In a ruling issued at the end of last month, the US District Court for the District of Columbia has dismissed a suit brought by L’Association des Americains Accidentels against the US State Department in November of last year.
Together with nine individual plaintiffs, the Association of Accidental Americans (AAA) – a French-registered non-profit representing individuals who, by accident of birth on US territory, have become US citizens – last November took the State Department to court over the latter’s suspension of Voluntary Expatriation Services at its various diplomatic missions around the world.
The suspensions, the plaintiffs had argued, violated the US constitution and could not reasonably be justified by the outbreak of COVID, the ostensible reason for the suspensions. Some observers have argued that COVID has served as a convenient pretext for a State Department that is deliberately preventing rich Americans from ridding themselves of their US citizenship.
Both the plaintiffs and the defendants had filed for a summary judgment, which the court issued following extensive briefings. The government had argued that the court lacked jurisdiction to adjudicate in the case, a claim the court rejected by concluding that the plaintiffs had suffered a concrete injury redressable by the District Court. However, the Court also concluded that while the right to expatriate is fundamental, there was no authority to suggest that the government must allow citizens to renounce quickly, despite the ensuing hardship delayed expatriation may entail for such individuals.
The Court, explains international tax lawyer and expert on US expatriation David Lesperance, “confirmed that Americans have a right to renounce and that the US government needed to provide services in order for that right to be exercised. However, its also concluded that the provision of those services (renunciation appointments) had taken place ‘within a reasonable time’ given the situation and other demands upon the required consular services.”
Specifically, the Court cited the pandemic, the US military withdrawal from Afghanistan, and the Russian invasion of Ukraine as competing and more important demands on consular services than renunciation appointments. Moreover, the Court argued, consulates have sped up the granting of such appointments as the aforementioned crises had waned.
Lesperance says the “key for those who are seeking to renounce their US citizenship is to recognize that if they have a specific reason to expatriate by a given date, such as a pending liquidity event […], they need to make sure they have properly prepared for the tax ramifications of expatriation, are ready to travel, and have located one of the US missions that will give them an interview date in a time fashion.”
Fabien Lehagre, head of the AAA, says the association has already appealed the Court’s decision.