Canadian banks have the right to share information with the US

OTTAWA — A federal appeals court has upheld the constitutionality of a law that allows Canadian companies to share accounting information with U.S. authorities.

Two American-born women who now live in Canada, Gwendolyn Louise Deegan and Kasia Hyten, are challenging Canadian rules implementing a 2014 agreement between the two countries that makes information sharing possible.

Both women unsuccessfully argued in federal court that the rules violated the Charter of Rights and Freedoms against Unreasonable Seizure, prompting them to take their case to the Court of Appeal.

The U.S. Foreign Account Tax Compliance Act, also known as FATCA, requires banks and other entities located in countries other than the U.S. to report information about accounts held by U.S. individuals, including dual-citizen Canadians.

The Canadian government argued in the Court of Appeal that failure to comply with the US measures would have had serious consequences for the Canadian financial sector, its customers and the economy in general.

Information shared from Canada with the US Internal Revenue Service includes details such as account holder names and addresses, account numbers, account balances and interest, dividends and other income.

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