Our EU discriminating bonds supplement

NLAA Logo

Our EU discriminating bonds supplement #

With the ongoing COVID pandemic and its green plans, the European Union and Euratom decided to issue billions of Euro worth of bonds and bills known as SURE bonds as well as NEXT Generation EU bonds (thereafter NGEU) - also known as Green bonds - and to loan the proceeds to Member States facing particular economic difficulties. The von der Leyen Commission decided to borrow those funds by, among other things, issuing bonds which entails producing their pertaining EU regulated documentation such as, among other things, prospectuses, also known as Offering Circulars. Previous prospectuses for debt issurance programmes by the European Union and Euratom were equally discriminatory to EU US citizens as we will show.

We can therefore talk of a pattern of discrimination against EU US bi nationals by the EU Commission and Euratom.

Much publicity has been made around the SURE and NGEU bonds by the EU Commission and its president in particular. The SURE and Next Generation EU/Green bonds were heralded by the Commission as marking a new and deepening era of financial solidarity among Member states and this in spite of the traditional reticence of the “frugal” Member states which seem to have overcome their long standing reserve given the seriousness and lack of precedent in our lifetimes of the COVID pandemic, its economic consequences as well as the urgency of climate change.

Discrimination in EU prospectuses even started before Member states had signed FATCA and even more unbelievably before the US Congress voted the Hire Act establishing FATCA in 2010.

What is nonetheless most bizarre, as shown by Filippo Noseda of Mishcon de Reya thanks to the Commission’s correspondence unearthed by MEP Sophie in ’t Veld, at the same time the discriminatory prospectuses of 2010 and 2012 were being issued, the Barroso Commission and the EDPB’s predecessor the - WPart29 - were voicing serious doubts about the exchange of personal data FATCA entails with a non member state and its legality under EU law and that, under the much less stringent directive 95/46 and not the present GDPR.

So what must we think of this contradictory, incoherent really, behavior since the Legal Officers of the Commission either rubber stamped or suggested discrimination in 5 prospectuses, 4 issued in 2004, 2010 and 2012 by the Barroso and Prodi Commissions and prior to the signature of most FATCA IGAs by Member states and the other one in 2015 by the Juncker Commission? It is impossible to say without an inquest from the European Parliament, inquest that should take place given the seriousness of the matter, because we are talking here of the EU Commission and Euratom discriminating 1,200,000 of its own citizens in important EU regulated documents while the Tax Commissioner Paolo Gentiloni vehemently protests in the European Parliament that there is no gross breach of EU law due to FATCA.

His protestations are public record since he actually wrote it to MEP Fran├žois Xavier Bellamy in April 2020. (It goes without saying that after such an affront to 1,200,000 EU citizens, we requested in our main petition that Paolo Gentiloni have the decency to resign effective immediately.) Prospectuses are EU regulated documents. The latest directive aimed at prospectuses, is regulation 2017/1129. According to article 7.2 of said directive “the content of the summary shall be fair clear and not misleading…." (Bolds are ours). The Price Supplements of the SURE and Next Generation EU bonds can be construed as “summaries” to use the precise term of the 2017/1129 regulation. On the topic of EU regulated documents, we never saw any of the obligatory KIDS.

Discrimination against EU citizens or solely US citizens legally residing in the EU is “unfair” and the convoluted way discrimination is phrased in those 5 prospectuses most certainly “unclear” to the ordinary retail investor in addition to being an outrageous breach of EU law. Because it does not get more outrageous than the EU Commission discriminating 1,2 million of its own citizens in its own prospectuses and marketing documents, with its own Legal Officers allowing it. Furthermore all this legislation creates the famous Capital Markets Union, legislation that was proposed and eagerly wanted by the previous Commission and for good reason, Juncker’s country will be with Ireland the main beneficiary of passporting.

And after all that, a Commissioner, in this instance Mr Gentiloni, argues with true aplomb and astonishing hypocrisy to a MEP that “there is no breach of EU law” and therefore FATCA and its consequences for EU US bi nationals and solely US citizens legally residing in the EU “are not within the remit of the EU”!

And yet the EU is one of the perpetrators if not the most prestigious among sovereigns in the EU! It is however well within the remit of the European Court of Justice, - the jurisdiction of reference in prospectuses and Pricing Supplements - much like the Privacy Shield was as its famous repeal in 2020.

Read complete Supplement here: >EU bonds programs, petition supplement