2 ms·
It happens exactly as you suspect, by arm twisting in secret. I can tell you in some detail how Canada did some of its own arm twisting against the United Stat
by throwaway76194 11y ago
It happens exactly as you suspect, by arm twisting in secret.
I can tell you in some detail how Canada did some of its own arm twisting against the United States!
Some years ago, Charles Schwab & Company (a major US brokerage) had to close all the accounts of Canadian customers who had accounts in the US.
Charles Schwab & Company is a wholly-owned subsidiary of the Schwab Corporation that trades on the NYSE. Schwab Canada was a subsidiary of the Schwab Corporation. There was no other relation between Schwab Canada and Charles Schwab & Company.
When the Schwab Corporation sold off Schwab Canada (their Canadian broker/dealer) to a Canadian company, the Canadian government said that Schwab's US operations had these these choices:
(a) get a Canadian license; Canadian laws says that they cannot solicit Canadian business unless they open a branch in Canada, or
(b) transfer all Canadian clients to their Canadian broker/dealer before they sold it, or
(c) face a $2,000,000 fine for doing business without a license; the Canadian government's threatened fine is against the parent company (the Schwab Corporation)
Notice that the Canadian government feels free to punish and give orders to the entirely US-based company (Charles Schwab & Company) and to the parent company (Schwab Corporation) because the Canadian government doesn't want it citizens to maintain accounts in the US.
Schwab kept holding off for 2 years on doing anything, but finally the Canadian government threatened to start fining them.
There were 1400 Canadian customers who had their US-based accounts closed. Merrill Lynch (an even bigger US brokerage) had a lot more US-based Canadian accounts than Schwab, and the same thing happened to them as well.
So even though foreign countries should have no jurisdiction over what a country does internally, they actually do because deals get blocked and secret pressure is applied.