Belgium has again been ordered to stop sharing the data of so-called "accidental Americans" with the US tax authorities under the intergovernmental FATCA agreement, after a previous ruling was overturned last year.
The Belgian Data Protection Authority (DPA) declared on 24 April that there is a "lack of a legal basis" for the information transfers.
"Therefore, this decision prohibits Belgium's Finance Department from transferring personal data to the US tax authorities (IRS) under the FATCA agreement," Fabien Lehagre, President of the Association of Accidental Americans (AAA), told The Brussels Times in a statement.
Under the US Foreign Account Tax Compliance Act (FATCA) anti-tax evasion measure, financial institutions all over the world must transmit the financial account data of all their customers identified as US citizens to the country's authorities.
This includes the data of "accidental Americans" – those who acquired American nationality because they were born in the United States but have no other ties to the country. However, as the US tax system is based on citizenship rather than residency, they must still pay American taxes.
Breaking its own law
Belgium was among the countries that previously signed an intergovernmental agreement with the United States to implement FATCA. In practice, this meant that Belgian tax authorities essentially acted as an intermediary for relaying the information from banks to the US tax authority.
"The basic problem is that EU Member States – including Belgium – breach their own laws to comply with US law," Lehagre said before.
In May 2023, the Belgian Data Protection Authority (DPA) already made a public decision declaring that FATCA data transfers were "unlawful" due to their incompatibility with the General Data Protection Regulation (GDPR).
At the time, the DPA's main reason for prohibiting the data sharing was its "disproportionate character," as the FATCA required information transfers of nearly all Belgian-Americans – most of whom "do not pose any risk" in terms of tax avoidance or tax evasion.
'Accidental Americans' have American citizenship but no real ties to the US. Credit: Belga / David Stockman
However, the Belgian Government appealed this decision. In December that year, the Court of Markets overturned the DPA's decision, finding that certain elements had not been properly considered. "Specifically, the court referred the case back to the DPA for further review, which led to today's decision reaffirming that the data transfers are indeed incompatible with the GDPR," said Lehagre.
With this new 96-page decision, the DPA confirms that these transfers violate the GDPR, citing "lack of legal basis, failure to inform, absence of an impact assessment, and lack of reciprocity."
Additionally, this decision comes at a time when recent developments in the US confirm "a concerning drift": an agreement signed in early April between the country's IRS and the Department of Homeland Security now allows the use of tax data "for immigration and criminal purposes." This violates the principle of purpose limitation.
"Even more troubling, the IRS declared before a federal court that it has an 'absolute right to fish for information,' even in contradiction with the laws of foreign states," the AAA said. "These developments highlight a direct challenge to European data protection rights."
Political timetable
While welcoming the DPA's decision, Lehagre regrets that the data protection watchdog has given the Belgian Finance Department a one-year deadline to comply with the decision.
As a result, transfers in July 2025 may still take place, despite their recognised illegality. "Data protection cannot accommodate a political or administrative timetable. Transfers must cease immediately," he said.
The AAA calls on France and all EU Member States to immediately suspend the application of FATCA, in compliance with European law.
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