At Opinio Juris, Peter Spiro asks: Are Sole Executive Agreements Next on the Roberts Court Chopping Block? As he explains, there is a developing constitutional challenge to the executive agreements associated with FACTA — the Foreign Account Tax Compliance Act, which imposes significant burdens on American citizens living abroad. For more on the issue, he points to this article by Allison Christians (McGill): The Dubious Legal Pedigree of IGAs (and Why it Matters) (Tax Notes International, Vol. 69, No. 6, 2013). Here is the abstract of Professor Christians' article:
When Congress enacted the Foreign Account Tax Compliance Act in 2010, it made no mention of any internationally-agreed alternative to its enforcement, and Congress has made no authorization since then for the president to override FATCA’s statutory provisions by international agreement. Yet due to difficulties in implementing FATCA, Treasury has entered into several ‘‘intergovernmental’’ agreements (IGAs) to essentially bypass the hurdles, even going so far as to draft model IGAs with the intent of streamlining their enactment globally. This column examines the nature of these agreements and concludes that their legal pedigree is tenuous as a constitutional matter. It argues that this pedigree implicates the rule of law in two ways: first, if the IGAs are not "good" law in the U.S., then FATCA partners incur the risk of penalties should the statute they seek to override apply in default. Second, and more fundamentally, the IGAs violate the rule of law by ignoring established procedural requirements for binding the US internationally. This undermines the legal system in the US domestically as well as hurting U.S. credibility in the international community. The column concludes by arguing that there is no benefit to be had in skirting the normal legal process for concluding international agreements in the rush to implement FATCA. Instead of jeopardizing the important and complex project of global tax compliance with such a legally dubious procedure, the obvious and straightforward approach to making FATCA work internationally is to follow the normal treaty-making procedure, time-tested through 100 years of US tax treaty-making history.
Professor Spiro concludes:
There is a lot of history behind sole executive agreements but not much judicial precedent. Executive agreements have figured importantly in the Obama Administration’s muscular exercise of executive branch power (see this essay from then-Legal Adviser Harold Koh in defense). Could this be another platform for the Supreme Court to advance its formalist turn in foreign relations law?
Well, of course I hope so. See 77 North Carolina L. Rev. 133.
Posted at 6:02 AM