Joris DeeneThe Brussels Market Court has decised in a ruling of 26 November 26 2025, to refer thirteen questions for a preliminary ruling to the Court of Justice of the European Union (CJEU). The key question is whether the automatic, mass exchange of bank data of Belgian citizens (the so-called “Accidental Americans”) with the US Internal Revenue Service (IRS) is compatible with European data protection rules. Until the European Court provides an answer, the final ruling on the legality of these transfers remains suspended.
The facts and legal context
This case has its origins in the fight against tax evasion by the United States. In 2014, Belgium, like many other countries, concluded an intergovernmental agreement with the US to implement the American Foreign Account Tax Compliance Act (FATCA). This agreement was transposed into Belgian law by the Act of December 16, 2015.
Based on these regulations, Belgian financial institutions are required to report information on clients who are US citizens or US tax residents to the FPS Finance. The FPS Finance then automatically passes this information (such as balances, interest, and dividends) on to the US Internal Revenue Service (IRS).
This system particularly affects “Accidental Americans”: individuals who have American nationality by virtue of being born in the US, but often no longer have any connection with the country and have never worked or lived there.
The ball started rolling when the Accidental Americans Association of Belgium (AAAB) and an individual complainant lodged a complaint with the Belgian Data Protection Authority (DPA) alleging that this massive data transfer violated data protection law.
The procedure has become quite complex:
- Decision 61/2023 (DPA): The DPA Litigation Chamber initially ruled that the transfers were unlawful and prohibited them.
- Annulment: The Market Court overturned this decision on December 20, 2023, due to a lack of justification and referred the case back to the DPA.
- Decision 79/2025 (DPA): On April 24, 2025, the Litigation Chamber, in a different composition, again ruled that the processing was in violation of the General Data Protection Regulation (GDPR) (including principles of purpose limitation, minimization, and transfer to third countries) and issued a reprimand and order to comply.
The Belgian State (FPS Finance) lodged another appeal against this latest decision with the Court of Appeal, which led to the current interim ruling.
The ruling of the Market Court: 13 questions to the Court of Justice
In its ruling of November 26, 2025, the Market Court ruled that it did not have sufficient information to make a final ruling on the validity of the GDPR violations identified by the DPA. Given the complexity and EU law nature of the case, the Court suspended the proceedings and referred 13 questions to the CJEU for a preliminary ruling..
These questions can be divided into three broad categories:
1. Compatibility with the ‘old’ law (Directive 95/46/EC)
The Court asks whether an agreement such as FATCA, concluded before the entry into force of the GDPR, was compatible with the then applicable Directive 95/46/EC and the Charter of Fundamental Rights. Specifically, it is asked whether the mass, undifferentiated transfer of data without specific suspicion of fraud is proportionate and whether the purposes are sufficiently specific.
2. The interpretation of Article 96 GDPR (The Grandfather Clause)
Article 96 of the GDPR stipulates that international agreements concluded before May 24, 2016, remain in force if they complied with EU law at the time. The Market Court wants to know:
- Does the burden of proof for this rest with the controller (FPS Finance)?
- Does this article oblige Member States to renegotiate or terminate old treaties that are not GDPR-compliant?
- Can a Member State continue to invoke Article 96 in order to continue non-compliant practices for years?
3. Transfer to third countries under the GDPR (Chapter V)
The third set of questions concerns the requirements for transfers to the US under the current GDPR. The Court asks for clarification on:
- The status of the adequacy decision (Data Privacy Framework) in tax matters.
- What “appropriate safeguards” (Article 46 GDPR) should be specifically included in a treaty (such as enforceable rights for data subjects and legal remedies).
- Whether the exception for “compelling reasons of public interest” (Article 49(1)(d) GDPR) can be invoked for structural, mass transfers.
Legal analysis and interpretation
This interim ruling is of great strategic importance for data protection law in the EU. The Market Court touches on the core of the tension between international tax transparency and fundamental rights.
The relevance of the Schrems II ruling
The questions posed by the Market Court are clearly inspired by the Schrems II-judiciary of the CJEU. It ruled that transfers to the US are problematic due to the far-reaching surveillance powers of US intelligence services. The Court of Justice is now openly questioning whether FATCA transfers, which also expose data to US authorities without the strict safeguards of the GDPR, can pass the proportionality test. The central question is whether a general, undifferentiated bulk transfer of financial data (without any indication of fraud) is still “necessary” in a democratic society.
A new light shed by the Latombe ruling?
Although criticism of data protection in the US (based on the Schrems II-ruling) sounds loud, the legal reality is changing. In the Latombe ruling of the General Court of the EU of September 3, 2025 the new US safeguards against intelligence surveillance (Executive Order 14086) were assessed positively in the context of the Data Privacy Framework. It is possible that the CJEU will extend this “softer” line to the exchange of tax information, which would increase FATCA's chances of survival.
Belgium as a European pioneer (or rebel?)
The decision of the Brussels Market Court stands in stark contrast to the case law in our neighboring countries. For example, the French Conseil d'État ruled in 2019 and recently in January 2024 that the similar French FATCA agreement does not violate the GDPR and refused to refer questions for a preliminary ruling. By now referring these questions, the Belgian court is forcing a European debate that other Member States would prefer to avoid. The ruling of the CJEU will therefore be binding not only for Belgium, but for the entire Union, and may overrule French case law.
Article 96 GDPR: Not a free pass forever?
An important legal point is the interpretation of Article 96 of the GDPR. The FPS Finance invokes this to argue that the “old” FATCA agreement remains valid as long as it has not been amended. However, in its decision 79/2025, the DPA argued that this article should not create a permanent transitional regime that undermines the protection of citizens. By asking explicit questions on this matter, the Market Court is opening the door to European case law that could force Member States to actively renegotiate old treaties if they no longer meet current data protection standards.
The role of the national court
The Markt Court also asks whether, in the event of a negative response to the validity of the agreement, this agreement should be automatically rendered inapplicable. This confirms the role of the national court as a ‘European court’ that must guarantee the primacy of Union law (and the privacy of citizens), even against international treaties.
What this specifically means
For the “Accidental Americans”: There has not yet been a definitive halt to data transfers. The procedure has been suspended pending responses from Luxembourg (CJEU), which usually takes 15 to 18 months. However, the critical questions raised by the Market Court suggest that the legality of the transfers is highly uncertain. If the CJEU rules that FATCA violates European fundamental rights, the FPS Finance will have to stop the transfers.
For financial institutions: For the time being, banks remain bound by the law of December 16, 2015. They must continue to report to the FPS Finance. However, legal uncertainty is increasing. Compliance officers would do well to closely monitor the responses of the CJEU, as an annulment of the legal basis would render the entire reporting flow illegal.
For the government: The pressure on the Belgian government (and, by extension, other EU member states) to renegotiate the FATCA agreement with the US is mounting significantly. The implication of the questions is that passivity (“that's just how the treaty is”) may no longer suffice under the GDPR.
Frequently asked questions (FAQ)
What is an “Accidental American”?
An “Accidental American” is someone who has acquired American citizenship by birth on American soil (ius soli), but who often left the US shortly after birth and has no significant ties to it (anymore). Despite the lack of ties, the US considers them taxable.
Have data transfers to the US been stopped immediately?
No. The Market Court has suspended the proceedings and is awaiting a response from the European Court of Justice. The earlier decision by the DPA to prohibit the transfers is the subject of this appeal and is not yet definitively enforceable until the Court has issued a final judgment.
Why might FATCA conflict with the GDPR?
The criticism is that FATCA leads to a massive, automatic transfer of sensitive financial data of all US citizens, without there being any specific suspicion of fraud. This could be contrary to the principle of proportionality and the rules on transfers to countries outside the EU that do not offer an adequate level of protection.
Conclusion
The interim ruling by the Market Court is a crucial step in the long-running legal battle surrounding FATCA. By posing thirteen specific questions to the Court of Justice, the Market Court demonstrates that data protection concerns are being taken seriously and that national legislation and international treaties are not immune to the GDPR.
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