I’m one of those people who has gone through most of my life believing that people who are paranoid about the US government are nut jobs. Like most people (I think) I was always under the impression that if you kept your nose clean and behaved like a good citizen the government was too busy to get involved in your affairs.

Since I moved overseas I am beginning to seriously question my past assumptions about the benevolence of the US government. I’m not quite to the point that I think black helicopters are following me around or that there is any sort of Illuminati meetings going on at the White House but when I see things like this video it really crystallizes the fact that the US government can use the blanket of national security to wipe out most of the rights guaranteed under the Constitution.

As you can see/hear in this video Steve Bierfeldt was detained by TSA officials in St. Louis for the crime of having $4700 in cash on him. Of course carrying $4700 in cash isn’t a crime so one has to wonder why he was detained by TSA and why he was threatened with being turned over to DEA and the FBI because he refused to answer why he had the money.

At one point one of the TSA officials makes a comment about only walking around with $50 on him and wonders why Bierfeldt has $4700. I don’t think I’ve ever taken less than $300 out of the ATM so I guess I’m suspicious too. Last year I spent some time traveling and took £2000 cash with me which was at the time worth about $4000 US.  I guess I’m lucky because part of my travels were through the US en route to Asia.  Talk about suspicious, large amounts of money, money with funny pictures on it, and off to foreign lands.  I’m lucky I’m still not sitting in a DEA or FBI office trying to explain my actions.

Really though, is it suspicious to be carrying around $4700 in cash?  He could have just sold a car.  He could be on his way to buy a car.  He could be on his way to Vegas.  Maybe he’s like me and is off on an extended holiday to someplace where access to cash is difficult to get at.

Ultimately what made him suspicious was the fact that he refused to be intimidated into willingly giving up his rights under the law.  The same law that the TSA officials are supposed to be upholding.

When I see things like this it concerns me that in our zealousness to catch the bad guys we end up creating a system that ensnares the innocent and anybody who stands up for their rights is seen as the enemy of the law.

Expatriates know about this all too well.  If you are a US citizen and you hold bank accounts outside of the US you are required to report them to the US government if they have a combined total (at any time) of over $10,000.  You don’t just have to report that you own the accounts, you must also name the financial institutions, your account numbers, and the highest balance your accounts held in that year.  Failure to report your overseas bank accounts can result in fines and prison time.

While the idea was to catch tax dodgers, terrorists, and money launderers, in effect it impacts more law abiding citizens living overseas than it does criminals.    But again, we see how the zealousness of the government to catch the bad guys tramples the right of privacy for the average citizen.

Though my overseas account is perfectly legitimate and all money going into that account is reported to the IRS as revenue earned abroad, I – and every other expat with a foreign bank account – am forced to open my kimono to the US government because I *might* be doing something illegal.  Gone is any expectation of privacy in my financial affairs because the government wants to make sure that if need be they can reach out and globally freeze my assets.

A few years ago, I along with most other Americans, would have scoffed at the suggestion that the US financial system could completely crash into ruins but recent events have shown us just how fragile the system is.  So these days, yes, I am a little more worried about what lengths the government might go to if push came to shove.  It concerns me greatly simply by asking that the government abide by the rules in that little document called the Constitution that I may be labeled suspicious which seems to be the only criteria necessary for them to strip you of your rights.

I’m not paranoid enough (yet) to think that America will completely unravel but when carrying around $4700 makes you too suspicious to fly on an aircraft it makes me begin to wonder how far down this path we’ll allow ourselves to go before things really start to get bad.

photo by bejealousofme

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Carrying Cash is a Crime

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1. Switzerland, Others Cave to Banking Secrecy Pressure Switzerland has become the latest country to relax strict...

When I moved out of the US several years ago one of the most useful things I brought with me was my Vonage box. It allows me to keep a local phone number back in the US and my friends, family, and business contacts can call me like they’re calling me back in the states. No long distance charges when they call me and all my calls back to the US are included in my monthly fee.

Yes, you read that correctly. People calling me dial a phone number that is no different than your typical US phone number (e.g. 310 555-1212, 212 555-1212) and neither of us pays any long distance fees. Better yet, I can be in a hotel room in China and call someone back in the US and it costs me nothing more than my standard monthly fee.

This is all possible due to a technology called Voice Over IP or VoIP. What this means is that instead of using standard phone lines to get your phone call from Point A to Point B they use the internet.

Let’s say you want to call me while I’m sunning myself in a villa on the southern coast of Spain. You pick up your phone and you dial the number I’ve had for over a decade now and your phone company directs the phone call to a local Vonage call exchange. Vonage then sends your call over the internet to me and I hear my phone ring. Reluctantly, I set down my cocktail and walk inside the house and answer the phone.

When I pick up my phone, you say “hello” and we chat. Whenever you say something it goes through the phone lines until it gets to Vonage’s call exchange and then they push it out over the internet to me. When I speak my voice gets digitized and sent to Vonage who passes it back to the phone company who sends it through the phone lines to you.  Unless I have a poor internet connection or I happen to downloading several huge files on my computer there is nothing that might indicate that I am not sitting in my home in the US.

One huge benefit of this is that I have several credit card accounts back in the US.  I have a drop mail address that my bills and replacements for expired credit cards are sent to.  At the drop mail they collect up everything and ship it to me overseas.  The only hassle with that is that when you get the replacement credit cards you have to activate them.  Pretty tricky to do from overseas.  But with Vonage it all goes smoothly and I have yet to have a problem activating my credit cards.

Even if you don’t live overseas Vonage can be very useful. When I moved from the 310 area code to the 714 area code back in California I simply kept my 310 phone number. For things like pizza deliveries and such where they might get suspicious of an out of area number I gave my mobile number.

For someone living the Emergency Lifestyle the benefits of a service like this should be rather obvious. Unlike Skype or other services Vonage doesn’t rely on someone having a specific piece of software installed on their system or paying usage fees. In fact, nobody even needs to know where you are. They dial a US phone number and you answer the phone. It’s that simple. And the Emergency Lifestyler likes simple.

This Vonage box I’ve mentioned is about the size of four CD cases stacked on top of each other so it’s convenient to travel with. You plug your internet connection into one slot and any regular phone line into the other and you’re ready to go.

In fact, that does bring up the biggest downside to a Vonage solution; it relies on a regular physical phone. If you’re off to Costa Rica for a week you can pack the compact Vonage box in your luggage pretty easily but you also need to either bring a regular phone with you or buy one at your destination. Personally, I’ve made the decision on a trip by trip basis.

Technically, you can get by without all of the hardware because Vonage offers a USB drive you can slap into your computer but then it becomes roughly the same as Skype and other webcam/chat sort of chat services other than the fixed phone number.

I haven’t purchased or used the USB drive so I really can’t speak too much about that.

So far we’ve talked about how it works but what exactly does Vonage offer?

As I mentioned you can have a US phone number which certainly comes in handy for a variety of reasons.

The plan that I’m on is $24.95 a month. This is in addition to any DSL or cable modem charges your ISP might charge. For $24.95 I get unlimited local and long distance calls anywhere in the US, Canada, Puerto Rico, and unlimited phone calls to land lines in Italy, France, Spain, UK and Ireland. Keep in mind though that if you have a 310 area code number and someone calls you from NYC they still pay the same long distance rate regardless of whether or not you have Vonage. Their phone company is charging them for getting the phone call to the nearest Vonage exchange center.

Because I do business in Asia I added an unlimited calling plan for Asia for $10 a month and I can call 17 different countries in Asia for no extra fee. Of course, they still pay the long distance charges to call me but I can call them for nothing more than the extra $10 a month service fee.

I should note though that for calls to mobile phones outside of the US you do end up paying regular long distance call fees. But with rates as low as .01 a minute you’re probably still better off than your local long distance service.

One of the more interesting and also confusing features that Vonage offers is the virtual phone number. If I have a 310 phone number in the US and someone from New York calls me they pay long distance fees. However, for about $10 a month I can add a 212 area code phone number as a virtual phone number to my account and then it would be a local call for people calling me.

They call it virtual because you don’t actually have two phone numbers connected to two different phones. You have your primary phone number that is usually your day-to-day phone number but then this virtual phone number will ring straight to your normal phone like they were the same line.

You can also get international numbers. You can get a virtual phone number in the UK, Mexico, Canada, France, Ireland, Italy, or Spain for a nominal monthly charge (most are less than $10 a month).

What that means is that even though I’ve kept my US number I can also get a phone number in the UK (or any of the other previously mentioned countries). If a business partner in the UK wants to call me and I’m off in Australia he dials the UK number paying no extra fees.

And as if cheap calls weren’t enough of a reason, Vonage offers an array of advanced features that come standard with the service.

For instance, voice mail comes standard. But not just regular voice mail. You can actually go on their website and download your voicemail messages. So if you decide to leave the Vonage box at home when you go on holiday you can still log in and check your voice mail messages over the internet.

Vonage also offers services like call forwarding. So, if you decide to leave the Vonage box at home but you still want to take your calls while you sit on a beach in Goa you can have all of your calls forwarded to your mobile. Obviously you’ll need to pay all of the forwarding costs your mobile operator charges or for calls not included in your plan but I think you get the idea.

But what if, like me, you get phone calls at obscene hours? You can put your Vonage service on hold during certain hours. If people try to call they won’t get through which means you can enjoy your nights and naptimes even if you are dealing with people multiple timezones ahead or behind you.

The bottom line is that this is a great service for a lot of Emergency Lifestylers. I’ve been a customer of Vonage since 2004. I used it in the US for several years before taking it with me when I went to live overseas. Sure it has its annoyances from time to time but no more than you would expect from any phone company.

And in return for my loyalty, I’ve received innumerable benefits. Be it convenience because my family can ring me whenever they feel like chatting or business deals I didn’t miss because my customer felt like he was calling someone down the street.

If you love the travel lifestyle and always want to stay in touch with what’s going on back home Vonage is a great solution.

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Vonage

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One of the first questions that comes up when people begin to consider dual citizenship is whether or not they risk losing their U.S. citizenship.  It’s a good question because if it is not your intent to relinquish your U.S. citizenship when you acquire citizenship of another nation you certainly don’t want to be surprised one day and have your U.S. passport and citizenship revoked.

Dual citizenship often carries with it a lot of stigma.  Americans are especially patriotic people and someone who is a U.S. citizen who seeks citizenship from a foreign country can be seen by some to be unpatriotic, untrustworthy, and even un-American.

In fact, holding a foreign passport disqualifies one from holding a security clearance in the U.S.  Though, interestingly, being a dual citizen does not.

Because of these reasons, as well as others, dual citizenship can seem mysterious and as is often the case when people don’t understand something they tend to pass along rumors and urban legends rather than facts.

Another reason misinformation abounds surrounding dual citizenship is that in order for a someone to become a naturalized U.S citizen they must take an oath renouncing their previous citizenship.  However, if one is born a U.S. citizen they do not need to become naturalized and thus never take such an oath.  So even some well meaning immigration attorneys who deal with immigration law for people becoming naturalized U.S. citizens have been known to muddy the waters by giving out incorrect information on the issue of dual citizenship.

This hasn’t been helped by the fact that before the internet age it was often very difficult to find information about dual citizenship.  Even today, the US State Department says that U.S. law does not mention dual citizenship which many people falsely assume means it is not allowed.

The fact of the matter is that it is not illegal for a U.S. citizen to hold dual citizenship.  In fact, a U.S. citizen can even hold a passport issued by each country s/he is a citizen of though they may be asked to surrender their foreign passport in order to obtain a security clearance as mentioned above.

Probably one of the more notable examples of a dual citizen is actor and current California governor, Arnold Schwarzenegger who holds both U.S. citizenship as well as his original Austrian citizenship.

On the U.S. State Department website it states:

A U.S. citizen may acquire foreign citizenship by marriage, or a person naturalized as a U.S. citizen may not lose the citizenship of the country of birth.  U.S. law does not mention dual nationality or require a person to choose one citizenship or another. Also, a person who is automatically granted another citizenship does not risk losing U.S. citizenship. However, a person who acquires a foreign citizenship by applying for it may lose U.S. citizenship. In order to lose U.S. citizenship, the law requires that the person must apply for the foreign citizenship voluntarily, by free choice, and with the intention to give up U.S. citizenship.

If that last sentence scares you please note the importance of the word “and” when it says “and with the intention to give up U.S. citizenship.”

So what does it mean to have the intention to give up U.S. citizenship?  Again, the US State Department provides some guidance:

The Department has a uniform administrative standard of evidence based on the premise that U.S. citizens intend to retain United States citizenship when they obtain naturalization in a foreign state, subscribe to a declaration of allegiance to a foreign state, serve in the armed forces of a foreign state not engaged in hostilities with the United States, or accept non-policy level employment with a foreign government.

So, the default position of the U.S. government is that even if you do any of the above things that could jeopardize your citizenship status that you did not have intent to give up your U.S citizenship.  In fact, they go on to say:

When, as the result of an individual’s inquiry or an individual’s application for registration or a passport it comes to the attention of a U.S. consular officer that a U.S. citizen has performed an act made potentially expatriating by Sections 349(a)(1), 349(a)(2), 349(a)(3) or 349(a)(4) as described above, the consular officer will simply ask the applicant if there was intent to relinquish U.S. citizenship when performing the act. If the answer is no, the consular officer will certify that it was not the person’s intent to relinquish U.S. citizenship and, consequently, find that the person has retained U.S. citizenship.

Essentially, if you obtain dual citizenship, take an oath of allegiance to a foreign state, serve in a foreign army that is not hostile with the U.S., or accept a non-policy level government job with a foreign state you may be asked if it was your intent to give up your U.S. citizenship.  If you say that it wasn’t your intent, you will retain your U.S. citizenship.

In fact, especially if you were born a U.S. citizen, it is particularly difficult to lose citizenship.  The State Department lists the reasons a U.S. citizen might lose their citizenship.  A person may lose their U.S. citizenship if that person:

1. formally renounces U.S. citizenship before a consular officer;
2. serves in the armed forces of a foreign state engaged in hostilities with the United States;
3. takes a policy level position in a foreign state;
4. is convicted of treason; or
5. performs an act made potentially expatriating by statute accompanied by conduct which is so inconsistent with retention of U.S. citizenship that it compels a conclusion that the individual intended to relinquish U.S. citizenship. (Such cases are very rare.)

Items 2 – 5 probably apply to very few people and it seems unlikely that a person who committed actions where 2 – 5 would apply would much care about their U.S. citizenship anyway unless it were to obtain some legal loophole.

On the other hand, renouncing one’s U.S. citizenship could be done for a variety of reasons.  Fortunately or unfortunately, depending on how you look at it, renouncing your U.S. citizenship isn’t that easy to renounce.

We won’t go into detail here but you can read about renouncing your U.S. citizenship here.  We’ll leave it by saying that you can actually have your renunciation of U.S. citizenship declined.

There are no actual figures kept on the number of Americans holding dual citizenship but some sources indicate that as many as 40 million Americans may be eligible for EU citizenship alone.  And many are taking advantage of their eligibility and obtaining dual citizenship.

Since it is not illegal, and if you are able to obtain citizenship in a desirable country dual citizenship can open up many doors that may be otherwise closed to you.

Disclaimer:  The author of this article is not a lawyer nor is he offering specific legal advice.  He is merely conferring – to the best of his understanding – what is his understanding of the laws pertaining to dual citizenship.  This article should not be relied on as legal advice and anyone thinking of any sort of change in their citizenship status should consult with an appropriately qualified attorney.

Furthermore, obtaining dual citizenship does not release you from any duties as an American citizen which includes – but is not limited to – paying taxes not only on monies earned in the United States but also paying U.S. taxes on monies earned overseas.

Also of note is the fact that this article only deals with the legality of dual citizenship under U.S. law.  It may be illegal to hold dual citizenship in the country one is seeking citizenship in.  Foreign countries may also have mandatory military and other requirements that must be fulfilled under that country’s citizenship laws.  One should consult with an attorney familiar with the rights and duties of citizens of that country before seeking citizenship.

Photo credit:  Fikra

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Warning: Is Dual Citizenship Legal for U.S. Citizens?

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Switzerland has become the latest country to relax strict banking secrecy laws in an effort to appease tax collectors in the US and several other countries.  Many smaller countries have already caved into international pressure due to the economic pressure than can be applied to a small nation such as the Cayman Islands that relies heavily on US activity.  However, countries like Switzerland and Singapore had always been viewed as too large to bully until recently.

With many countries taking huge economic hits due to the financial meltdown they are now especially keen on making sure their citizens aren’t hiding any monies owed to them.

The main concession for Switzerland seems to be relaxing the distinction that they had previously made between tax fraud which is considered a crime in Switzerland and tax evasion which is merely a civil offense.  In theory, one could still hold a numbered Swiss bank account and hide its existance from US and other governments but it would be much easier for those governments to get orders to freeze or seize those accounts should the accounts be deemed to held by someone who was wanted for either tax evasion or tax fraud.

In the US, citizens are supposed to declare any foreign banking account with assets over $10,000.  This has long been seen by many citizens with foreign interests as too invasive.  The question that has always been posed is why the government needs to know about where you hold your funds and how much you’re holding if you have niether been accused of nor convicted of any sort of crime.

Since the disclosure is somewhat voluntary in that – in theory – if a US citizen never declared a foreign bank account it would be extremely difficult to know the location of the funds, many US citizens have chosen to take advantage of Switzerland’s banking secrecy laws in order to hold foreign bank accounts without reporting them to the US government.

Swiss banks became very popular with Americans who used Switzerland’s banking secrecy laws to hide thier ownership of foreign held accounts.  Even if the holder had no intent of cheating the government the accounts were attractive for wealthy individuals looking to shelter some of their assets from any sort of civil court awards.

Now that Swiss banks can be forced to open up their books the risk has gone up for US citizens holding undeclared foreign bank accounts.  Firstly, the account holders would be in violation of the reporting requirements so they either must now come clean or continue to violate US law.  But secondly, now that the accounts have to be declared that information could be used in civil cases in order to target assets for seizure.

Perhaps it’s time for US citizens to question their government as to why the government needs to know where their citizens keep their money and how much of it they have if those monies have been obtained in completely legal ways and taxes have been rendered.  If the goal of such measures is to prevent tax evasion and money laundering then there simply have to be less invasive ways of enforcement.  These laws end up catching the wrong people in their net.  A drug dealer who is avoiding taxes in the US certainly isn’t going to tell the government how much money he has held in foreign bank accounts and where those accounts are located which effectively deems the law as ineffective in accomplishing its stated purpose.  Instead, the law unduly violates the privacy rights of individuals who either have a need to keep funds overseas or have chosen to do so as part of an asset protection plan.

photo credit: zzzack

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Switzerland, Others Cave to Banking Secrecy Pressure

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