Diplomatic Briefing

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Archive for May 3, 2012

Commentary: An ugly day of US diplomacy

The State Department painted it as an elegant way out of a ballooning crisis involving Chinese dissident Chen Guangcheng — but by day’s end, it looked like a disgraceful performance by US diplomats. Initial reports had Chen so pleased by the deal that he told Secretary of State Hillary Clinton, “I want to kiss you.” The agreement Clinton negotiated with Beijing yesterday supposedly allowed Cheng to stay in China and get medical attention, with the authorities guaranteeing his future safety. But things started unraveling just hours after the compromise was inked. First, while State claims Chen never wanted to leave China, the dissident said he and his family would rather leave. And it looks like he was all but forced out of the US embassy, where he’d sought asylum. Would Beijing have called off the talks if we’d just let Chen stay in the embassy or granted him and his family asylum? We’ll never know: Clinton opted to seek a deal. The State Department suggested that yesterday’s dramatic deal left all sides satisfied: Chen was escorted to a hospital by our ambassador in Beijing, Gary Locke, and reunited with his family. He thanked Clinton in a phone call. Then Beijing — while not denying the deal — demanded a US apology, saying America had “interfered in the domestic affairs of China, and the Chinese side will never accept it.” But then Chen gave the Associated Press an interview from his hospital bed — saying that a US official had told him that, if he stayed in the embassy or left for America, China wouldn’t let his family join him. Chen said he was told that “if I don’t leave, they would take my children and family back to Shandong” — and beat his wife. State denies Chen’s account, and maybe the heroic Chen truly misunderstood the deal. And, hey, China may well end up honoring its supposed vow to stop harassing him. But that’s an eventuality that America can no longer control. The only thing we know for sure is that the symbol of opposition to China’s “war on women” is no longer protected by America — and it looks like we tossed him to the wolves.



Newsline: US says it’s still trying to help Chinese activist

U.S. officials said Thursday they are still trying to help a blind Chinese activist who says he fears for his family’s safety, and denied he was pressured to leave the American Embassy to resettle inside China. Chen Guangcheng is at the center of a diplomatic dispute between Washington and Beijing that is especially sensitive for the Obama administration because it does not want to appear unwilling to press China on human rights issues during an election year. After fleeing persecution by local officials in his rural town and seeking refuge in the embassy in Beijing for six days, Chen left Wednesday to get treatment for a leg injury at a Beijing hospital and be reunited with his family. U.S. officials said the Chinese government had agreed to resettle him in a university town of his choice. Chen initially said he had assurances that he would be safe in China — which is what U.S. officials said he wanted — but hours later said he feared for his family’s safety unless they are all spirited abroad. He also said he felt pressured to leave. U.S. Ambassador Gary Locke told a news conference that he could say “unequivocally” that Chen was never pressured to leave. Locke says Chen left the embassy after talking twice on the telephone with his wife, who was waiting at the hospital. “We asked him was he ready to leave. He jumped up very excited and said ‘let’s go’ in front of many many witnesses,” Locke said. China objects to any U.S. involvement in its internal affairs and has demanded an apology from Washington for harboring Chen, who ran afoul of local officials in his rural town for exposing forced abortions and other abuses. The dispute overshadowed the opening of annual talks Thursday between China and the United States attended by Secretary of State Hillary Rodham Clinton, who said in a speech that China must protect human rights, in remarks that rejected Beijing’s criticism of the U.S. for getting involved in Chen’s case.


Consular affairs: Wealthy Americans Queue to Give Up Their Passports

Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG (UBSN) whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago. About 1,780 expatriates gave up their nationality at U.S. embassies last year, up from 235 in 2008, according to Andy Sundberg, secretary of Geneva’s Overseas American Academy, citing figures from the government’s Federal Register. The embassy in Bern, the Swiss capital, redeployed staff to clear a backlog as Americans queued to relinquish their passports. The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport. Renunciations are higher in Switzerland because American expatriates expect extra scrutiny of their affairs after the UBS case and as the U.S. probes 11 other Swiss financial firms for aiding offshore tax evasion. During a 10-minute renunciation ceremony in a booth with bullet-proof glass windows, embassy staff ask exiting Americans whether they are acting voluntarily and understand the implications of giving up their passports. They pay a fee of $450 to renounce and may incur an “exit tax” on unrealized capital gains if their assets exceed $2 million or their average annual U.S. tax bill is more than $151,000 during the past five years. They receive a certificate within three months, telling them they are no longer American citizens. The U.S. embassy in Bern declined to comment on renunciations. The U.S. State Department doesn’t disclose annual figures, said Elizabeth Finan a spokeswoman for the Washington- based department, adding that “on average” 1,100 people give up their citizenship each year. While the U.S. taxes citizens regardless of where they reside, overseas income of as much as $95,100 is exempt and credits help compensate for foreign taxes paid. Americans living in Switzerland can’t take advantage of the absence of a capital gains tax in the Alpine country or tax deductions allowed on pension contributions. Americans, who disclose their non-U.S. bank accounts to the IRS, must file the more expansive 8938 form beginning this year that asks for all foreign financial assets, including insurance contracts, loans and shareholdings in non-U.S. companies. Failure to file the 8938 form can result in a fine of as much as $50,000. Clients can also be penalized half the amount in an undeclared foreign bank account under the Banks Secrecy Act of 1970.