My TakeThe United States hegemon rules on tax matters

The headline reads: "Hong Kong and HSBC under scrutiny as US cracks down on American tax cheats".

Actually, the rest of the world and most global financial institutions have been sucked into a renewed worldwide crackdown by American taxmen. My guess is that many of these so-called tax cheats are normal people who would not have got into trouble if they had been citizens of any other country in the Organisation for Economic Cooperation and Development (OECD).

While the rest of the civilised world frees their non-resident citizens of most or all tax obligations, the US continues to tax its citizens abroad, with only the first US$100,000 exempted. Unfortunately, this is not just an American affair. Otherwise, we wouldn't care. Under the Foreign Account Tax Compliance Act (Fatca), which took effect in July last year, the US Internal Revenue Service, the State Department, the White House and myriad other government departments have pressured countries and financial institutions to rat on their American clients under the threat of severe financial penalties including sanctions and banking licence suspension within the US. It's basically legal extortion.

The Americans can do it because virtually all global financial institutions have US-dollar clearing operations in the US. That is part of the "exorbitant privilege" Americans exploit to force other people and nations to comply. It's the same judicial and extra-territorial overreach which forces others to join its sanctions and anti-money-laundering schemes against its enemies such as Iran, Sudan and Cuba or its requirement for foreign shippers and operators of passenger jets to make clearances and declarations long before arrival.

All these greatly increase the administrative and compliance costs for everyone with no appreciable benefits for them. But if you don't comply or are seen to be failing to do so, well, look at what happened to HSBC, Standard Chartered Bank and BNP Paribas...

In a civilised world, American expatriates wouldn't have to worry every year whether they have complied with complicated US tax codes, and the rest of the world wouldn't have to rat on them. But the US is still the hegemon, and what it says goes.