ACA American Citizens Abroad

A brief history of the founding and the activities of the American Citizens Abroad association since 1978.

The Birth of ACA: American Citizens Abroad (ACA) was founded on July 10^th, 1978, in Geneva, Switzerland, as a non-profit association under Swiss law. It was the successor to two previous local organizations, the Geneva chapter of Tax Equity for Americans Abroad (TEAA), and the Geneva-based American Children's Citizenship Rights League (ACCRL). Both of these organizations had already been active in trying to address specific problems faced by overseas Americans due to discriminatory U.S. laws on taxation and citizenship.

Why ACA Was Created: The catalyst for ACA's creation was Section 611 of the Foreign Relations Authorization Act of 1979, (Public Law 95-426) enacted by the U.S. Congress and signed into law by President Jimmy Carter on October 7^th, 1978.

The language of this provision was as follows:

Section 611(a) The Congress finds that –

(1) United States citizens living abroad should be provided fair and equitable treatment by the United States Government with regard to taxation, citizenship of progeny, veterans’ benefits, voting rights, Social Security Benefits, and other obligations, rights, and benefits; and

(2) such fair and equitable treatment would be facilitated by a periodic review of the statutes and regulations affecting Americans living abroad.

(b) Not later than January 20, 1979, the President shall transmit to the Speaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate a report which –

(1)  identifies all United States statutes and regulations which discriminate against United States citizens living abroad; and

(2) evaluates each such discriminatory practice; and

(3) recommends legislation and any other remedial action the President finds appropriate to eliminate unfair or inequitable treatment of Americans living abroad.

One of ACA's founders had helped draft this legislative language, and he and the other founders thought it would be appropriate for the overseas American community to assist the President in the preparation of his report to the Congress.

ACA therefore quickly began working on a detailed report to the President identifying 50 U.S. laws and regulations that caused problems for Americans living overseas. This report was submitted to President Carter on December 18, 1978.

In his report to the Congress, submitted on August 27^th, 1979, President Carter said:

“To comply with this mandate, the Office of Management and Budget requested seventeen agencies to review existing laws and regulations and to identify those which were discriminatory in nature. Subsequently, views of nine agencies were sought regarding a compendium of issues prepared by American Citizens Abroad, a private group based in Geneva.  That compendium is a well-prepared, comprehensive collection of citizens’ concerns, most of which deal with claims of unfair treatment. The compendium was helpful in identifying those issues of concern to a number of Americans living abroad. Comments from other private groups and private individuals were also received and considered. The personal quality of many letters provided a context in which the issues could be better understood.”

There was, however, considerable dissatisfaction in the Congress and overseas with the way the President had addressed some of the issues, particularly in the area of double taxation of Americans living and working abroad. ACA therefore asked the Senate committee staff to rewrite the original mandate to the President, this time requiring that the report look not only at problems of discrimination against Americans abroad in U.S. legislation and regulations, but also to analyze how U.S. laws and regulations might handicap the ability of overseas Americans to compete in world markets.[1] 

Section 407 of Public Law 96-60 amended the scope of section 611 to the following language:

Section 611 of PL 95-426, as amended by Section 407 of PL 96-60:

"Section 611. (a) The Congress finds that -

(1) United States citizens living abroad should be provided fair and equitable treatment by the United States Government with regard to taxation, citizenship of progeny, veterans' benefits, voting rights, Social Security benefits, and other obligations, rights and benefits; and

(2) United States statutes and regulations should be designed so as not to create competitive disadvantage for individual American citizens living abroad or working in international markets".

(b) Not later than January 20, 1980, the President shall transmit to the Speaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate a report which-

(1) identifies all United States statutes and regulations which treat United States citizens living abroad differently from United States citizens residing within the United States, or which may cause, directly or indirectly, competitive disadvantage for Americans working abroad relative to the treatment by other major trading nations of the world of their nationals who are working outside their territory;

(2) evaluates each such discriminatory practice; and

(3) recommends legislation and any other remedial action the President finds appropriate to eliminate unfair or competitively disadvantaging treatment of Americans living or working abroad."

ACA then wrote a second report for the President, commenting on the contents of the President's first report to the Congress, and adding a number of new issues specifically addressing international competitiveness and the inability of overseas Americans to compete on a level world trade playing field.

After the President's second report was submitted to the Congress, both of the ACA reports to the President, together with the President's two Reports to the Congress, and other relevant materials, were published in a special Senate Foreign Relations Committee report in August 1980.[2]

The President’s Export Council: In 1979, one of ACA’s founders was able to convince the President’s Export Council to create a special "Task Force to Study the Tax Treatment of Americans Working Overseas". The report from this taskforce was sent to President Carter on December 10^th, 1979. In his cover letter to the White House, the Export Council’s President, Reginald Jones, Chairman of General Electric, said:

“The Executive Committee of the President's Export Council has asked me to express its strong concern over the adverse effects on exports of the present rules (Section 911 and 913) concerning taxation of foreign earned income of Americans living overseas.”

“The result has been that third-country nationals, who generally do not have the burden of paying taxes in their home countries on their foreign earned income, are employed instead of American citizens. This has brought about a sharp loss in the U.S. share of overseas business volume in vital economic sectors, largely because third party nationals tend to specify and order equipment manufactured in their home country, whereas American citizens would specify and order U.S. equipment with which they are most familiar.”

The language of the report of the special Task Force was even more emphatic.  It stated:

“Americans are still being taxed out of competition in overseas markets. The result is a sharp loss in the United States' share of overseas business volume in vital economic sectors. The current situation contributed to our negative balance of payments, a loss of U.S. jobs to our competitors, and the decline in U.S. presence and prestige abroad.”

Among the Task Force’s Recommendations were:

“Americans working overseas are essential to a viable export program. An increase in the number of Americans assigned abroad can increase our exports, reduce the negative balance of payments, enhance our country's image, and raise employment in the U.S.”

“Recognizing that it is in the best interest of our nation to encourage Americans to work overseas, the Task Force recommends the adoption of tax policies that are comparable to those of major competing industrial nations, none of which now tax citizens who meet overseas residency tests. We urge the development and enactment of new legislation to put Americans who work in the private sector overseas on the same tax footing as citizens of competing industrial nations.”

“Americans at work overseas direct business to our domestic economy. If we are to increase exports in order to bring our trade accounts into balance, we must encourage more U.S. citizens to accept assignments with American business overseas. Concurrently, we must continue to be sensitive to the geo-political ramifications of having more Americans working abroad. Overseas employees of American business are seen as representatives of our country. Through their participation and visibility in international business affairs, they can function as goodwill ambassadors whose work exemplifies America's ideals and values.”

“To achieve these benefits will require, among other things, that current tax laws bearing on foreign-earned income be changed. At present, our nation's tax policies discourage the employment of Americans overseas. Many American companies dong business overseas, especially in manpower-intensive industries, are sending American employees home in order to keep some vestige of market share.”

Sadly, but predictably, the President and the Congress ignored this important report, did not implement these recommendations, and no subsequent enquiry of this nature has been carried out since 1979.

The Export Council’s predictions have proved very prescient. Since 1979, the U.S. trade deficit has grown now to more than $7 trillion in the aggregate and there has not been a single year with a net trade surplus. According to the Commerce Department, the employment of U.S. citizens by major U.S. corporations overseas has fallen by 50%.

ACA's Continuing Relations with the Executive Branch and the Congress: For the last 30 years, ACA has strived to maintain productive relations with both the Executive Branch of the U.S. Government and the U.S. Congress. ACA representatives have testified before several Committees in both the House of Representatives and the Senate, and have met regularly with senior Executive Branch officials. ACA has been instrumental in bringing about changes in laws and regulations on citizenship, taxation, social security, voting, the census, medical benefits for military retirees, the hiring of U.S. citizens by the U.S. Government abroad, and a number of other issues. ACA has also help draft a set of legislative proposals that would: (1) give American children born overseas the same rights to U.S. citizenship as foreign children born in the United States; (2) get rid of double taxation of Americans abroad; and (3) create a seat in Congress for a delegate to be directly elected by the overseas American community. These three proposals have been introduced during several recent Congresses but so far none has yet been enacted.

A Congressional Mandate to the State Department: The Congress expressed a new interest in the generic concerns of overseas Americans during hearings on the Foreign Relations Authorization Act for FY 1994/95 in the following terms:[3]

"The Committee of Conference recognizes the contributions that private U.S. citizens living and working abroad make to the promotion and protection of the interests of the United States throughout the world, and in particular, their vital role in making the United States more competitive in the world economy.  To ensure that everything possible is being done to enable American Citizens Abroad to compete on a most favored competitor basis, the Committee of Conference urges the Department of State to undertake, in cooperation with other relevant Departments of the U.S. Government and with the active participation of the overseas American community, a review of U.S. laws and regulations that may impede the ability of American Citizens Abroad to compete in world markets with citizens of other nations on a level playing field.  The Committee of Conference further believes that a process should be established so that American Citizens Abroad can contribute their ideas and suggestions for improving the promotion and protection of the interests of the United States throughout the world.  The Committee of Conference urges the Department of State to, consistent with available personnel and resources, consult American Citizens Abroad at embassy and consulate locations." 

Embassy Town Meetings Abroad: In response to this new Congressional request, Strobe Talbott, the then Deputy Secretary of State, instructed U.S. embassies and consulates to recognize:

"the importance of continuing your efforts to incorporate the views and expertise of our overseas private citizens and companies in policy-related activities. Posts should review their consultative arrangements with U.S. business firms, resident U.S. citizens, and their organizations to ensure that they include opportunities for consultation on these issues.  Posts may wish to hold "Town Meetings" at which interested U.S. businesses, residents and organizations could express views and provide information."[4]

Lessons Learned from Attempts to Organize Town Hall Meetings in the Past

In 1998, ACA met with the State Department and the American Foreign Service Association (AFSA) in Washington, and with the U.S. Embassy in Bern, Switzerland, to develop a prototype format for regular embassy-organized town meetings abroad. The first formal issue meeting between ACA and the U.S. Embassy in Bern was held in October 1999, followed by a second a month later in November. There has been almost no further progress since then, however, because the Congress had only "urged" the State Department and U.S. Embassies and Consulates to hold such town meetings but had not "required" that they do so. This taught us a very valuable lesson in the importance of crafting legislative language so that the intent is precise and the implementation instructions explicit.[5]

 

A New Start with Town Hall Meetings in Geneva: In late June 2009, a new experiment in Town Hall Meetings was launched in Geneva by the local U.S. Mission. There is hope that this will now develop into a regular program of events to discuss the major issues affecting U.S. citizens living and working abroad, and to reports that will be filed back to Washington via the State Department, and then on to the Executive Branch and the Congress for their follow-up.  We are very grateful to the Mission for this initiative.

Overseas Americans Week: In 2002, ACA proposed and helped coordinate the first Overseas Americans Week in Washington, D.C.  Participants came from a number of major overseas American organizations throughout Europe, North America, and the Middle East.  Meetings were held at the White House, the State Department, Treasury Department, GAO, both houses of the Congress, and other events included a press conference and dinner at the National Press Club. ACA helped coordinate the 7^th such event in Washington this year.

ACA Growth and Ubiquity: Since its birth in 1978, ACA has been contacted by thousands of American citizens living in more than ninety countries worldwide including many who have subsequently returned home to live in the United States. Their voluntary contributions fund the activities of the organization. In addition to offices in Geneva and Washington, DC, ACA has built up a network of several dozen "country contacts" on five continents. These country contacts are active private sector Americans who serve as links between ACA and the local American communities and provide a very useful two-way flow of information. ACA's officers and country contacts are volunteers and do not receive any regular salary from ACA.

ACA Award Programs: ACA has created several award programs including:

The Benjamin Franklin Award is given to Members of Congress who have made a notable contribution to helping improve the status of Americans living overseas.

            The Thomas Paine Award is given in recognition of the Common Sense, Creativity and Boldness in the journalistic coverage of Overseas Americans

The Thomas Jefferson Award is given to an employee of the U.S. State Department or Foreign Service who has been especially helpful to the American community abroad.

The Eugene Abrams Award is given to an American citizen living outside the United States who has contributed exceptional volunteer service to the local, national or international overseas American community.

ACA News and the Internet: ACA prepares and distributes news reports, press releases, and other forms of communications of interest to the overseas American community. ACA also has a very rich website (http://www.aca.ch) with regularly updated webpages providing news and commentary of interest to Americans abroad. The website has links to many other useful sites.  Messages can be sent to ACA via email: . 

ACA Financing: ACA welcomes contributions from individuals, corporations and other private sector institutions. ACA does not solicit nor accept any funding from the U.S. Government. Donations are gratefully accepted in both cash and in kind. Although several such large donations have been received from generous individuals and corporate donors, most of the funds contributed for ACA's activities have come in the form of small individual donations, and from fund-raising events such as the ACA annual auction in Geneva.

WHAT OTHERS HAVE SAID ABOUT ACA

"American Citizens Abroad as a uniquely American organization, built by volunteers who have come together to accomplish goals of great benefit to Americans living all over the world. ACA's programs and activities are thoughtful, creative and above all effective. We're pleased to have ACA as a valuable and much appreciated partner of National Public Radio, NPR Worldwide." - Jeff Rosenberg, Director, NPR Worldwide, Washington, D.C.

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"American Citizens Abroad" is a highly valuable resource for companies that have U.S. citizen employees working overseas. This all volunteer group endeavors to ensure that companies that employ Americans abroad do not suffer any competitive inconvenience or handicap because of inappropriate U.S. laws or regulations that affect U.S citizens who live outside their country of origin. ACA has a fine reputation for the diligence of its background work, the creativity of its proposals for reform, the effectiveness of its presentations in Washington, and above all for its more than 20 years of hard work and impressive results. They well deserve our thanks and support for their fine efforts." - Walter H. Diggelmann, former CEO, Swiss-American Chamber of Commerce, Zurich, Switzerland.

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