurs a permanent 10% penalty per year of delay except in some cases of accepted employment-related coverage abroad.
AARO's mission is to inform members of the conditions for accessing Social Security and Medicare and to lobby for appropriate changes to that access for Americans living abroad or who return to the US.
Due to the combination of citizenship-based taxation and complex United States tax rules applicable to non-US assets and income, Americans living outside the United States face particular tax burdens and compliance costs.
The mission of the AARO tax committee is to (1) remain current on tax matters of concern to Americans living abroad, (2) present information on topics of relevance to the community of Americans living abroad through our publications and conferences throughout the year, and (3) actively pursue redressing inequalities before our governmental representatives by raising awareness of laws and legislation which disproportionately burden Americans abroad and proposing and promoting more favorable laws and policies.
When AARO was founded in 1973, Americans living abroad without a residence in the United States did not have the right to vote in US elections.
In 1975, two members of the AARO board, Phyllis Michaux and Sonja Minçbère, thought up what would become the “teabag campaign”, which was ultimately picked up by scores of American organizations around the world.
In response to the floods of teabags being sent to Washington with a cover letter urging support for two bills, Congress passed the needed legislation and on January 2, 1976, President Ford signed the law giving overseas Americans the right to vote.
Since then, AARO has worked with its partner organizations and with Congress to improve voting legislation and expand voting rights for the overseas community.
Today, thanks to sophisticated technology, it is easier than ever for overseas voters to exercise their rights, but organizations like AARO have to – and do - remain watchful. The Federal Voting Assistance Program has estimated that overseas citizens represent over 3% of the total vote, and we all know that elections can be won by far less than that!