Taking A Cooperative Approach To Your Legal Issues

FACTA II: Intergovernmental Agreements Take FATCA Partners One Step Closer To A Virtual International Banking Data Base

On Behalf of | Sep 24, 2012 | Firm News

Even before the ink dries on the few agreements foreign banks may have entered into with the IRS to be a withholding agent for the US government, the rules are changing drastically. Major western European countries have already entered into agreements with the United States which would allow their respective banks to avoid the IRS completely and simply provide their respective governments with the names, account balances and other details of suspected Americans for the IRS to go after.

Most of these IGA’s have reciprocal provisions with “automatic exchange” of information provisions which will bring the computerized world even closer to the FATCA goal of developing a virtual international banking data base. Privacy concerns? No problem! Any country which is even thinking about signing up will be given a reasonable amount of time to change their laws and even their constitutions if need be, to come up with a disclosure protocol which meets the IRS checklist for “U.S. indicia” (read: suspected Americans). See our blog post of August 27, 2012 where we discussed the meaning of “U.S. indicia”.

In a shocker to some, the new proposed rules for IGA’s even scrap the FATCA Proposed Regulations requirement that foreign banks submit their Know Your Customer and Anti-Money Laundering rules to IRS review and scrutiny before they are allowed the privilege of becoming a US withholding agent. Under the new rules, some qualifying foreign banks’ customers will be allowed to “self-certify” that they are not Americans! (Seriously??)

I will be speaking about these controversial proposed Intergovernmental agreements at an international FATCA conference in Miami in January of 2013. Stay tuned for more details.

[email protected]