France's highest administrative court has rejected an attempt by an association representing people affected by US citizenship rules to stop the transfer of their banking data to the American tax authorities.
FATCA, the Foreign Account Tax Compliance Act, is a 2010 US law requiring financial institutions worldwide to identify and report accounts held by US taxpayers. Banks that fail to comply can face a 30% withholding tax on certain US-source payments. There are also penalties for US taxpayers themselves who fail to comply with separate FATCA reporting obligations.
Faced with the risk of financial sanctions for non-compliant reporting, some French banks have opted to simply close the accounts of customers unable to provide a valid US tax identification number, usually a social security number (which they may never have had). The Association des Américains accidentels says this problem has affected tens of thousands of accounts in France.
As the US taxes based on nationality, not residence, it catches anyone with US citizenship, including so-called "accidental Americans," French residents who happen to have been born on US soil, often to French parents, and have no other connection to the country. For them, French bank accounts, tax identification numbers and balances get reported to the IRS.
Many residents’ report difficulty opening French bank accounts or getting financial products once flagged as US persons, and giving up US citizenship to escape the whole system is itself an expensive, formal process.
Last month, the Supreme Administrative Court in France, the Conseil d'État, rejected an application brought by the Association des Américains accidentels, which had asked the court to block the French finance minister's refusal to suspend the transfers under the FATCA agreement.
France's annual data transmission to Washington was due by 30th September, and the association argued that once the data is sent, its effects cannot be undone.
The court didn't reject the case on the merits. The judge held only that the association's arguments did not raise a "sufficiently serious doubt" about the legality of the minister's refusal and so the transfers can go ahead as usual this year.
The court noted that the underlying legality of the Franco-American arrangement had already been examined by the Conseil d'État in 2019 and 2024.
The court also considered that a separate case now pending before the EU's Court of Justice (CJEU), referred by a Belgian court in December 2025, wasn't enough on its own to change that assessment for this year's transfer.
A ruling in that Belgian case, which raises similar questions about whether FATCA's blanket approach complies with EU data-protection law, isn't expected before 2027.
The unresolved question of whether a nationality-based reporting system can be squared with EU data-protection law therefore now sits with the CJEU.
Related Reading:
.
,
.
