On January 30 and February 1, I chaired a FATCA conference in Miami which was put on by a company called Marcus Evans out of London which is a for profit business. The conference was attended by a diverse group of banking officers, in-house tax counsel to large multi-national corporations, bank and financial institution compliance officers, a wide range of Information Technology people, tax managers, and tax practitioners. There was a large group from Canada and South America. The focus of the conference was strictly on FATCA from the standpoint of complying financial institutions. Most of the participants did not even know about and individual’s duty to file FBAR’s, Foreign Asset Statements (form 8938) and there was very little talk about privacy concerns, fears about the dangers of an emerging international banking data base system, or how Canadian politicians were doing in shaking their lap dog image as pawns of the US government.
These folks were all hard-working, serious, responsible business men and women who were on their way up in their companies. They are motivated by the knowledge that they
will be evaluated by their managers in terms of how quickly and effectively
they can bring their companies into compliance so that they do not miss a beat
on January 1, 2014, when every foreign bank in the world (absent an IGA in place) is supposed to have a system in place to enable them to turn over the names and socials of their American depositors once they enter the FATCA Portal to Mordor which the IRS will open up in July of 2013.
Discussion topics included, how to enlist the support of internal corporate constituencies and steakholders for the massive internal changes which companies are now working out to implement FATCA; questioning the reliability of existing data bases which companies will use to cough up the names of their Americans; what happens if the IRS is not pleased with a company’s FATCA readiness by the time the FATCA effective dates kick in; what are the FATCA reporting obligations for correspondence banks; and a major topic of conversation was the relationship between the way the FATCA statutes are supposed to work and the emerging world of intergovernmental agreements between “FATCA friendly” countries and the United
The overriding sense of the conference concerned how to use FATCA as a business and
growth opportunity. All over the world, there is a race between mega-corporations, giant financial institutions, CPA firms and business leaders to get ready for FATCA and position themselves and their clients into the best posture possible over their competitors to ensure that FATCA spells financial success.
Many readers of this blog will be disappointed to hear this report. The people around the world who stand to profit from FATCA are not thinking much about government intrusions into the private lives of the world citizens. That is the furthest thing from their minds. These folks were all good students, in effect, knowing full-well that there was a new body of rules and regulations on the table which they needed to learn and master.
In the FATA compliance world, we are seeing the free enterprise/free market system at work. This is all about Adam Smith and the profit motive and how that shapes what we see in the world around us. In the business world, FATCA is all about supply and demand: supplying talented and capable experts to satisfy an enormous demand on the part of the world’s financial institutions who are determined to not be left at the station when the FATCA train starts to move this summer.