European Court to Decide Whether FATCA Violates Privacy Law as Banks Tighten Account Rules

For the first time, Europe’s highest court has been asked to decide whether FATCA is legal under European privacy law. The Court of Justice of the European Union (CJEU) formally registered Case C-804/25 on February 26, 2026, after the Brussels Court of Appeal referred 13 questions about whether FATCA’s mass transfer of U.S. account holder data to the IRS violates GDPR’s data minimization principle. Courts in the Netherlands and France have already ruled in FATCA’s favor in 2026; a CJEU ruling would be binding across all 27 EU member states and would likely force renegotiation of existing data transfer agreements, while regulatory changes in Australia, Canada, Israel, and Singapore are already tightening bank access for Americans abroad.

What Happened?

Belgium: The EU’s Highest Court Takes Up FATCA for the First Time

The Brussels Court of Appeal found it could not determine whether a 2014 FATCA intergovernmental agreement, drafted before GDPR existed, could legally override modern European privacy rights. On February 26, 2026, the court formally referred Case C-804/25 (Belgian State v. Individual and Americans Abroad Association) to the CJEU and asked 13 specific questions about whether FATCA’s “indiscriminate, mass transfer” of financial account data violates GDPR’s data minimization principle.

The case is now actively pending. A ruling against FATCA at the CJEU would require all 27 EU member states to immediately suspend transfers of American account holder data to the IRS. Cases of this complexity typically take 18 to 36 months once accepted.

A Geographic Split: Netherlands vs. Belgium

While the Belgian case is pending before the CJEU, Dutch courts reached the opposite conclusion. In March 2026, the Dutch Supreme Court (Hoge Raad) and lower courts ruled that the public interest of tax transparency outweighs individual GDPR privacy concerns and affirmed that FATCA data transfers must continue.

The result is a geographic split with concrete consequences. An American living in Rotterdam has no effective GDPR-based privacy protections against IRS data collection. An American living in Brussels, just 90 miles away, faces a more legally uncertain situation: the referral to the CJEU has raised doubt about Belgian banks’ obligations, though no formal injunction has halted all Belgian FATCA reporting. Same passport, same account, but different legal landscape depending on which side of a national border you live on.

France and Slovakia: Upheld, But Contested

The French Conseil d’Etat upheld the validity of FATCA transfers in early 2026, citing the same public-interest logic as the Dutch courts. The French tax authority then issued updated technical guidance v5.2 in March 2026, tightening reporting deadlines and indicating that acceleration is occurring regardless of the ongoing legal controversy.

Slovakia’s Office of Data Protection issued a non-binding opinion in March 2026, concluding that FATCA transfers do breach GDPR because the bilateral agreements contain “zero” privacy safeguards. The DPA acknowledged, however, that it has no authority to stop the Slovak Ministry of Finance from transmitting the data. In both countries, the legal argument has been made and either rejected or acknowledged without enforcement power. The practical result is the same: FATCA transfers continue.

Canada: Legal Pressure Forces a Partial Retreat

On April 10, 2026, the Canada Revenue Agency reversed a portion of its guidance on “partnership residency” for investment structures, narrowing the definition of who qualifies as a reportable U.S. person. It is not a direct FATCA strike, but it shows that sustained legal and community pressure can force tax authorities to shrink the reporting net even when courts do not formally rule in taxpayers’ favor.

Non-EU Regulatory Tightening in 2026

Outside Europe, financial institutions are tightening FATCA-related procedures independently of litigation outcomes:

Jurisdiction	2026 Development	Impact on Americans Abroad	Official Guidance
Australia	TIN validation tightened (Feb 2026)	Banks closing accounts where SSN or TIN is missing or unverified	ATO FATCA guidance
Canada	CRA form revisions (Apr 2026)	Narrowing who qualifies as a reportable U.S. person	CRA FATCA reporting
Israel	Bank access petition active	Americans being de-risked and denied basic banking accounts	IRS FATCA partner list
Singapore	FATCA schema v2.0 (May 2026)	Stricter document demands at account opening and annual review	IRAS FATCA guidance

Who Does This Affect?

The CJEU case and related 2026 developments are most directly relevant to:

Americans living in Belgium whose banks’ FATCA reporting obligations are now legally uncertain. Some institutions have paused or modified their reporting practices pending the CJEU decision; others have not. The picture varies by institution and will shift once the court rules.
Americans living in Australia, Israel, or Singapore are currently facing new account documentation demands. TIN validation failures and de-risking decisions are happening now, ahead of any court resolution.
U.S. citizens with accounts across multiple European countries whose legal exposure differs depending on which jurisdiction the account sits in, even when they live in one place.
Retirees and long-term expats with established foreign banking relationships who are being asked for updated documentation by institutions that previously required none.
U.S. citizens raised abroad who may not have filed U.S. taxes, particularly those without a Social Security Number on file with their bank. Missing TINs are the most common trigger for account closure under current FATCA validation requirements.
Anyone who has received a TIN demand letter from a foreign bank, regardless of the country. This is the front-line FATCA event for most expats right now, separate from what happens in court.

What Does This Mean for U.S. Taxpayers Abroad?

Greenback Expert CPA, Travis Call, who works with U.S. expats on FATCA compliance daily, puts the case in perspective:

“While the European privacy litigation is a major development for foreign banks, it is mostly noise regarding actual U.S. compliance obligations for Expats. Under U.S. federal law, Expats must still independently file FBARs and Form 8938 if they meet the reporting thresholds, regardless of whether a foreign bank transmits their data. The real signal to watch is the acceleration of bank ‘de-risking,’ making it critical for Expats to keep their U.S. tax filings current and provide their Social Security Number when requested to avoid account closures.”
Travis Call, CPA | Greenback Expert

Your Filing Obligations Are Not Changed by Foreign Court Rulings

Your filing obligations arise under U.S. federal law and are not altered by foreign privacy litigation or by whether a foreign bank actually transmits your data to the IRS. FATCA remains U.S. federal law. A CJEU ruling would affect whether European banks must transmit your account data to the IRS. It does not change whether you are required to report those accounts yourself. An FBAR is required if the aggregate maximum value of your foreign financial accounts exceeded $10,000 at any point during the calendar year. Form 8938 thresholds are higher and vary based on your filing status and whether you live abroad. Both obligations are set by U.S. federal law and are independent of any foreign bank’s reporting.

The EU Litigation Does Not Create a Safe Harbor or Filing Exemption

No current U.S. statute or regulation creates a filing exemption, safe harbor, or deadline extension based on pending foreign litigation. The CJEU case is not grounds for delaying filing or skipping reporting. The IRS receives FATCA data from dozens of jurisdictions with no active litigation, and your filing obligation attaches to you as a U.S. taxpayer, not to whether a foreign bank reports your account. If you are wondering how the IRS finds out about foreign bank accounts, the short answer is that the data flow does not depend on any individual court case. Our FATCA guide explains how the law works and what it requires of U.S. taxpayers regardless of where they live.

Bank De-Risking Is Accelerating Independently of Court Outcomes

For most Americans abroad, the immediate risk is not a CJEU ruling. It is a TIN validation failure, missing documentation, or a de-risking decision by their financial institution. It is important to understand that broader bank account restrictions are a matter of foreign banking law and institutional policy, not a direct U.S. tax mandate. U.S. law specifies withholding and reporting obligations for foreign financial institutions, but the decision to close or restrict an American customer’s account is made under foreign law and each institution’s own compliance framework. Account closures in Australia, Israel, and Singapore are happening now. The safest position is a current, complete U.S. tax file before your bank sends a letter.

The CJEU Case Is Worth Monitoring Over the Next 18 to 36 Months

If the court rules that FATCA violates GDPR, the legal and political pressure on the IRS to renegotiate intergovernmental agreements across all 27 EU member states would be significant. That outcome is not certain, and the case does not have a near-term ruling date. Greenback will update this article as the case develops.

What Should You Do Next?

TIN demand letter or documentation request from your bank: Respond with your Social Security Number and, if helpful, a copy of your most recent U.S. tax return or FBAR filing confirmation. A verified TIN on file is the most reliable way to avoid a de-risking review. See our guide on what to do when a foreign bank sends a FATCA letter for a step-by-step walkthrough.
Unreported foreign accounts from prior years: The IRS Streamlined Filing Procedures are an administrative IRS program, not a guaranteed statutory right, that allows eligible taxpayers to catch up with reduced or eliminated penalties. To qualify, you must certify that your non-compliance was non-willful. The program does not apply to taxpayers already under civil examination. Our streamlined filing guide explains who qualifies, the differences between the foreign and domestic procedures, and what the process entails.
Unsure whether your accounts cross the Form 8938 or FBAR threshold: Review the rules before assuming you are below the line. Failing to file Form 8938 triggers a $10,000 base penalty and up to a $50,000 continuation penalty, and foreign bank secrecy laws do not constitute reasonable cause for non-filing. The FBAR vs. Form 8938 comparison explains where the two forms overlap and where they differ.
Accounts in Belgium specifically: The legal uncertainty around the CJEU referral does not eliminate your U.S. reporting obligation. File as you normally would. Talk to a qualified international tax professional if you have questions about what the referral means for your specific institution.
Account closure already in motion: Act immediately. Account closure does not eliminate historical reporting obligations. You will still need to report the closed account on prior-year FBARs and Form 8938 filings if thresholds were met in those years. A qualified professional can identify which years are at issue and address any prior-year gaps before the account closure creates further exposure.

A specialist who works with U.S. expats every day can assess your specific account picture, which years are at issue, and the right path forward before you commit to one.

Don’t Wait for a Court Ruling to Get Your Filing Right

Greenback helps you stay compliant with FBAR, Form 8938, and foreign account reporting regardless of what happens in Europe.

Frequently Asked Questions

What does “de-risking” mean, and why are banks doing it to American customers?

De-risking is the practice of closing or refusing to open accounts for customers perceived as carrying high regulatory or compliance costs. FATCA requires foreign banks to identify U.S. account holders and report their accounts to local tax authorities, which then transmit the data to the IRS. That compliance infrastructure is expensive. Many banks have decided it is cheaper to simply not serve U.S. persons than to build and maintain FATCA reporting systems. This is legal: banks are not obligated to maintain accounts for Americans. The best protection is keeping your U.S. tax filings current, providing a verified TIN when asked, and responding promptly to any documentation requests from your bank.

What is the CJEU being asked to decide about FATCA and GDPR in Case C-804/25?

That is exactly what the Court of Justice of the European Union has been asked to decide. The Brussels Court of Appeal referred 13 specific legal questions to the CJEU in Case C-804/25, centered on whether FATCA’s mass, indiscriminate transfer of financial account data to the IRS violates GDPR’s data minimization principle. Slovakia’s data protection authority has already concluded it does. Dutch and French courts have concluded it does not. The CJEU ruling, expected within 18 to 36 months, will be binding across all 27 EU member states.

What happens if the CJEU rules FATCA illegal?

A ruling against FATCA would require every EU member state to suspend data transfers to the IRS until a new legal framework is negotiated. It would not retroactively excuse U.S. taxpayers from their own filing obligations; Form 8938 and FBAR requirements are set by U.S. law, not European intergovernmental agreements. Practically, it would force the IRS and Treasury to renegotiate FATCA’s implementation across the EU and could significantly slow the flow of foreign account data to U.S. tax authorities.

Why do foreign banks require a U.S. SSN or TIN for FATCA compliance?

Banks in countries that have signed FATCA intergovernmental agreements are required to identify U.S. persons among their account holders and report those accounts to their local tax authority, which then transmits the data to the IRS. Providing a valid Taxpayer Identification Number is how your bank confirms your U.S. tax status. While U.S. tax law requires TIN collection and recognizes both SSNs and ITINs as valid TINs, a foreign bank’s specific requirement for a Social Security Number is an operational policy tied to that institution’s local FATCA implementation, not a direct U.S. statutory requirement. TIN, SSN, and ITIN are not interchangeable in the way most banks apply them in practice. Banks that cannot verify a TIN may restrict or close accounts to avoid penalties under their country’s FATCA compliance rules. Australia, Singapore, and Israel all tightened TIN validation procedures in 2026. For a full walkthrough of what to do when your bank sends a FATCA compliance letter, see our dedicated Q&A.

What should I do if my foreign bank threatens to close my account over my U.S. status?

Foreign banks are not legally obligated to maintain accounts for U.S. persons, and many have chosen to de-risk rather than absorb the compliance cost of FATCA reporting. This has been documented in Israel, Australia, and parts of Southeast Asia. The most effective protection is keeping your U.S. tax filings up to date and promptly providing your bank with verified documentation when requested. An active, unresolved FATCA compliance issue significantly increases your de-risking risk. If a bank closure triggers questions about previously unreported accounts, FBAR penalties can be significant: non-willful penalties are assessed per FBAR report, while willful penalties can reach the greater of $100,000 or 50% of the account balance per violation. Understanding your exposure before you are contacted matters.

What if courts in my country have already ruled that FATCA is legal?

Your U.S. filing obligations are unchanged. Courts in the Netherlands and France ruled in favor of FATCA in 2026, but those rulings have no effect on what you are required to report to the IRS. The CJEU case may produce a different outcome at the EU level, and that outcome would supersede national rulings for EU member states. Until then, continue to comply with U.S. law. Do not interpret a favorable national court ruling as a compliance exemption.

Do I still have to report my foreign accounts if my bank is in a country with an active FATCA court case?

Yes. Your U.S. filing obligations under Form 8938 and the FBAR are determined by U.S. federal law, not by the legal status of your bank’s country. Whether Belgium’s CJEU referral succeeds, or whether your bank in a suspended-transfer country reports your account, has no effect on what you are required to disclose to the IRS. The IRS has multiple channels for identifying unreported foreign accounts that operate independently of FATCA data transfers. If you believe your accounts may fall under a FATCA exception, our FATCA exemptions guide covers which account types and situations are excluded from reporting.

What is FATCA data minimization, and why does it matter for the CJEU case?

Data minimization is a core GDPR principle requiring that personal data collected or transferred be limited to what is strictly necessary for a specific, legitimate purpose. The Brussels Court of Appeal found it could not determine whether FATCA’s broad sweep of account-holder data satisfied that standard. FATCA requires banks to report not only balances but also account holders’ names, addresses, TINs, and transaction-level details for all identified U.S. persons. Critics argue that FATCA’s data sweep is broader than necessary and that narrower approaches to cross-border tax reporting already exist. The CJEU has been asked 13 specific questions to assess whether FATCA’s scope of data transfer can be legally justified under GDPR.

The information in this article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex and subject to change. Consult a qualified tax professional regarding your specific situation before taking any action.