Americans Helping Americans Abroad

Position Papers - 2009

Overseas Voting Reform

Americans abroad are proud of their citizenship and vigilant in guarding their constitutional right to help elect their President, Vice President and Members of Congress. For most overseas Americans, their right to vote is the primary means available to them to participate in the American democratic process. Civilian voter turnout overseas has increased steadily in recent years, and overseas Americans have historically had higher election participation rates than their state-side counterparts – typically 3+% of votes cast, although they comprise only about 2% of the electorate.

The vast majority of local election officials surveyed after the 2008 federal election noted increased overseas voter participation compared with previous years. Unfortunately – and despite some recent reforms – overseas voters continue to face a range of obstacles and bureaucratic pitfalls that all too frequently frustrate their efforts to exercise their cherished democratic rights.

The Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) of 1986 defines the rights of overseas U.S. citizens to vote in U.S. federal elections, and sets out the parameters for registering and voting by absentee ballot from overseas. UOCAVA was complemented by the Help America Vote Act of 2002 that addressed a plethora of problems in voting domestically and attempted to eliminate some of those faced by overseas absentee voters.

Nevertheless, overseas citizens still face a number of obstacles in casting their votes and having them counted.

In the Overseas Vote Foundation 2008 Post Election Voter Survey, more than one in five (22%) of the 24,000 respondents did not receive the official ballot they expected; nearly one-third (31%) of experienced overseas voters still had questions or problems when registering to vote; and more than half (52%) of those who tried but could not vote, were unable to because their ballots were late or did not arrive at all.

Pending legislation will address many of the problems encountered by Americans attempting to vote from abroad and will require urgent support so that the changes called for can be implemented in time for the 2010 federal election.

Voting procedure reforms still needed

Voter registration, ballots and/or Federal Write-in Absentee Ballots should not be refused for any reason that can disadvantage overseas voters, such as “non-standard” size, shape, weight or color of paper of the application, envelope or ballot (given that such materials are now often downloaded using non-American machines and paper); notary, witness or oath requirements (given the often prohibitive cost of access to notary services outside the United States); delivery of the application or ballot by a method other than the Post Office (to allow for hand delivery, courier or express mail services); or arbitrary requirements that are not necessary to prevent fraud.

American citizens who do not meet state residency requirements should have the right to vote in all states at the legal voting residence of their U.S. citizen parent(s). Today, only sixteen states explicitly enable Americans who cannot satisfy state residency requirements to exercise their constitutional right to vote in federal elections, though some states are introducing new initiatives.

The deadline for the receipt of overseas ballots should be uniformly fixed on Election Day, and overseas ballots should be counted simultaneously with domestic ballots, ensuring that overseas votes are taken into account in the announcement of the results of the election.

No voted ballots should be required to be received before the official Election Day. In the event of special emergency elections, the period between announcement of the elections and receipt of all ballots should be uniformly fixed at 60 days.

US Social Security Aspects of Working Abroad

Americans who go to work in a foreign country rarely focus on the long-term consequences of doing so when they accept a job abroad, although the decision can have an appreciable adverse effect on their American old-age pension from Social Security. Since 1983, when the US Social Security Act was amended to «remove the advantage which the Social Security benefit formula provides for persons earning substantial pensions from non-US Social Security sources », the Social Security Administration has been authorized to apply the Windfall Elimination (« WEP »)’s offset to the American’s U.S. old-age pension. This penalty reduces the retiree’s benefit check by as much as 50% of the first tranche of Social Security’s ‘Average Monthly Earnings’ for the retiree.

The coalition of Associations representing overseas Americans have raised questions before the House Social Security & Senate Finance Committees regarding the appropriateness of the offset as applied to Americans working abroad and the fairness of such application in the absence of administrative hearings on the issue but have not had success with these arguments. The inequity of the Windfall Elimination Provision is further dramatized by the fact that the retiree often stopped contributing to US Social Security when he left to work abroad when his Average Monthly Earnings were low (thus limiting his US pension) and receives a foreign pension for work abroad that is not commensurate with what he would have earned under US Social Security (his foreign pension often being far from ‘substantial‘). He or she is thus doubly penalized for taking the job abroad.

Totalization Agreements with 20 foreign countries do not adequately relieve the effect of this penalty and produce ‘unintended consequences’. Experience under the Totalization Agreement of one country reveals that in order to avoid the WEP by totalizing US work credits with foreign ones, the American worker has to forfeit rights under the foreign social security system by taking ‘early retirement’ before Normal Retirement Age. This requirement runs counter to policies of both foreign countries and the USA, embodied in the 2000 Seniors Right to Work Act, which encourages older workers to remain on the job after Normal Retirement Age. It also requires them to make a shrewd calculation as to when to retire so as to avoid the greater loss under one system or the other.

AARO, FAWCO and ACA have joined a Washington lobbying alliance called CARE (for Coalition Assuring Retirement Equity) dedicated to repeal of the WEP and representing many employee associations. The “Social Security Fairness Act of 2009” (H.R. 235 and S. 484) seeks to address the inequities caused by the WEP, and we join with other CARE organizations in urging Congress to support this measure.

Medicare for Overseas Americans

Although many Americans who live overseas have contributed to Medicare during their careers through pay-roll deductions, they generally are not able to benefit from Medicare if they retire outside the USA. An exception to this rule has been made for military veterans and their families, who retire abroad and do not have a military medical facility within a reasonable distance of their domicile. The Tricare Standard plan offers reimbursement for reasonable scheduled medical expenses incurred by military retirees upon submission of proper proof, amounting to 75% of expenses incurred.

Associations representing Americans overseas have lobbied in past years for some relaxation of the strict rule prohibiting the coverage of medical expenses to Americans in retirement outside the USA. Its efforts have been unrewarded, due to the prevailing rationale in Congress, which holds that (1) reimbursement rates for medical services abroad are undetermined and undeterminable and likely to be very costly, and (2) compliance with Medicare standards by foreign medical facilities and personnel cannot be ensured. These objections illustrate the intricate, thorough codification of medical acts and practice which governs the thinking of the Center for Medicare Services (CMS) and which could not be implemented in foreign countries without much time and difficulty. In practice, medical costs in the U.S.A. are almost invariably higher than elsewhere; since covered persons can receive treatment by traveling back to the U.S.A., the prohibition against foreign coverage not only inconveniences Americans, but it costs the Treasury more money as well.

Experience has been gained in Mexico, however, showing that a less ambitious program, the military’s Tricare Standard coverage, can operate there and ensure reasonable coverage for retirees living there and delivery of medical and hospitalization services at a cost saving compared to scheduled Medicare costs in the USA. The experimental program there was administered by the Wisconsin Physicians Service. It was not only effective; it has encouraged the adoption of medical standards recognized as meeting Medicare criteria, in Mexico.

The Obama Administration has already focused clearly on the need to automate health care information, particularly patient medical records. As Americans resident overseas, we have considerable experience, either directly or through other people using the system in Europe, and we have been impressed with the efficiency, security and cost savings that such automation has yielded to the health care systems of these countries. We note from our own use of such country systems that automated records reduce the inefficiencies of duplicate paperwork and speed up the transfer of data for use by the providers. We would welcome the opportunity to assist DHHS in facilitating such a review.

Another issue concerns the financial penalty applied to Americans who enroll in Medicare after their initial year of entitlement. Overseas Americans associations contend that an American, covered by medical insurance through employment, directly or indirectly, should be able to sign up for Medicare when he returns to the USA without penalty, even if he does so at 68 or 70. Since the American has not been able to draw on the program, penalizing him for late enrollment is unreasonable and punitive.

The United States should honor its commitment to civilian Americans who have contributed to Medicare and retire outside the USA by delivering Medicare or some reasonable alternative medical protection to eligible persons. If an extension of Tricare Standard to civilians is not favored, a Medical Research and Demonstration project could be developed by the CMS for a country or regional market. This would provide for the collection of data about relevant medical costs and services in the market and be a step in the direction of designing a program applicable abroad.

Another possibility is the design of high-deductible insurance abroad coupled with Health Savings Accounts useful to civilian Americans on retirement abroad. The methods of entitling Americans abroad to benefit from medical coverage exist. We respectfully request Congress and the Government to help us find an appropriate solution for the medical needs of American civilians abroad.

Americans Residing Overseas are Denied Bank Accounts

Overseas Americans are Caught in a Catch 22!

Americans residing overseas are denied access to banking facilities in the United States, solely because of their foreign address. The number of such instances has risen sharply since passage of the Patriot Act. Banks refer to “Know Your Client” rules in this legislation as the reason for refusing clients with overseas addresses, even if they are U.S. citizens. Overseas American citizens are consequently being denied the basic right to maintain normal commercial relationships with their country.

Furthermore, the Qualified Intermediary rules of the IRS for overseas banks with American clients have already discouraged many foreign banks from accepting American clients. For example, as noted in the IHT (02.27.2008), ABN AMRO, announced on February 27, 2008 that “it was closing any portfolio investment accounts held by customers with a U.S. passport within 30 days, citing “strategic reasons.”…The Dutch financial newspaper De Telegraaf reported that the decision to cancel the accounts was the result of high costs to comply with U.S. regulatory laws.” As of January 1, 2010, reinforced QI rules will be so restrictive that very few overseas banks will continue to accept American clients; the reporting requirements are too costly and the legal and compliance teams do not want to assume the risks.

When loyal tax-paying American citizens face prejudice from both domestic banks and foreign banks, they are placed in a Catch 22 situation. Americans with a foreign address become outcasts, a security risk, potential money launderers or tax evaders. At a time of ever-increasing globalization and mobility of population, the damage inflicted by U.S. law on the estimated 5 million overseas American citizens is very serious. Congress must remedy the situation.

Unintended Consequences of U.S. Legislation Leads to Discrimination against Overseas Americans

When overseas Americans organizations inquired about possibilities of redress to the Department of Treasury, the OMBD Customer Assistance Group (vk 751858) replied: “In opening accounts, BSA requires the bank to collect certain minimum information such as name, date of birth, address, and social security number. In establishing/continuing banking relationship, the bank is also able to determine their marketing area. The bank’s marketing area plays a huge factor in the bank ability to collect on accounts that may go delinquent.

This policy was in practice prior to the Patriot Act. Once an account holder leaves a bank’s marketing area, there are no banking regulations that require the bank to maintain the relationship.” This reply ignores the facts and the real issue. Overseas Americans who have had U.S. investment accounts with significant assets and no debts for more than 20 years have been informed, subsequent to passage of the Patriot Act, that their account will be closed within 30 days. Each time it is the foreign address which is cited as the reason for this procedure. Institutions cited in case examples of forced account closure include Ameriprise, Bank of America; Bank of New Hampshire; Citibank; Citizens Bank; Edward Jones, St. Louis; E- Trade; Fidelity Investments; INGDirect; JPMorganChase; Morgan Stanley; National City Bank in Riverview, Michigan; Provident Bank, Maryland; Smith Barney; T. Rowe Price; USAA Federal Saving Bank; Vanguard mutual fund; Wachovia; Washington Mutual; Washington Mutual Investment, Spokane; WellsFargo; Zions Direct.

As one person reported, “Bank of America informed me that they would no longer provide services to my accounts and I had 30 days to transfer my assets to another financial institution or they would cash out the two accounts – just like that!! This is after being a good customer of the bank for twenty-four years.” Another noted, “As executor of my mother’s estate, I was prevented from overseeing my father’s care in a nursing home because their bank would not let me manage the estate account from Germany, where I live.” And another: “I had a brokerage account with E-trade for many years. My request to open a new financial account was refused because of my foreign address. When I heard stories from other Americans overseas that banks were insisting on closing accounts or possibly blocking an account, I decided to transfer my assets from ETrade to a foreign bank.” And yet another: “I am named in the wills of several of my family members who reside in the U.S. I do not want the funds to leave the U.S., but I cannot open an account there.”

Practical Issues linked to denial of bank services in the U.S.

Denied – Possibility to write a check on a U.S. bank to pay U.S. taxes
Without a U.S. bank account, there is no possibility to write a check to pay U.S. bills. Yet payment by check is still the principal means for settlement of bills, including payment of taxes to the IRS.

Denied – U.S. issued credit card required for certain purchases
Without a U.S. bank account, it is not possible to obtain a U.S. issued credit card.

Denied – The ability to transfer funds from overseas to American bank accounts
“I found myself unable to transfer funds to one of my children attending school in America.”

“When an IRA distribution was sent to my US bank, the bank refused the deposit, saying that I must provide a utility bill.”

“A U.S. bank, where I have had 529 College Savings Plans accounts for five years for my two daughters, suddenly in September 2007 refused any further deposits.”

“In spite of the fact that I have had long standing, multiple accounts with my bank, I was blocked from making transfers into an account and some brokerage transactions were also blocked due to my foreign address.”

Denied – Ability to establish a credit rating in the U.S. or to borrow from a U.S. bank
“It is very difficult for non-residents to get a mortgage for an investment/future retirement property because they cannot open an account in the U.S.”

“As a U.S. resident abroad, today I am unable to continue establishing U.S. credit history or even to request my credit report in case I want to request a loan from a U.S. bank.”

Denied – Access to
For individuals with financial transactions in the U.S., the FTC-approved allows one to obtain their free annual credit reports. The 3 major credit reporting companies (transunion, equifax & experian) all link to this site. It is very important for any consumer to review their credit report for errors. If one tries to access this site, the follow message comes up: " website is only accessible through ISPs (internet Service Providers) located within the United States and its territories." Once again, US citizens resident abroad are denied access to full US financial services.


The organizations sponsoring Overseas Americans Week strongly recommend that Congress, and in particular the Banking, Housing and Urban Affairs Committee in the Senate and the Financial Services Committee in the House of Representatives, investigate this issue and introduce legislation to correct the injustice of discrimination by American financial institutions against American citizens on the sole basis of their overseas address.

Transmitting Citizenship

Not all Americans residing abroad can transmit U.S. citizenship to their children due to restrictive provisions of US law; it is even possible for such children to be born stateless.

Some countries do not grant citizenship to the children of US citizens who are born there. These children would be legally stateless and not eligible for an American or another country's passport unless at least one American parent meets the requirements specified in the Immigration and Nationality Act.

Children born to American citizens abroad can inherit citizenship only as specified in Sections 301 and 309 of the Immigration and Nationality Act:

  1. Both of the parents are U.S. citizens and are married: a child born abroad is a U.S. citizen at birth if either of the parents has ever resided in the United States; no amount of time specified.
  2. Only one of the parents is a citizen of the United States: the U.S. citizen parent must have resided in the United States for a period or periods totaling not less than five years, at least two of which were after attaining the age of fourteen. ("Residence" in this case includes time spent abroad on U.S. military duty or employed by the U.S. government or by certain international organizations, or as the dependent of someone so employed.)
  3. U.S. citizen mother giving birth to a child out of wedlock: she must have resided in the United States for one uninterrupted year at any age prior to the child’s birth.
  4. U.S. citizen father of a child born out of wedlock: he must satisfy the residency requirements of Point 2, and he must also establish the blood relation, agree to support the child up to age 18 and assume legal paternity of the child before he reaches 18.

To facilitate transmission of citizenship and to avoid the hardships of statelessness:

Ideally, an American citizen should not have any residency requirement to be able to transmit nationality to his/her children, but at a minimum:

  • An unwed mother should be able to transmit citizenship to her child if she satisfies either the residence requirement provided under Point 2 or the existing requirement under Point 3.
  • The residency requirement under Point 2 should be reduced to two years.
  • The residency requirement under Point 3 should be modified from one continuous year to one year in total.

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