The USA does this quite regularly. Look at FATCA as one example.
The problem here is that some twits did something like this once and since then everyone is saying "but look, they're doing it, why shouldn't we?" when they ought to be saying "we're all going to be imposing sanctions on that country until they stop doing that".
If someone is doing something, that's precedent -- but the precedent can either be "someone who does that can get away with it" or "someone who does that is not going to get away with it". And when making the decision, think through the consequences of everybody doing it to you if you allow it to be the first one.
They weren't arguing for anyone's right to be corrupt in the first place though. If US citizens really have to pay extra taxes and have arduous reporting requirements then so be it, but why is the rest of the world dragged into that mess? This isn't a "dirty banks" issue; it's nearly impossible to get a bank account at any reputable institution as a US citizen abroad just because of the PITA of the reporting requirements. It's a mediocre law from questionable authority.
Another example is that e.g. AWS Europe, even if every single one of its employees, board and what have it are all Germans, are still compelled to hand over their data if Amazon US is the parent company, under the likes of the CLOUD Act or FISA. That's a foreign entity comprised of foreign citizens and concerns the assets (data) of foreign citizens.
Sadly a lot of Americans hear "foreign bank account" and immediately think "tax evasion" without realizing there are a lot of ordinary Americans overseas who just want to pay the rent and save for retirement but can't because Uncle Sam follows us wherever we go for life.
Just one example: https://help.revolut.com/help/wealth/stocks/licences-regulat...
