Photograph by Brian Cahn/ZUMA Press, Inc. / Alamy
Published August 22, 2013
Ted Cruz: Canadian-American. After the Dallas Morning News outed the Texas senator and Tea Party stalwart's dual citizenship (he was born in Calgary, Alberta), Cruz announced late Monday night that he would give up his Canadian citizenship.
While he said he has "nothing against Canada" and does not have a Canadian passport, he felt that as "an American by birth and a U.S. Senator" he "should only be an American."
But how does one go about renouncing citizenship? It's not as easy as burning your old passport. Practices vary from country to country, with some examples below.
Canadian regulations afford Senator Cruz a comparatively easy renunciation road. The first step, ticking off six boxes on the list of eligibility criteria, promises to be relatively straightforward. This will include demonstrating that he or she is over 18, that he does not reside in Canada, that he presents no security threat to the country, and that he understands the full significance of the action. An applicant must also prove that he or she will not be left "stateless"—lacking citizenship in any other country.
Having met the criteria, Cruz then merely has to fill out an online application and pay a nonrefundable fee of $100, the processing time for which can vary from three months to a year. Since Canada does not levy taxes on income earned overseas Cruz will not face any tax bill, as he would if he were giving up his U.S. citizenship.
Cruz will then join a very small group: Last year only 192 people applied to renounce their Canadian citizenship, compared with 1,130 in the U.S. for the second quarter of 2013 alone.
Citizenship renunciation has had a complex history in the U.S. Prior to the late 19th century, most countries considered a person's birth citizenship to be permanent and immutable under the doctrine of perpetual allegiance.
This proved nettlesome for early British immigrants who, by virtue of their British birth, were sometimes pressed into service by the Royal Navy despite holding U.S. citizenship and having immigrated to America years, or even decades, earlier. The practice of impressment was so controversial as to have played a significant role in causing the War of 1812 between the U.S. and Britain.
Nor was the practice confined to Britain alone. Germany, Sweden, and other countries also frequently drafted into their militaries U.S. citizens visiting their homeland.
In 1868, Congress passed the Expatriation Act, which specifically allowed for citizens to renounce the citizenship of the country from which they emigrated. But since the U.S. had no control over other national policies, it also sought out foreign agreements that harmonized naturalization laws—what became known as the Bancroft Treaties.
Today American citizens opting to renounce their citizenship do so primarily for tax reasons, according to Freddi Weintraub, an immigration lawyer with Fragomen, a New York law firm.
The U.S. is the only country in the world that taxes all income by its citizens earned overseas above $100,000. In 2012, Facebook co-founder Eduardo Saverin renounced his U.S. citizenship and became a citizen of Singapore, whose tax rules are substantially lighter by comparison.
But the renunciation process is not without headaches, says Weintraub. You must first go to a consulate or embassy overseas and announce your intentions. Then "there are a bunch of affidavits that you have to complete," she says, "because they have to make sure that you are of a sound mind, and that you understand the ramifications of what you've done."
A consular officer then conducts an exit interview and has the individual sign an oath of renunciation. And depending on a person's income and wealth, exit taxes may be accessed.
In the Soviet era, renunciation wasn't even an option for most citizens. Emigration was restricted except in extraordinary circumstances. When the Soviet Union finally allowed certain groups—such as ethnically Jewish citizens—to emigrate in the late 1970s, those moving to Israel were forced to hand over their Soviet passports at the border.
The current procedure is more flexible, if beset by bureaucracy. As with Canada, proof of alternative citizenship is necessary. But in Russia's case, the bureaucratic hoop jumping has just begun.
Nationals living abroad are first required to have an up-to-date Russian passport—which would have been a problem for someone in Senator Cruz's situation, since it takes months and a fat stack of paperwork to obtain one. You also need a translated and notarized copy of the other country's passport. Plus official proof that you owe no taxes to the Russian government, which is not so easy to get unless you live in Russia.
A fee is assessed. All documents are submitted in person. And only then does the six-month processing begin.
Like Canada and Russia, France only allows its citizens to renounce their citizenship if they first demonstrate alternative citizenship. They must also prove a "lack of family and professional ties in France," according to the French Ministry of Foreign Affairs.
In December 2012, French actor Gerard Depardieu renounced his French citizenship in a dispute over tax increases on the wealthy instituted by the new president, Francois Hollande. Facing an effective tax rate of approximately 85 percent in France, Depardieu first moved across the border to neighboring Belgium, where the tax rate stands at 60 percent.
Then in a strange twist, Russian President Vladimir Putin handed Depardieu a Russian passport, which the actor happily accepted. Now facing an income tax rate of only 13 percent, Depardieu is registered as a resident of Saransk, a small town in the Russian province of Mordovia, about 400 miles east of Moscow, and has plans to star in a Russian film set in Chechnya.
In contrast to the countries above, Japan does not allow dual citizenship.
Along with its neighbor Korea, Japan automatically revokes a person's Japanese citizenship once he or she is naturalized in another country. Minors under the age of 21 are allowed to hold two passports, but upon coming of age, they must renounce the second passport or forfeit their Japanese citizenship.
Though it was formerly quite common, actively barring dual citizenship has all but disappeared over the last several decades. Even Germany, previously a staunch adherent to the policy, has relaxed the restriction in recent years and now allows exemptions to be considered.
If I had the wealth I would depart the sinking ship USA where class warfare is creating a two-tiered society that I fear only a military coup or a full-scale Revolutionary War Two can wrench the power away from a small elite class and their many lackey politicians and bureaucrats along with the monolithic corporate entities that We, the People must serve rather than those entities serving We, the People.
A day of reckoning is coming but I fear it will be long after I am dead.
I hope the masses, the good guys, defeat tyranny, evil and greed that has usurped what the Founders created.
And that class war has had very detrimental effects upon the society us 300-million-plus common folks must exist within.
Ted Cruz IS NOT an natural born US Citizen. He was born in Canada, he is not eligible to run for the President of the US.
Since the US does not recognize dual citizenship it is completely meaningless, from the US perspective, whether anyone renounces their citizenship to another country or not.
I am fortunate to have dual citizenship as a result of working hard to live in New Zealand, the best place on the planet for me at this point in my life. I have no desire to renounce my U.S. citizenship, so the issue is not a question for me. However, it seems that one rips out part of one's soul to say, "I no longer want to identify with people from the land of my birth." It must be a very difficult act to complete, even if a monetary advantage exists to do so. "I did something for money once, and I swore I'd never do it again", said Brad Pitt's character in the movie "Money Ball". Giving up your citizenship for money is a fool's errand.
Oh, and another problem, most foreign banks will not bank an American because of FACATA. It would just cost them too much to deal with the reporting requirements to be worth taking your money. Your banking options will be very limited and cost 1000-2000 a year in fees.
This is why many Americans who already had their foreign citizenship have renounced recently.
Good luck surviving in a modern economy without a bank account.
http://llltexas.com <- my blog
The hardest part of renouncing a citizenship is first finding a country that will give you a different citizenship. This is not as easy as it seems for an American without a money horde or ultra-rare and expensive skills.
Bluntly, you need a bucket load of cash or expensive training in rare skills (plus work experience in that field, good luck with that in the current economy) to legally immigrate to most places in the world where you won't be shot for being white. Then you have to live and work there for years before becoming eligible to citizenship, at which time you can safely renounce your American citizenship (provided you have kept up on your tax filing for some years prior, it can cost upwards of 10,000$ a year to have someone prepare your American foreign taxes, and you may not be able to legally obtain all the documents America demands you obtain for your filing to be legal) - FACTA, look it up, it's a mess and it's recently been enforced on people with merely 'accidental' citizenship.
For an average joe without a massive inheritance? Forget it! Nobody will take you! Nobody wants you! They WILL throw you out ASAP!
I, for instance, can't go down to Mexico and get a job. They'll see my white skin and refuse to hire me because if they get caught (and, yes, even Mexico does more sweeps than the USA) they'll get a fine that may bankrupt their business. I also can't buy property or use police services.
A lot of Americans think that because their country lets low-skill and illegal immigrants live and work here that every country in the world is like that. That couldn't be further from the truth.
http://llltexas.com <- my blog
@Heinrich Metz If we take the term "natural born citizen" to mean a citizen at birth. In the US and Canada citizenship is conferred at birth in two ways: jus soli (being born on US soil gives you US citizenship) and jus sanguinis (your biological mother, in some cases father, is a US citizen gives you US citizenship). For some reason nobody thinks about jus sanguinis, but it grants Cruz, and Obama, citizenship at birth regardless of where their brith took place.
I am also considering a transfer to New Zealand. Is there any possible way I may contact you regarding this issue?
The act you're referring to is actually the FATCA (Foreign Account Tax Compliance Act). It is currently set to come into effect by July 2014 but the IRS is working with overseas financial institutions now to make sure they meet the reporting requirements by the deadline.
And you're right to point out that FATCA probably is one reason behind the latest surge in U.S. citizenship renunciations, since the severe penalties imposed by FATCA on institutions that fail to comply mean most are likely to do so.
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