[Congressional Record Volume 165, Number 119 (Tuesday, July 16, 2019)]
[Senate]
[Pages S4847-S4849]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                           Amendment No. 924

  Mr. PAUL. Mr. President, I call up my amendment No. 924.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The senior assistant legislative clerk read as follows:

       The Senator from Kentucky [Mr. Paul] proposes an amendment 
     numbered 924 to Treaty Document No. 113-4.

  Mr. PAUL. I ask unanimous consent that the reading of the amendment 
be waived.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

        (Purpose: To amend the Protocol to protect tax privacy)

       In paragraph 1 of Article 27 of the Convention, as amended 
     by Article XIII of the Protocol, strike ``such information as 
     is

[[Page S4848]]

     foreseeably relevant'' and insert ``such information as is 
     individualized and relevant to an individual investigation''.

  Mr. PAUL. Mr. President, for several years now, I have been working 
on tax treaties that we have with other countries to try to protect 
Americans' privacy. I think it is very important that your personal 
information--what you buy with your credit card, what checks you write, 
and what you do with your bank account--is private. It is yours, and it 
is not to be sifted through or rummaged through by the government.
  I am very, very concerned that, over time, particularly with 
technology, the IRS is gaining too much power at the push of a button 
to simply sift through our bank accounts looking for anomalies.
  I think it is important that we protect Americans who live overseas. 
About 8 million Americans live overseas, and I think the vast majority 
of them are law-abiding citizens.
  This debate has been going on for several years now. I first tried to 
engage the Obama administration in this. We had meeting after meeting 
but no meaningful engagement. Currently, we have been involved in 
negotiations with the Trump administration, which has been more open to 
discussions of how we protect Americans' privacies. Unfortunately, 
these negotiations were sabotaged by the Republican leader, who chose 
to bring these tax treaties forward at a time when we were in the 
middle of negotiations. This is very disappointing to me because I 
think we were at the point of actually achieving a deal that would 
protect the privacy of Americans. This process has been severely 
damaged and short-circuited by the Republican leader's choosing to push 
this forward and destroy the negotiations that we were having at the 
time.
  When we look at these treaties, and we say, ``well, how could we make 
them better,'' there are ways that we could actually make them better. 
There are also ways that these treaties could have come up at any point 
in time in the past. No one Senator can really block legislation. The 
fact that this legislation hasn't come up for several years is really 
due to the fact that the Republican leader has failed to engage in any 
meaningful compromise or discussion over these.
  The treaties are being brought up against my objections now. So they 
could have been brought up against my objections 2 years ago, 4 years 
ago, or 6 years ago. Really, the fault and the responsibility for the 
delay of these tax treaties lies squarely at the foot of the Republican 
leader, who has failed to engage on this subject and has, rather, 
chosen at the end just to rush them through without any meaningful 
debate.
  Americans are constitutionally guaranteed to be free from 
unreasonable, suspicionless search--or at least we used to be. Today 
this Chamber begins consideration of four tax treaties, and each one of 
them contains provisions that would violate the fundamental right to be 
free from unreasonable searches.
  To be sure, these treaties would bestow benefits to the United States 
and our trading partners, and those provisions have my support. In 
fact, I have said for years now that I support the gist of the treaties 
and that they try to prevent double taxation and they make it easier 
for companies to do business overseas, as well as to do business in our 
country. That is why I have said from the beginning: Let's negotiate a 
settlement. Let's try to put taxpayer protections into the treaties. 
But at every point we have been stymied.
  I don't think the benefits of these treaties should come at the grave 
expense of violating the rights of every American with a foreign bank 
account, regardless of whether there is a shred of evidence that a 
crime has been committed.
  These treaties make it easier for tax authorities, such as the IRS, 
to obtain an American citizen's bank deposit account information. 
Previously, the IRS could only obtain such information if it was 
necessary to address a tax dispute, but that is not the standard these 
treaties will keep. In the past, there had to be at least an accusation 
of wrongdoing, an accusation of fraud, or an accusation that a taxpayer 
was doing something against the law. These treaties, though, would 
allow the IRS--the government Agency that instills terror in every 
citizen it contacts, the government Agency that has almost limitless 
power to put anybody out of business--to obtain individual bank account 
records if that information is ``foreseeably relevant'' or ``may be 
relevant.''
  Think for a minute what the standard is here. So if you happen to be 
an American who does business overseas, if it may be relevant, the 
government can look in your bank account. Really, the standard is ``may 
be relevant'' to the Tax Code, ``may be relevant'' to a question, 
instead of ``is relevant'' to an active investigation concerning 
wrongdoing by a taxpayer. I think this is a big mistake. It is going to 
lead to bulk transfer of information from countries back and forth.
  We live in an era where some people leave one country or another, 
hoping to get away from totalitarianism and hoping to get away from the 
snooping authorities that may well debit their account or control their 
account based on their political behavior. I think it is a mistake to 
allow the information to be transferred back and forth without any kind 
of standard. The standard is ``foreseeably relevant,'' or ``may be 
relevant.'' What kind of standard is that?
  Historically, the standard required, at the very least, is an 
accusation of a crime. It will no longer require that. Will it require 
suspicion of a crime? No, it will require anything the government asks 
that it may be relevant to the treaty, that it may be relevant to the 
Tax Code, which is basically no standard at all. No American overseas 
will have any kind of protection of their privacy.
  Some recent international court decisions have provided an idea as to 
what meets this new standard. According to the Swiss Federal Supreme 
Court, under the new standard of these new tax treaties and the 
``foreseeably relevant'' standard, an information request will only be 
denied if the link between the requested data and the information is 
improbable. No consideration is necessary as to whether there is 
reasonable suspicion of a crime. People can go after the information, 
basically, based on no accusation of a crime or no suspicion of a 
crime. It will be a fishing expedition.

  Perhaps we should thank the Swiss Federal Supreme Court for 
effectively telling us what we already knew, that the ``foreseeably 
relevant'' standard is really no standard at all.
  At a time when the United States is over $22 trillion in debt and 
running annual trillion-dollar deficits, these treaties would empower 
the IRS to obtain sensitive bank account information under the weakest 
of pretenses. In short, the information is exchanged with no questions 
asked, no reasonable suspicion, and no due process in an effort to 
swell the coffers of the U.S. Treasury.
  I am outraged by this. The Senate should be outraged, and the 
American people should be outraged that their liberties are so 
cavalierly cast aside to accommodate the IRS's perpetual search for 
more taxpayers to shake down.
  My amendment to the treaties would end bulk exchanges of financial 
records by simply mandating that the United States and our treaty 
partners would exchange information only if an identified individual is 
subject to an individual investigation related to the enforcement of 
the Tax Code. I am not against going after people not paying their 
taxes, but I am against going after the 8 million Americans who live 
overseas and are just trying to abide by the laws and just trying to 
earn a living.
  While those who have evaded their tax obligations must be held to 
account, the power to search and seize is not absolute in the United 
States or in any free country. A government dedicated to securing the 
blessings of liberty does not allow the IRS to rummage through our bank 
accounts hoping to find a crime.
  Obtaining the deposit account information of an American should be 
done on an individualized basis without resorting to indiscriminate 
sweeps of sensitive information gathering.
  I urge every Senator to stand up for the Fourth Amendment rights of 
all Americans and to support my amendment.

[[Page S4849]]

  My amendment would simply do this. It would put a standard into the 
treaties that says that there has to be suspicion. You have to 
individualize an investigation. You can't push a button and search 
through 8 million Americans' bank records overseas. If we allow this to 
go without personal privacy protections, we are setting ourselves up 
for a dystopian nightmare, where the government looks at every 
transaction, every purchase, and everything we do in our lives. It is a 
big mistake to let this go.
  There is no reason why this couldn't be corrected.
  I have spoken to the countries involved, and they have assured me 
that there is not a problem at all with making these amendment changes 
to the treaties. Yet they have fallen on deaf ears.
  It is a sad day for Americans taxpayers and a sad day for privacy 
that these tax treaties are being rushed through. I strongly object and 
hope other Senators will consider voting for taxpayer privacy.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. RISCH. Mr. President, I ask unanimous consent that the vote take 
place after the completion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. RISCH. Mr. President and fellow Senators, today the Senate is 
considering four tax protocols. These treaties--and these are 
treaties--have been approved by substantial bipartisan majorities in 
the Foreign Relations Committee in multiple successive Congresses. Two 
of these four protocols were reported out of committee without 
objection during the four most recent Congresses. It is in the interest 
of U.S. taxpayers that these be approved, and it is time for these to 
be approved.
  I am honored that on my watch, we have finally brought these to the 
floor and brought them here at this moment to actually adopt these 
treaties, which will be adopted when the vote is called.
  Tax treaties benefit U.S. businesses and citizens in a number of 
ways. Tax treaties create certainty for the business community. They 
promote a favorable business environment by minimizing uncertainty and 
helping U.S. businesses grow.
  In the case of Americans working and conducting business abroad, tax 
treaties are indispensable in that respect. Tax treaties facilitate 
trade and investment by preventing double taxation. They provide U.S. 
taxpayers and investors with greater clarity about their tax burden. 
They provide tools to ensure that U.S. taxpayers are treated equally 
and fairly overseas, allowing them to invest and compete abroad with 
the knowledge that they will not face discriminatory barriers.
  Tax treaties strengthen the ability of U.S. businesses to explore new 
opportunities abroad by establishing a predictable framework for how a 
tax burden will be assessed. These treaties also provide tools to help 
resolve tax disputes between the United States and our tax treaty 
partners. Without these tools, U.S. investors would have limited 
ability to resolve these problems on their own.
  It is not just businesses that benefit from tax treaties. These 
treaties impose reasonable limits in the amount of tax the other 
country can impose on a U.S. person who might live or work overseas. 
Tax treaties help us ensure that the United States can maintain an 
appropriate tax base by preventing tax fraud.
  One of our colleagues has raised concerns about how the treaties deal 
with individual privacy and sensitive information. These treaties 
protect taxpayer information in a manner consistent with decades-long, 
established standards and practices under U.S. domestic law. These 
standards and practices have been upheld by the U.S. Supreme Court for 
more than half of a century. They have been used by administrations of 
both parties for decades. Changing the standard now would create 
confusion related to global administration of our tax laws.
  I do not view this issue as an impediment or a change to how these 
matters have been successfully handled in the past. I ask my colleagues 
to oppose any amendments to these treaties. The treaties are consistent 
with the U.S.-modeled tax treaty and with a decades-long practice of 
implementing and enforcing our tax laws.
  To be clear, any amendment to this resolution that materially changes 
the underlying provisions of these treaties will require acceptance by 
both our President and the foreign partner or the treaty cannot be 
ratified. These amendments constitute a material change to the 
treaties. They are damaging and would lead to, potentially, years of 
further delay when further delay is simply not acceptable.
  These treaties had been held up for 8 years, and I am very pleased 
that this week we are finally moving forward in our role of advice and 
consent to the President on these commonsense treaties. It is time to 
move for the Senate to act on these treaties and a vote.
  I urge my colleagues to approve them and to vote against the proposed 
amendments.
  Mr. RISCH. Mr. President, I ask unanimous consent that Senator Paul 
have up to 5 minutes of debate prior to the second tranche of votes in 
this series.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.